Ethiopian Reporter, Political, Kibir Minister, Editorial….

Ethiopia Country Report Context

Key changes and developments in the newspaper marketplace in the past five years

According to the Ministry of Information, there were 68 newspapers and magazines published and distributed in July 2006. This is an increase from five years ago (though figures for 2000 could not be found). There are 56 newspapers and 12 magazines. Most papers are weeklies, bi-weeklies and monthlies, with only three dailies, all national, in existence. Many of the new papers in recent years have been tabloid weeklies responding to news events, such as the 2005 elections. However, some of these papers disappear when there are no strong news events to cover.

Newspaper in Ethiopia

Daily

Twice a week Weekly

Every two weeks Monthly

Source: Ministry of Information, personal communication, August 2006

The newspaper sector is limited by the country’s low literacy rates, and most titles are said to have small print runs of only about 3,000 copies. At the time of writing this report, no data could be sourced on the percentage of the adult population that reads a newspaper.

At national level, there are three daily newspapers (see Figure 8). The three national dailies are Addis Zemen (Amharic), The Ethiopian Herald (English) and the Monitor (English). The Monitor is the only private-owned daily. There is no information available to distinguish whether the remaining 53 newspapers are national or regional papers.

There are 12 national magazines; 10 published monthly, two published every two months, and two published quarterly. Ten of these magazines are in the Amharic language, and two are published in English, a monthly and a bi-monthly (Ministry of Information, personal communication, August 2006).

7.2 Investment and growth in newspapers in the past five years

There has been a significant increase in the number of papers in the past five years, with new privately-owned papers leading this growth.

However it is difficult to comment on the exact size of the newspaper market, as there is no research available in this area. Anecdotally, however, there was evidence of high demand for private papers during the May 2005 election period, but with a contraction in the number of private papers after the election.

Only a few of the newspapers, such as The Reporter (with Amharic and English editions, owned by the Media Communication Centre) and Addis Admass (in Amharic) are backed by strong private investment. Some papers have folded after not being strong enough to withstand challenges pertaining to legal or other matters. Some complain about delays in getting permits due to delay in finalisation of the provisions of the new Press Law. Another barrier to newspaper sector growth, according to the International Press Institute (IPI, 2005), has been the banning of some newspapers and the detention of journalists following the unrest after the May 2005 elections.

There is a state-owned news agency, Ethiopian News Agency, and a private local one, Walta Information Centre, both of which mainly serve the state media. Walta Information Centre is owned by the ruling party (EPRDF), so is categorised as state-owned in Figure 9. The private media do not have arrangements with these news agencies to provide them with the content they require, and this remains a major challenge for the private media. The other five news agencies operating in the country, such as Reuters and AFP, are all international.

State or government-owned/backed

Plurality, ownership and control

The private newspaper sector in Ethiopia is still very young and, because of lack of transparency around ownership, it is not known whether ownership is diverse or concentrated in a few hands. However, Kifle Mulat, president of the EFJA, states that all newspapers are under censorship and all are pro-government and controlled by the government (directly or indirectly) (K. Mulat, private communication, 1 September 2006). There is strong opposition to this view, however, from one Ethiopian editor and publisher, Mr Amare Aregawi, who argues that there is no censorship in the country because it is unconstitutional and illegal for the government to practice it.

The Minister of Information states that of the 56 newspapers currently being published, six are government-owned and 32 are privately-owned. The remaining papers are owned by Religious Organisations (8), Associations (6), Political Parties (3) and NGOs (1).

Of the 12 magazines published, 11 are privately-owned, while one is owned by a religious organisation (Ministry of Information, personal communication, August 2006).

Figure 10 below lists the 10 most-read newspapers. These papers can be classified into state, private and party papers. Addis Zemen is a daily state paper. Netsanet, Addis Admas, Ethiop, Askual, Minilik and Ethiosport are private weeklies. Party weekly papers include Oromiya, Abyotawi Dimkrasi and Woyin.

The number of newspaper readers is generally thought to be quite low, and there could be several reasons for this. First, it is possible that the culture of reading has not been properly cultivated, despite the fact that literacy has been increasing over the past few years. Another possible reason is that, in the case of the private newspapers, they cannot afford to distribute beyond the capital Addis Ababa, due to both financial and infrastructural constraints.

Newspaper Netsanet Oromiya

Abiotawi Democracy

Addis Admas Ethiop Asmat Minilik

Addis Zemen Woyin Ethiosport

Percentage

Source: Ministry of Information, personal communication, August 2006

7.4 Diversity

The past five years has seen an increase in the plurality of ideas found in newspapers. For instance, there is frequent newspaper coverage of women’s and religious issues, with some papers even published by religious institutions. Private newspapers provide more entertainment coverage than the government ones do.

The majority of the newspapers are in the Amharic language (33), and the second most common language is English (14). There are also several bi-lingual newspapers, publishing in both Amharic and English (5), and there is one newspaper that publishes in Amharic, English and French. There are also newspapers written in Oromifa (2), Tigrinya (1) and Arabic (1). (Ministry of Information, personal communication, August 2006). One interviewee expressed the need for further objective research to obtain more accurate data on readership.

7.5 Quality of newspaper reporting

With the great increase in the number of papers, there has also been an increase in journalistic work. The quality of journalism is highly uneven. Whilst some commentators describe work as lacking in ethics, independence and professionalism, others assert that concerted efforts are being made by journalists to improve standards in the sector.

7.6 Specific challenges

Challenges faced by newspapers in Ethiopia include low reading levels, the high cost of distribution outside the capital Addis Ababa, and a lack of professional journalists.

Key findings

The past five years have seen increased private sector participation in the press sector, but many of the private papers are not financially strong.

The largest group of publications is the national weeklies.

The panoply of challenges facing Ethiopia and its people show no sign of respite. Though active hostilities in the northern part of the country, have almost stopped after the forces of Tigray People’s Liberation Front (TPLF) were pushed back to Tigray from most of the territories they had captured in the adjoining Amhara and Afar regions, the security situation in a number of areas of the nation is fragile owing to the interminable endless cycle of violence that has been racking them for years now. Aside from the death of tens of thousands and the displacement of millions frequent outbreaks of internecine conflicts have led to, the unchecked rise in extremist attitudes, the cost of living, corruption, and land grabbing, among others, have made life an ordeal for the vast majority of Ethiopians. It’s in this backdrop that an incident, whose fallout could potentially plunge Ethiopia into a crisis of catastrophic proportions, recently took place.

On March 29 at least 26 people were killed and several more injured in clashes between armed groups hailing from the Minjar Shenkora Woreda of North Shewa Zone, Amhara regional state, and local militia in the bordering Fentalle woreda, East Shewa Zone of Oromia regional state. The blame game began soon thereafter with both sides issuing conflicting a slew of contradicting statements regarding the incident. Amhara region officials lay the blame on “anti-peace groups” whom they accused of perpetrating the attack. Their counterparts from the Oromia region though disputed the accusation, blaming the attack on “extremist forces operating in the Amhara region”. They also took these forces to task for displacing people and looting property in other woredas of Oromia bordering the Amhara region. It’s surprising that both the federal government and the ruling Prosperity Party (PP) have not made any overt attempt to defuse the tension between the Amhara and Oromia regional administrations even as both escalate the war of words among them.

Ethiopia is a nation that continues to be on the wrong side of the global digital divide. Only a fifth of its over 110 million people have Internet access that is expensive and often unreliable. In cognizance of the imperative to tackle the multi-faceted challenges this poses the government has embarked on liberalizing the telecom sector and adopted Digital Ethiopia 2025— a digital transformation strategy described by the government as a visionary strategy that serves as a blueprint for different sectors and institutions—as it tries to position the country competitive in the brave new digital world. Efforts to open up the telecom industry have had limited success with one international consortium awarded a license to operate telecom services in the country so far while plans to sell 45 percent of the state-owned telecoms monopoly to international buyers have been repeatedly pushed back. Meanwhile, a number of public services have begun to benefit from Digital 2025 through developments like e-government, digital ID, the national payment system, online trade registration and licensing system, electronic single-window customs clearance and electronic tax filing.

As the government ramps up its roll out of various services aligned with the digital transformation strategy, the suspension by the National Bank of Ethiopia (NBE) of digital remittance platforms, namely CashGo and MamaPay, the Bank of Abyssinia (BoA) uses has caused a furore, leading many to question whether the central bank is on the same page as the government in the latter’s quest to create an inclusive digital economy through the national digital strategy. CashGo is an international money transfer system which allows anyone abroad to transfer funds in the local currency to accounts maintained at BoA while MamaPays allows users to request payment from remitters or payment to be settled on behalf of a third party. The reasons cited by NBE to justify its decision are varied. It says both BoA and the developers of the applications behind the platforms do not possess a valid license permitting them to provide remittance services. It also alleges that the applications enable BoA to avail travelers foreign exchange through credit cards in disregard of its regulatory mandate over currency management. The regulator further raised the need to address safety and security concerns, particularly relating to privacy breaches, and ensure that local fintech companies survive the inevitable competition from foreign rivals via a major initiative currently in the works.

The developers of the applications, however, refute the points mentioned by the central bank. They argue that they are authorized fintech companies engaged in developing applications and as such do not require to have a remittance license, adding the applications were vetted by the NBE and the Information Network Security Agency before they were integrated into BoA’s system. They also suspect that foul play may be involved, saying some of the remittance companies active in the Ethiopian market probably conspired with regulators at NBE to close them down because the country would save up to USD 800 million it annually lost to them through steep service charges and redirection of the forex they receive to informal channels. Moreover, they point out that NBE’s compliance and safety concerns could have been worked out while the applications were still running.

While NBE may have grounds it deems legitimate and warrants the suspension of the operation of the digital remittance platforms, its decision is heavy-handed and lacks foresight. In the first place, it did not hold formal consultations on the matter with all the stakeholders involved. If it had demonstrated the willingness to engage them constructively, the dispute between the parties could have been amicably solved. The decision also discourages fintech companies from investing in the development of platforms that help Ethiopia bridge the digital divide. The Digital 2025 strategy aspires to transform Ethiopia’s digital landscape to accomplish such lofty goals as playing a vital role for inclusive prosperity; innovating and applying the culture, practices, processes and technologies of the digital era to respond to citizens raised expectations. The realization of the strategy requires, among others, the collaboration and commitment of everyone including government, non-governmental, development partners and societies as well as a robust commitment to increase infrastructure and put in place an enabling ecosystem. If the government is to succeed in pushing the country through digitalization and making it a viable investment depends on its dedication to reforming the bureaucracy, implementing the right regulation and creating credible institutions. As Prime Minister Abiy Ahmed (PhD) once said leveraging digital opportunities demands a new mindset and leadership style. Leaders at the central bank must take this advice to heart and adapt to the new digital environment.

The feuding between officials heading two branches of the ruling party cannot be confined to them given the party is still ethno-centric despite claiming to be a national party. In fact it has led to spats among major opposition parties active in the respective regions and social media activists, which are spewing a hateful rhetoric that could very well pit the Oromo and Amhara people, the two largest ethnic groups in Ethiopia, in a bloody conflict. The consequences of such a conflict are too horrible to contemplate. From a protracted and destructive civil war in which no side emerges victorious to a total state collapse all the scenarios facing the nation are lose-lose not only for its citizens, but also the Horn of Africa and beyond. It’s not entirely clear whether the protagonists to the ongoing verbal warfare realize that their actions are liable to lead to Ethiopia’s unraveling or are indifferent to the ensuing heavy price.

With three decades of experience in the banking industry, Mulugeta Asmare is known for his successful years at the Bank of Abyssinia. During his five year tenure as the president of the Bank until 2019, the Bank’s profit doubled to over half a billion birr, while its paid-up capital skyrocketed from a little less than one billion birr to 2.5 billion birr.

Last year, he was appointed as the president of Goh Bank, the first self-proclaimed mortgage bank in Ethiopia. The Reporter’s Selamawit Mengesha sat down with Mulugeta to learn about his new journey at Goh and his insights in the banking industry. Excerpts:

The Reporter: Tell us about your experience in the banking industry.

Mulugeta Asmare: I have been working in the bank industry for the past 31 years. I have an all-round experience in the banking industry, meaning I had started work in the banking sector as a clerk and have now reached the position of general manager. I have worked as deputy president of Abyssinia Bank for four years-and-a-half until 2019. I believe that I was able to make a lot of reforms and changes while working at Abyssinia Bank. I was faced with a lot of challenges while working at this bank, since it had a lot of shortcomings at the time.

I believe that I have contributed a lot towards the betterment of the banking system at Abyssinia Bank, for it to get to the stage that it is in now. We started off by inviting global market leaders like Deloitte, PWC, KPMG, and Ernest & Young to participate in a bid to frame a five-year strategy for the bank. Winning the bid, Ernest & Young have done a remarkable job in improving our system-wide operations. We used to have such work done by in-house experts. So, this is the first time that we enlisted the services of a globally renowned company. We have focused on manpower development and raising pay, measures that have surely contributed to the development of the bank.

Following my previous stint with Abyssinia Bank, I used to focus on private contractual jobs here and there. I was informed of this new concept of establishing a mortgage bank system which was unique and different, and it got my attention. After establishing the bank and selling the shares and raising enough capital to establish the bank, we couldn’t find the right person to run it. The 11 founding members are well-known business professionals that have worked for years in the banking system, and they wanted me to take the role. I couldn’t say no to such noted personalities as former National Bank President Getahun Nana.

Before delving into the mortgage bank, I would like to raise a question regarding saving. Most people open bank accounts for saving purposes while few dare to ask for loans. Why do you think that is the case?

The major mission of a bank is to help develop the culture of saving. It is evident that once there is a saving, the next step is to provide a loan. Without savings, there are no loans. Customers can resort to saving for they have some future plans to invest or to purchase something, or it can just be a leftover from their monthly expenses. This saving is directly forwarded to producers and service providers who are planning to expand a business, or who are looking forward to enter into new business ventures. The main job of a bank is to act as an intermediary between the depositor and the borrower.

Banks have advanced and sophisticated role nowadays compared to the old times. I believe that low-scale savings at the banks is the main reason for the small number of loans. The loans are mostly provided to customers that have a convincing project idea with a guaranteed profit. You don’t find such projects every day, not everyone can be a producer, a service provider or a farmer. Banks have a limited access to capital and deposit, which is the reason for setting strict criteria. These are some of the reasons for having more savings while there are less loans being provided.

The last three years have seen a remarkable change in the banking sector. The number of private banks has increased to 23, including Goh Betoch Bank, which is managed by you, and an interesting enterprise at that. Why do you think private banks are increasing at such a pace? Is it because the banking industry is profitable?

It is obvious that the banking industry is becoming more profitable today than ever. All banks are recording a profit since the market demands such service. Even though our economy is underdeveloped, the banking sector is essential to reach the population that is not getting access to the service. Until recently, only 25 percent of the population was banked. But that is changing thanks to the increasing number of banks and the opening of branches in the regions. This shows that the market is still untapped. That being said, the capital requirement to establish a bank is also increasing drastically. The set of criteria laid down by the National Bank is complex. Therefore, I don’t believe that we have banks mushrooming left and right. For a population of 110 million, the number of banks we have is far from enough. I think the main challenge for potential new banks forming is the rules set by the central bank. Allowing specialized banks to open branches in the country is not yet a trend but it’s a must. We have paved the way as a mortgage bank but there can be many others that specialize in farming, industry, housing, import and export, etc.

Goh Bank specializes in the housing sector. I’m sure you’ve conducted a thorough research before establishing the bank, including the case of the then Construction and Business Bank. What is the sustainability plan?

The Construction and Business Bank has its own flaws. During the reign of the Derg, it was taken over by the government and it was functioning under the name of Housing and Savings Bank, the only service provider specializing in mortgage banking. It was later on transformed into a commercial banking system and was named as “Construction and Business Bank.” Keep in mind that both the Constriction and Business Bank and Commercial Bank were providing the same traditional banking service under a different name. The bank didn’t have enough capital. Therefore, it has struggled to keep in the same pace as private banks. The Construction and Business Bank later on merged with the Commercial Bank since it couldn’t stand on its own. This has caused a gap in the mortgage banking system. It provides a service that is in high demand. That is the main reason for establishing the Goh Betoch Bank with a view to addressing the problem. A lot of customers have savings in their account that is not enough to purchase a house without bank financing. These people can opt to switch funds used to rent a house in favor of mortgage payments.

Does the bank provide mortgage service or does it focus on commercial services?

The bank purely provides mortgage services. It is also registered with the national bank as a provider of mortgage services. We are the first bank in Ethiopia to offer this service. We have done rigorous feasibility studies. We haven’t provided any commercial loans to businesses. We only give loans to customers who want to buy a house.

Is there a push from the government to make the service partially commercial?

Actually, we are the ones pushing. That is since the country doesn’t have laws regulating such a specialized banking system. According to the law in the books, all banks are treated equally, be they private or government. But we are demanding a special treatment, and the national bank has lately been cognizant of this fact.

Do you cater to folks lower in the socio-economic ladder, and can you also reflect on the high cost of housing in Ethiopia?

It would take days to discuss issues regarding housing. In Ethiopia, there are many programs that were drafted in order to provide solution to these problems. For instance, the Integrated Housing Development Program was developed by the government in 1997. This condominium-housing project was later on developed into the ‘40/60’ housing. The idea was to construct a lot of housing units and help the general public own their house. A mere 400,000 housing units have so far been built. Many Ethiopians have been into the culture of housing saving schemes for years now. There is a study indicating that 400,000 housing units needed to be built every year in order to meet demand in Ethiopia. Specifically, 100,000 housing units should be constructed in Addis Ababa every year, but a tenth of that is being accomplished.

What is more, the already existing houses in Ethiopia do not meet habitat standards established by the United Nations. Based on this requirement, around 74 percent of the housing units in Addis Ababa need to be reconstructed since they do not meet the standard. The main reason for the soaring price of houses is the ever rising cost of land as well as construction materials. The paucity of hard currency coupled with unbridled inflation has worsened the situation. The current going rate for a housing unit is beyond the reach of middle and lower income citizens.

According to our study, medium income is 30,000 and up, way below the threshold to afford buying a new house. We should also look into our construction system that is backward and traditional. It takes two to three years to build a house. Time is essential; we should be able to construct houses in one year. If we want housing to be affordable, we should look into ways of cutting down the price of land and construction inputs as well as employing modern technology. Financing should also be factored in, and this is where we come in.

Apart from huge outlays by private banks, the government is also spending 50 to 60 million birr to construct condominiums. These houses are designed to be affordable to low-income people, but that’s not the case. How does your bank intend to make housing affordable to middle- or low-income citizens?

The housing problem can’t be solved only by private banks. The main role should be played by the government since having shelter is a human right. The government being a responsible body should provide land at a lower price or for free to the lower and medium income people. What’s more, the government should regulate the price of construction materials besides encouraging their ample supply. Banks as financers should also expedite provision of capital in the form of loans.

Most banks are reluctant to engage in mortgage banking. How come you chose it?

We dared to join the banking sector, especially mortgage financing, because of the need for one on the market. Our shareholders took the initiative to establish a huge institution that can support the country’s economy. The realty on the ground in Ethiopia is such that a 40-year-old individual lives with his or her parents. This is so due to the dearth of financing schemes to own one’s house. Therefore, we are trying to help individuals with limited means.

What is the plan this year as regards providing mortgage loans for customers?

We have started business since October 25. We haven’t provided much service because we just launched our bank a few months ago. But we are planning to provide one billion birr in loans until the end of the year. Based on the outlook of the economy, this might not be attainable, but that’s the plan.

How much would that be per client?

It depends on the customer. Some might take a 10 million-birr loan while others ask for more. Anyways, we are planning to provide 1 billion birr in loans until the end of this year. While framing this plan, we were under the impression that we can go around the country and find deposits, but there were many unforeseen events such as the war that disrupted the economy. Therefore, we might not be able to meet the target.

So there is no plan to provide this service to other regions?

We will cover other regions as well. We might not have many branches like other banks but being a mortgage bank, we are going to employ technology to scale up services. The main branch is in Addis Ababa while the second branch is in Dire Dawa and the third branch is around Lebu. The fourth branch in the CMC area goes online this month. We serve cities that have a high housing demand such as Hawassa, Adama, Bahir Dar,Gonder and Mekelle.

What do you think of foreign banks establishing mortgage banks in Ethiopia? How would they affect the already existing mortgage market?

Although I’m aware that foreign banks are joining, the timeline is not yet announced. A healthy competition is not bad; I don’t believe that they will take over the banking business instantly. The government will surely have some sort of plan in order to institute a gradual change. Some requirements might also be in order such as a fixed amount of capital. They should purchase shares to be able to establish a bank in Ethiopia. For instance, if a foreign bank buys 30 to 40 percent share from a private bank, then it will be perfect since they can invest in human-resource development and bring in capital for the existing bank.

Mortgage bank is no different from other private banks; I believe that foreign banks can help a lot since there is an untapped market. We can assist them in expediting the process of setting up shop. If foreign banks buy shares from us, then they can avoid that hustle. We would like the competition, although we are not sure when they can come to the market; we are preparing psychologically to work with them.

Can you briefly explain what it takes to get mortgage?

Those who seek loan at our bank, we welcome them all. We have started giving service for most customers now. It is required for the customer to save a minimum of 20 percent of the selling price of the house at our bank. And then, we can provide the remainder 80 percent. The other unique system is that we will provide 30 years grace period for paying the loan back to the bank. Our interest rate is lower than other banks’. For instance, Commercial Bank provides loans at 15 to 26 percent rate while we can provide loans for less. Our interest rate is flexible depending on the currency and frequency that a customer would return the loan. This makes us unique.

Customers can’t knock on any private bank and ask for a loan to purchase a house. Most banks provide a mortgage service to their employees, or for selected VIP customers that pay in foreign currency such as embassies, NGOs and exporting companies. We only require that a customer has a fixed monthly salary and that he or she can pay the loan back at the provided timeline. There’s also no need for any collateral since we use the house that will be purchased as collateral by itself. We are trying to reach the public with this information to mitigate the housing problem.

Since the public is very eager to get this service, what can we expect from your bank?

We would like to pass the message that any customer that has the financial means and the interest to purchase or construct a house, we are eager to help. Come to our bank, open a bank account and save the minimum amount of money required for purchasing the house that you want to have. We will advise you on the best option. We are also planning to construct houses by ourselves.

With three decades of experience in the banking industry, Mulugeta Asmare is known for his successful years at the Bank of Abyssinia. During his five year tenure as the president of the Bank until 2019, the Bank’s profit doubled to over half a billion birr, while its paid-up capital skyrocketed from a little less than one billion birr to 2.5 billion birr.

Last year, he was appointed as the president of Goh Bank, the first self-proclaimed mortgage bank in Ethiopia. The Reporter’s Selamawit Mengesha sat down with Mulugeta to learn about his new journey at Goh and his insights in the banking industry. Excerpts:

The Reporter: Tell us about your experience in the banking industry.

Mulugeta Asmare: I have been working in the bank industry for the past 31 years. I have an all-round experience in the banking industry, meaning I had started work in the banking sector as a clerk and have now reached the position of general manager. I have worked as deputy president of Abyssinia Bank for four years-and-a-half until 2019. I believe that I was able to make a lot of reforms and changes while working at Abyssinia Bank. I was faced with a lot of challenges while working at this bank, since it had a lot of shortcomings at the time.

I believe that I have contributed a lot towards the betterment of the banking system at Abyssinia Bank, for it to get to the stage that it is in now. We started off by inviting global market leaders like Deloitte, PWC, KPMG, and Ernest & Young to participate in a bid to frame a five-year strategy for the bank. Winning the bid, Ernest & Young have done a remarkable job in improving our system-wide operations. We used to have such work done by in-house experts. So, this is the first time that we enlisted the services of a globally renowned company. We have focused on manpower development and raising pay, measures that have surely contributed to the development of the bank.

Following my previous stint with Abyssinia Bank, I used to focus on private contractual jobs here and there. I was informed of this new concept of establishing a mortgage bank system which was unique and different, and it got my attention. After establishing the bank and selling the shares and raising enough capital to establish the bank, we couldn’t find the right person to run it. The 11 founding members are well-known business professionals that have worked for years in the banking system, and they wanted me to take the role. I couldn’t say no to such noted personalities as former National Bank President Getahun Nana.

Before delving into the mortgage bank, I would like to raise a question regarding saving. Most people open bank accounts for saving purposes while few dare to ask for loans. Why do you think that is the case?

The major mission of a bank is to help develop the culture of saving. It is evident that once there is a saving, the next step is to provide a loan. Without savings, there are no loans. Customers can resort to saving for they have some future plans to invest or to purchase something, or it can just be a leftover from their monthly expenses. This saving is directly forwarded to producers and service providers who are planning to expand a business, or who are looking forward to enter into new business ventures. The main job of a bank is to act as an intermediary between the depositor and the borrower.

Banks have advanced and sophisticated role nowadays compared to the old times. I believe that low-scale savings at the banks is the main reason for the small number of loans. The loans are mostly provided to customers that have a convincing project idea with a guaranteed profit. You don’t find such projects every day, not everyone can be a producer, a service provider or a farmer. Banks have a limited access to capital and deposit, which is the reason for setting strict criteria. These are some of the reasons for having more savings while there are less loans being provided.

The last three years have seen a remarkable change in the banking sector. The number of private banks has increased to 23, including Goh Betoch Bank, which is managed by you, and an interesting enterprise at that. Why do you think private banks are increasing at such a pace? Is it because the banking industry is profitable?

It is obvious that the banking industry is becoming more profitable today than ever. All banks are recording a profit since the market demands such service. Even though our economy is underdeveloped, the banking sector is essential to reach the population that is not getting access to the service. Until recently, only 25 percent of the population was banked. But that is changing thanks to the increasing number of banks and the opening of branches in the regions. This shows that the market is still untapped. That being said, the capital requirement to establish a bank is also increasing drastically. The set of criteria laid down by the National Bank is complex. Therefore, I don’t believe that we have banks mushrooming left and right. For a population of 110 million, the number of banks we have is far from enough. I think the main challenge for potential new banks forming is the rules set by the central bank. Allowing specialized banks to open branches in the country is not yet a trend but it’s a must. We have paved the way as a mortgage bank but there can be many others that specialize in farming, industry, housing, import and export, etc.

Goh Bank specializes in the housing sector. I’m sure you’ve conducted a thorough research before establishing the bank, including the case of the then Construction and Business Bank. What is the sustainability plan?

The Construction and Business Bank has its own flaws. During the reign of the Derg, it was taken over by the government and it was functioning under the name of Housing and Savings Bank, the only service provider specializing in mortgage banking. It was later on transformed into a commercial banking system and was named as “Construction and Business Bank.” Keep in mind that both the Constriction and Business Bank and Commercial Bank were providing the same traditional banking service under a different name. The bank didn’t have enough capital. Therefore, it has struggled to keep in the same pace as private banks. The Construction and Business Bank later on merged with the Commercial Bank since it couldn’t stand on its own. This has caused a gap in the mortgage banking system. It provides a service that is in high demand. That is the main reason for establishing the Goh Betoch Bank with a view to addressing the problem. A lot of customers have savings in their account that is not enough to purchase a house without bank financing. These people can opt to switch funds used to rent a house in favor of mortgage payments.

Does the bank provide mortgage service or does it focus on commercial services?

The bank purely provides mortgage services. It is also registered with the national bank as a provider of mortgage services. We are the first bank in Ethiopia to offer this service. We have done rigorous feasibility studies. We haven’t provided any commercial loans to businesses. We only give loans to customers who want to buy a house.

Is there a push from the government to make the service partially commercial?

Actually, we are the ones pushing. That is since the country doesn’t have laws regulating such a specialized banking system. According to the law in the books, all banks are treated equally, be they private or government. But we are demanding a special treatment, and the national bank has lately been cognizant of this fact.

Do you cater to folks lower in the socio-economic ladder, and can you also reflect on the high cost of housing in Ethiopia?

It would take days to discuss issues regarding housing. In Ethiopia, there are many programs that were drafted in order to provide solution to these problems. For instance, the Integrated Housing Development Program was developed by the government in 1997. This condominium-housing project was later on developed into the ‘40/60’ housing. The idea was to construct a lot of housing units and help the general public own their house. A mere 400,000 housing units have so far been built. Many Ethiopians have been into the culture of housing saving schemes for years now. There is a study indicating that 400,000 housing units needed to be built every year in order to meet demand in Ethiopia. Specifically, 100,000 housing units should be constructed in Addis Ababa every year, but a tenth of that is being accomplished.

What is more, the already existing houses in Ethiopia do not meet habitat standards established by the United Nations. Based on this requirement, around 74 percent of the housing units in Addis Ababa need to be reconstructed since they do not meet the standard. The main reason for the soaring price of houses is the ever rising cost of land as well as construction materials. The paucity of hard currency coupled with unbridled inflation has worsened the situation. The current going rate for a housing unit is beyond the reach of middle and lower income citizens.

According to our study, medium income is 30,000 and up, way below the threshold to afford buying a new house. We should also look into our construction system that is backward and traditional. It takes two to three years to build a house. Time is essential; we should be able to construct houses in one year. If we want housing to be affordable, we should look into ways of cutting down the price of land and construction inputs as well as employing modern technology. Financing should also be factored in, and this is where we come in.

Apart from huge outlays by private banks, the government is also spending 50 to 60 million birr to construct condominiums. These houses are designed to be affordable to low-income people, but that’s not the case. How does your bank intend to make housing affordable to middle- or low-income citizens?

The housing problem can’t be solved only by private banks. The main role should be played by the government since having shelter is a human right. The government being a responsible body should provide land at a lower price or for free to the lower and medium income people. What’s more, the government should regulate the price of construction materials besides encouraging their ample supply. Banks as financers should also expedite provision of capital in the form of loans.

Most banks are reluctant to engage in mortgage banking. How come you chose it?

We dared to join the banking sector, especially mortgage financing, because of the need for one on the market. Our shareholders took the initiative to establish a huge institution that can support the country’s economy. The realty on the ground in Ethiopia is such that a 40-year-old individual lives with his or her parents. This is so due to the dearth of financing schemes to own one’s house. Therefore, we are trying to help individuals with limited means.

What is the plan this year as regards providing mortgage loans for customers?

We have started business since October 25. We haven’t provided much service because we just launched our bank a few months ago. But we are planning to provide one billion birr in loans until the end of the year. Based on the outlook of the economy, this might not be attainable, but that’s the plan.

How much would that be per client?

It depends on the customer. Some might take a 10 million-birr loan while others ask for more. Anyways, we are planning to provide 1 billion birr in loans until the end of this year. While framing this plan, we were under the impression that we can go around the country and find deposits, but there were many unforeseen events such as the war that disrupted the economy. Therefore, we might not be able to meet the target.

So there is no plan to provide this service to other regions?

We will cover other regions as well. We might not have many branches like other banks but being a mortgage bank, we are going to employ technology to scale up services. The main branch is in Addis Ababa while the second branch is in Dire Dawa and the third branch is around Lebu. The fourth branch in the CMC area goes online this month. We serve cities that have a high housing demand such as Hawassa, Adama, Bahir Dar,Gonder and Mekelle.

What do you think of foreign banks establishing mortgage banks in Ethiopia? How would they affect the already existing mortgage market?

Although I’m aware that foreign banks are joining, the timeline is not yet announced. A healthy competition is not bad; I don’t believe that they will take over the banking business instantly. The government will surely have some sort of plan in order to institute a gradual change. Some requirements might also be in order such as a fixed amount of capital. They should purchase shares to be able to establish a bank in Ethiopia. For instance, if a foreign bank buys 30 to 40 percent share from a private bank, then it will be perfect since they can invest in human-resource development and bring in capital for the existing bank.

Mortgage bank is no different from other private banks; I believe that foreign banks can help a lot since there is an untapped market. We can assist them in expediting the process of setting up shop. If foreign banks buy shares from us, then they can avoid that hustle. We would like the competition, although we are not sure when they can come to the market; we are preparing psychologically to work with them.

Can you briefly explain what it takes to get mortgage?

Those who seek loan at our bank, we welcome them all. We have started giving service for most customers now. It is required for the customer to save a minimum of 20 percent of the selling price of the house at our bank. And then, we can provide the remainder 80 percent. The other unique system is that we will provide 30 years grace period for paying the loan back to the bank. Our interest rate is lower than other banks’. For instance, Commercial Bank provides loans at 15 to 26 percent rate while we can provide loans for less. Our interest rate is flexible depending on the currency and frequency that a customer would return the loan. This makes us unique.

Customers can’t knock on any private bank and ask for a loan to purchase a house. Most banks provide a mortgage service to their employees, or for selected VIP customers that pay in foreign currency such as embassies, NGOs and exporting companies. We only require that a customer has a fixed monthly salary and that he or she can pay the loan back at the provided timeline. There’s also no need for any collateral since we use the house that will be purchased as collateral by itself. We are trying to reach the public with this information to mitigate the housing problem.

Since the public is very eager to get this service, what can we expect from your bank?

We would like to pass the message that any customer that has the financial means and the interest to purchase or construct a house, we are eager to help. Come to our bank, open a bank account and save the minimum amount of money required for purchasing the house that you want to have. We will advise you on the best option. We are also planning to construct houses by ourselves.

Shewit Emanuel is the current country director of Farm Africa, an international NGO established 35 years ago. It started out in Kenya but has branched out to Ethiopia, Uganda, Tanzania and the DRC.

Active in majority of eastern African countries, it is a specialized NGO focusing on natural resource management and business development linked to agriculture including livestock. Yosthena Aynalem of The Reporter sat down with Shewit to discuss smart agriculture in Ethiopia. Excerpts:

The Reporter: In a country where agriculture dominates, what would you say you have achieved thus far?

Shewit Emanuel: In a nutshell, one of the biggest achievements so far is that we exclusively work with smallholder farmers. What we are trying to do is to ultimately enable them to move out from poverty and become a commercial farmer who is self-sufficient.

Developing methodologies that are sustainable, inclusive and impactful is also one of our achievements. That’s our own target at the end of the day, when we leave, we want to make sure the work continues and the farmers continue to thrive with the support that we have started.

We operate all over Ethiopia. Unfortunately, some of the projects have ended in some regions, but we have footprints across all the regions within Ethiopia. The biggest achievement starts from increasing the income of the smallholder farmers we supported to reducing deforestation as well as supporting Ethiopia sell carbon credit to the international market. That is actually the newest achievement. We have also supported farmers to sell coffee directly to international markets.

Since vertical intégration is allowed now, farmers don’t have to go to the Ethiopian Ccommodities Exchange (ECX) anymore. If you can connect them with exporters, they can directly sell to the international market. The whole point is to reduce the middle men for the farmers and get the fairest prices for them.

Food insecurity is a recurring problem in Ethiopia and Africa. Many approaches have been applied to reduce food insecurity but nothing seems to avert it thus far. Is there any approach you have tried that is poised to be successful?

Nowadays, everybody’s moving into climate smart agriculture and unless all your interventions are becoming climate smart, you are bound to go back to that vicious cycle of droughts and flooding; which is both damaging to farmers. So, making sure farmers practice climate smart agriculture is the number one thing that we are working on.

One of the things that Farm Africa is actually pioneering and becoming innovative and a champion of is the use of integrated landscape management. This means to look at the challenge holistically, you cannot talk about conservation of land without talking about the livelihood of the people.

The majority of past projects, if you look at them, are about conservation without addressing why the community is damaging the environment? Unless you tackle that, you are not going to sustain it and all your efforts will be for nothing.

It also has to be inclusive of everybody. Most of the time, when a project starts, they focus on the direct beneficiaries. Let me give you a good example. One of our biggest projects is in Bale Eco region, where we’ve been operating since 2016. Initially, we were focusing on the regions communities and when the current drought occurred, the lowland communities came looking for water and resources towards the forest. So, all the conservation that we made, all the protection of the forest become under threat.

So, what we tried to do is expand our support, with the support from the Norwegians and other likeminded donors. It is not just the highland communities, but the lowlands are also included now. We have somewhat built resilience so that they don’t have to come to the forest.

And to be fair, even though 1.6 million people live within Bale, as direct beneficiaries, 12 million people depend directly on the forest. So, to address their need, everything from livestock fodder and irrigation is being provided, moving them into climate smart agriculture to become sustainable. They then become the protectors of the forest themselves, becoming part of the solution.

The approach we advocate for is an integrated landscape management where you can make your intervention impactful, sustainable and more importantly, inclusive of everybody, including women, pastoralists and nomads.

Does Farm Africa give lessons to these people or just resources?

Not exactly. When I say climate smart agriculture, there are different kinds of approaches that we use. Starting from the training itself such as when to plant, how to plant and what type to plant, and everything that has to do with linking farmers is included.

It could be providing improved seeds or making sure that they move to organic fertilizers or connect them to the local market. The majority of farmers’ problem is linkage; they just need to be connected with the agro-dealers so they can get the seed, fertilizers, and safe deliver of their harvests to the market. And once they produce, they can aggregate it and sell it at a good price.

We also support the enabling environment, which means working with the government to make sure that the necessary policies and protection are there. At the end of the day, we need to build the capacity of the government. They are the ones we are making sure we align with, since they will take it forward. We can show it on a small scale for the government to expand it at a larger scale.

The climate smart market systems project in Amhara region that we piloted, is now being rolled out to all over Ethiopia, modified depending on the region and soil conditions. The value chain may be different, but in terms of supporting the full spectrum of the value chain, that’s what we do, so that farmers have the right tools and information on a timely basis.

Urban farming is something that is said will reduce food insecurity and that you are doing something along those lines. Can you tell me more about those projects?

Sure. When Farm Africa was actually set up, our attention was exclusively focused on rural farmers, but what has become very clear is that you cannot address the rural challenges if you are not addressing urban challenges.

Urban poverty is on the rise and food insecurity is becoming as critical as those in rural areas.

The government requested us to support them on how to improve urban agriculture. With that, we started to pilot a project in the Ministery of Planning and Development’s compound because they have the space. We have started testing out the pilot phase, trying to look at what urban agriculture looks like, if it is sustainable, and how the farming methodology works.

We are now actually setting up; the clearing has been done and the design has been finalized. We are left with the planting processes, and we hope in the next couple of months to have the first produce available. It’s not just crops we are producing. We are also piloting fish as well as poultry so that everybody can practice it.

If you were to go to rural areas, there is space, you can do horizontal farming, but in urban areas, we don’t have that space. However, vertical agriculture is the answer. We are coming up with new kinds of innovative ways to produce food at a scale that is required to feed the local community. We are working with around 105 households for now, including women and unemployed youth. We just started that this year. So, it’s still at the early stages.

So what can urban settlers do? Like you said, these projects will encourage them, but considering there’s inflation now, there’s even more food insecurity, which is compounded by the war.

That’s why we encourage the use of your back backyard or whatever space you have. It does not require space. What we are trying to show is that you can do this vertical farming. Within a limited space, you can actually produce enough, to feed your family at a lower cost because inflation is becoming an issue. Families are barely feeding themselves, so at least it supplements their food intake and more importantly ensures nutritional balance.

Scholars suggest encouraging farmers to diversify their source of income to fight food insecurity. One of the options is to promote off-farming activities. Is that being implemented? If so, is it working?

Unfortunately, this concerns the lack of knowledge. The diversity is not as much as you would expect it to be. As part of the business development, we exclusively focus on income generating activities that you can do beyond agriculture. You need to diversify.

The coffee producers used to only produce coffee and farm forests. So, instead of farming the forest and cutting down trees, we showed them they can do forest honey, forest coffee, incense and other products, helping them to diversify their income stream.

A lot of the evaluation reports can be shared on, for instance, income. We increased their income by 143 percent. Not only were they able to increase the volume but also the quality. Now, almost all our projects, be it in Bale or Illu Aba Bora, all of them are now 100 percent export quality standard. And by supporting them change into a cooperative, they could buy better machines and so on, to aid in the quality of the product, instead of using traditional means and do less damage to the product. The coffee they produce now has scaled from grade six to grade one.

But you need to provide them the option and training, ranging from the know-how, all the way to even financial literacy. We do a lot of voluntary saving and loans, by setting them up with associations so that they are able to save money and get loans to buy better inputs and be able to negotiate better with dealers.

Ethiopia has been hit by a drought recently and many cattle have died as a result. There are other east African countries going through the same thing, probably in countries Farm Africa is involved in. So why do you think countries like Ethiopia are being affected by these things more often than the rest of the world?

Unfortunately, we are still rainfall dependent and one of the biggest impacts of climate change is making this cycle of drought more frequent than ever before. It used to occur every 10 years or so but now it happens every two or three years.

So, unless we equip both the highland and the lowlands with the necessary climate smart interventions, they will still suffer. We have a huge project in Borena and mobilized fodder to be delivered as an emergency, because the animals are crucial for their livelihoods. I think it was reported to cost more than five million birr.

The second one was to make sure the ecosystem is protected because that generates the water that goes to the lowlands. The intervention here has a huge impact at the lower catchments. That is why you need to make sure your interventions are holistic. Just by protecting the Bale eco region, you protect 12 million people’s livelihood, livestock and food.

The support is not only in providing materials, but to improve small–scale irrigation, pound point constructions and watershed management, to become drought resilient.

Several projects have been implemented by donors and other NGOs that work on resilience, capacity building and the like. But soon after their launch and brief success, they dwindle out. What do you think is happening in the middle? Why does the impact subside quickly?

The problem lies in the projects design. You have to plan to make it sustainable. When we set up a project, we have to prioritize carefully. If you don’t do that, then what happens is you’ll just be replacing one challenge with another and the impact would be temporary.

Our intervention should be as a facilitator, not actors. If you become an actor, then you are disrupting the market. What we are trying to do is to become the catalytic process, by working clearly with the government, like the Ministry of Agriculture and other stakeholders, so that policies do not contradict.

When we set up the project initially, deforestation was very high. Awareness raising and capacity building campaigns were held not only with the government, but also the communities, on why they need the forest, and understanding why the forest was damaged was very critical.

By introducing a specific blend of coffee, which grows under a shade, to farmers, which fetches a higher market price, the community has started to protect the forest by themselves. By giving them ownership and accountability, when you leave, it will not stop.

That is why you have to be very careful and make sure you have addressed the challenges that surround it.

You mentioned traders usually get more money than farmers, and Farm Africa is doing things to help in this aspect. Could you elaborate more on that?

First, you have to improve their yield per hectare because they usually sell it to the local market due to the low yield of crops they harvest. So, increasing the yield per hectare and then the quality is crucial. Empowering and connecting them with the market also helps them know the market value of their products.

women are paid less in the coffee sector, even though they do just as much, if not more. Is there anything done to empower women into joining the sector?

We assessed where women were involved in the value chain of coffee. The majority of women were found at production sites, such as planting or coffee picking, but you see them less involved as you go higher in the value chain. That is why they earn less because they’re at the lower end of the value chain.

We are trying to build the capacity, knowledge and their participation at the higher end of the value chain and make sure they’re involved outside of the production itself. They must have the power and skills to take their matters to the union and get better prices. And in parallel, find them the necessary financing. That is why around 80 percent of our beneficiaries are woman.

Do you get resistance from the community while doing this?

Not so much. We undertook awareness raising campaigns before we started, to make sure they understand why not everybody had to be part of the growth, but nobody should be left behind at the end of the day either. That’s our principle.

Since the demand for coffee is so high, they don’t see it as competition, they just need more support. It is usually competition that makes you push each other a lot of the time, but now the demand is so much, especially for forest coffee, what’s available is not enough.

Unfortunately, the drought has affected us this season and the amount of coffee we are selling this year is going to be less than last year.

Is there any forecasts as to what the effects of the drought will look like in the coming few months?

No, we have not done that per say, but I know FAO is working around the forecast. We’re coordinating, collaborating and sharing our lessons, not just with likeminded NGOs, but with the government and donors, so that our aggregated knowledge can be able to solve the problem. We are also coordinating with the Disaster Risk Management Commission right now, chaired by the FAO.

Another major problem in Ethiopia’s farming sector is landlessness. Authorities would like to hear recommendations to avert problems arising due to landlessness. What would you like to recommend in this regard?

So, we are not going to solve the issue of land, but what we can do is to come up with ways that we can use the land efficiently and effectively. Once the farmers understand how to increase their yield per hectare, they can increase their labor input as well.

For example, when one of our coffee farmers started working with us, he could barely feed his kids or even send them to hospital. Now, from the coffee sales, he has not only generated substantial income, but has also diversified and is setting up stores in Bale. He also managed to employ 24 youth to help him in the coffee production.

So that’s how we address it by making sure you are climate smart and generating the number of jobs needed to absorb landless youth. Otherwise, you cannot solve the land issue, what you can do is only give access to it.

There are a lot of mechanisms you can do to address the issue. But from Farm Africa’s point of view, what we’re trying to do is to increase the yield per hectare and capabilities of farmers, so that they can hire more people.

From your experience, what has been the hardest thing to overcome in Ethiopia?

We haven’t been able to address or mitigate the impacts of climate change. For me, it’s always been three steps forward and three steps backwards, but we are going in the right direction. Until we address and minimize those impacts and make sure that the farmers move from rain–fed agriculture to a more sustainable climate smart agriculture, it will be difficult.

Access to information and inputs is crucial. We are doing a lot of studies on value chains, different crops and fruits and pulses, and are we disseminating enough information to everybody to make an informed decision, so that they can produce what the market wants.

If you go to speak to most of the farmers in rural areas, they produce using traditional practices. If they do not wait for rain anymore, then they can produce more harvest per year.

Does Farm Africa work on logistics as well?

No, not on logistics, but we try. What we are trying to do is to connect them with the dealers so they can come. The dealers will only come if they can find value. That is why we want to make sure the farmers are organized in cooperatives, so that when they come for the coffee, they can get 40 tons to 50 tons. The volume will make it interesting for the private sector. But, the private sector has to be part of the solution as well.

Do you have any comments regarding the crisis that is going on in the country right now and how it’s affecting the agricultural sector?

As an NGO, we are not allowed to talk about it. We are not allowed to talk about rights. But, Farm Africa is committed to support the reconciliation and recovery process. That’s where we can come in because we are not even a humanitarian organization. So, we can’t even support these kinds of interventions.

What we can do is once stability and security is established, we can quickly go in and support farmers to quickly recover and catch up with the coming harvest season. So, through the post conflict recovery, we have a lot we can contribute, but beyond that, not so much.

Is there anything you’d like to add that would help authorities, individuals or farmers?

Working with farmers is still the solution. They have the knowledge and know-how; you just have to be the catalyst to help them and enable them achieve their goals. We want to make sure the economy thrives.

We need to improve our productivity and production. Everyone including the government, NGOs, beneficiary communities themselves have a role to play to contribute to this. If we do that, we are able to not only feed our own society, but be able to export and help others.

Eskinder Nega is a household name in Ethiopia. Known for publishing newspapers with articles critical of the government, Eskinder has been in the media industry for over 25 years. In 2019, he established Balderas Political Party.

Though he lost the last election to the ruling party, he is still actively participating in political matters. He was among the people arrested in the aftermath of the killing of Hachalu Hundessa and was released a year and a half later on January 2022.

The Reporter’s Amanuel Yilkal and Samson Berhane sat down with Eskinder to understand his journey in the media industry and politics. Excerpts:

The Reporter: Let me take you back to the 90s when you started publishing Ethiopis after your return from the US. How were you attracted to the media world?

Eskinder Nega: I lived in the US for many years. When I returned to Ethiopia, the country was in the midst of changes. There were many magazines, while the only privately-owned newspaper was Eyita. The magazines were not assertive and they feared criticizing the government and its policies. They used to beat around the bush.

I was able to learn a lot from the media environment in the US, which is free to criticize the government without being censored. It is not because I am a daredevil (Jebdegna) as some see me but since I was aware of the media landscape in the US, I wanted to try a new thing.

Then I started publishing Ethiopis, a publication that was ardently challenging the ruling government back then. It continued till October 2006. Ever since I started publishing the paper, I was a target of the Tigray People Liberation Front (TPLF). I was in custody for over 10 years in the period of the TPLF-led government and another one and half years after the then Oromia People Democratic Party (OPDO) started to lead the country.

You were arrested for the first time due to a column dubbed “Fascism in Tigray” that appeared on Ethiopis.

“Facism in Tigray” appeared in the second edition of Ethiopis. The first edition’s cover story was the “killings at Sidst Kilo.” It was initiated after the death of students who opposed the secession of Eritrea from Ethiopia. It was a story that made officials angry. And when we published “fascism in Tigray” in the second edition, we became a target. May his soul rest in peace; Tesfaye Asmare was the Editor-in-Chief of the paper, while I was a publisher back then.

We did the “Fascism in Tigray” story because people in Tigray were not allowed to be a member of a party other than the TPLF back then. Those who did not become a member of the TPLF back then were not only being arrested but were also being isolated from Idir and other social institutions.

Many were isolated just because they didn’t want to be a member of TPLF. We opposed this in our article. The situation in Tigray was no different from totalitarianism, while what was happening in Addis was authoritarianism. The TPLF was controlling every step of the people in Tigray, where there was no freedom of press. In Addis, there was a freedom of press, though it was limited and was a show to create an image that the media landscape is improving after the fall of the Derg Regime.

You are saying the “Fascism in Tigray” column intended to voice the concerns of people in Tigray. However, this goes against what another newspaper of yours was publishing in a column dubbed “Wegid Yihuda”, authored by Tadios Tantu. Articles written under this column were for long criticized for belittling ethnic Tigrayan’s.

Whenever you criticize dictators, they always give you a name. When we were publishing Wegid Yihuda, there was always another article that argues against what was written in it. The column always revolved around the history of Ethiopia. It discusses about King Yohannes IV.

When the British Empire invaded Ethiopia, it was him who received their army at Hamassien. This led to the death of King Tewodros. Tadios Tantu argued this is a betrayal and TPLF is born from such a history.

Do you consider this story as a common history of Ethiopians? Or are you blaming one ethnic group for it?

When Yohannes IV allowed the British to enter Ethiopia, he was not alone. He was assisted by King Teklegiorgis (also known as Wagshum Gobeze) who allowed the British to go through his territory to Mekedella. All of these are a part of our history. Yet I believe we did not learn from it. That is why I allowed the column to be published.

However, I have not gone through each of the words of the articles appearing on Wegid Yihuda. At that time, I was editing stories appearing on three publications with a scarce resource and professionals. We used to call it guerrilla journalism. While fighting the government, we were facing critical shortage of resources. In the midst of such challenges, there were several points that were published, though they were not supposed to be printed.

However, the aim of the article was not to disparage the image of Tigrayans. I never have been an enemy to Tigrayans and I will never be. The same goes with Oromos, even though many accuse me of being an enemy to the Oromo people. We were accountable to the contents appearing on the newspaper. We may have made some mistakes.

I cannot say mistakes were never made when we were publishing articles under the column. I apologize if we made a mistake and for the error. Yet, one thing is for sure, it was never our intention to portray the people of Tigray as our enemy.

You have been given several awards while you were in the media sector. Many also say you have paid a big price for journalism, while some claim that you are an activist rather than a journalist. For you, what are the things you have contributed for the development of journalism in Ethiopia?

Journalism can only prevail in a country where democracy exists. When you try to practice pure journalism in an undemocratic state of affairs, you face several challenges. Undemocratic elements of state target you not because you do not follow the ethics of journalism; rather it is because they don’t want to accept the truth or the reality on the ground.

It is the lack of objectivity that strains your relationship with the government. It is because a dictatorial government doesn’t accept the ethics of journalism. Under such a state, you cannot practice your journalistic profession and when you fail to do so, what you do is fight for your rights. You will also be forced to be an activist, a reality that you must accept because of the situation on the ground. The press in Ethiopia passed through such challenges. Our first aim was to practice journalism.

However, in our second edition, after we published the “fascism in Tigray” story, I was arrested and tortured at Meakelawi Prison. Since then, I was fighting for my rights. On one hand, I was practicing journalism. On the other, I was practicing activism.

We were not able to bring the experiences of the west and practice it here. That happened because we were operating in an undemocratic state, while the opposite is true in the western countries. Of course, when we build a democratic state, it will be the right time to talk about journalism.

Why did you become a politician before exercising what you called “pure journalism?”

In 2006, the TPLF suspended licensing of media outlets. When we got out of prison in 2007, we were hoping everything would go back to what it was and we will be allowed to reopen our media houses.

However, the TPLF-led government refused to give us a license. I then decided to become a human rights activist. I was arrested again in 2012 and remained behind bars until 2018. I then started publishing Ethiopis.

Soon after, the issues of special interest on Addis Ababa became a public agenda. To respond to this, I became an advocate and founded a civil society organization. However, we were not able to get a political party that pushed for the implementation of what we were advocating as a CSO. That forced us to transform the CSO into a political party and I became a full-time politician afterwards.

When you founded the party, you were saying your goal was to fight for the rights of residents of Addis Ababa and even Balderas is registered as a regional party of the capital city.

However, after your release from prison recently, you claimed that your plan from the beginning was to establish a national party. Is that not contradictory?

The problem of Addis Ababa is an outcome of nation-wide problems. Addis Ababa is not facing a challenge of its own. Its current problems are born from a dictatorial form of government. When we founded the CSO, our aim was to avert problems faced by the city and its residents.

We were hopeful that EZEMA [Ethiopian Citizens for Social Justice] will achieve what we wanted for the city, but that failed to happen. When we were opposing against special interest of Oromia in Addis Ababa, we went to the public to sell our ideas. Beyond that, we picked EZEMA to make our objectives a reality.

EZEMA’s closeness to the ruling party did not comfort us. In fact, EZEMA was the flip side of the coin when it comes to the ruling party. As we were not able to get a replacement, the public started to ask how we are going to implement what we wanted at a policy level. As a response, we established the party. However, as there were only four months left for the election, there was no time to establish a national party. That is why we were limited to Addis Ababa.

But as I said earlier, the problems faced by Addis Ababa can only be solved if national problems are solved too.

As a party that claims to fight for the rights of the residents of Addis Ababa, for you, what are the major problems faced by the city’s residents.

Residents of Addis Ababa want to see a democratic Ethiopia, a country with no risk of disintegration. They want a united country. Secondly, what they want is a universal democracy.

It is not a system of government that we create together as the current Prime Minister does. They want a universal democracy that is being practiced in the US, West Europe, India, South Africa, Japan and many other countries. That is what Ethiopians want. It is no different for Addis Ababa, who has the same vision for their country as other Ethiopians do. There are many problems born from a dictatorial government. The issue of special interest in Addis Ababa is also an outcome of such a system.

As home to several ethnic groups, there is a need for the introduction of more working languages in Addis Ababa.

After Prime Minister Abiy Ahmed (PhD) came to power, a new policy has been put in place that aims to increase the working languages of the federal government to five.

That did not follow the right procedure. It needs a legal amendment. The law works for everyone. Especially the government, it has the responsibility to uphold the law. At the national level, we all agree on the need for more working languages.

However, in Addis Ababa, there is no need to add more working languages. Amharic is enough. I never heard the people of Addis Ababa demanding for more working languages.

But there are ethnic Oromos demanding for the addition of Afan Oromo as a working language of the capital, along with the Amharic language. Have you ever conducted a survey to reach to such a conclusion that there is no demand?

I never encountered such a claim. Let alone in Addis Ababa, there was no such a demand even in cities surrounding the capital. Even in rural parts of these cities, residents speak two local languages, including Amharic.

We have not conducted a study. But we did not come across such a demand. I will apologize if I encounter anyone asking for the introduction of more working languages.

Critics say your party focuses on fueling violence. Your party is present wherever there are protests or riots. And you are rarely seen coming up with policy recommendations and solutions for problems faced by citizens. How are you going to address this criticism?

Some say we focus on issues of little importance to the public. That comes from two directions. The first is a concern coming out of kindness. The second is an attempt to silence us. And it is also an action taken to imprison us again.

There are people who believe things that we are giving an emphasis, like demolition of houses, can be solved by taking administrative measures. We have to awaken the public by publicizing and following each problem. We want to make the public aware that a problem that compromises the existence of Ethiopia as a country is happening and they must debate on it.

Supporters of ethnic federalism argue that regions should continue to have the right to secede. However, you argue that secession should not be allowed. Is that not against democracy?

Take India as an example. It is a model of democracy. But it does not allow secession. See the case of Kashmir. The Muslim majority living in the city want to secede from India and be part of Pakistan. That was why they were fighting an armed struggle for the last 80 years. There are also Indian states that want to secede but the law of the country prohibits them from doing so. The same is true in other democratic states, including South Africa and Nigeria.

In Nigeria, the attempt to secede Biafra failed, while the country’s law bans any federal state from doing so. Yet this does not make Nigeria an undemocratic state. The issue of the Catalan’s is no different. The administrators of Catalonia held a referendum and declared independence from Spain. But where are they now? They are in exile in Belgium. So does that mean Spain is not a democratic country? No!

To ensure the existence of Ethiopia and avoid of the risk of disintegration, secession must be prohibited. It is not Balderas that came up with such a rule for the first time. It is based on the experience of many countries across the world.

Agriculture is still the main driver of the economy, whether we like it or not. And we have to make sure it contributes to the GDP as its intended. I think we just have to keep our eyes on the ball.

We have collaborated with other organizations in order to increase our capital as well. Upon our establishment, our bank had one billion and fifty six million birr. Next year, we are planning to raise two billion birr by selling two million shares. We will give first opportunity to buy shares to existing share-holders and then it will be open to the public. The government has set out a rule whereby private banks have to have seven billion birr in capital in the seven years. We have six years to raise the other five billion birr.

We have collaborated with other organizations in order to increase our capital as well. Upon our establishment, our bank had one billion and fifty six million birr. Next year, we are planning to raise two billion birr by selling two million shares. We will give first opportunity to buy shares to existing share-holders and then it will be open to the public. The government has set out a rule whereby private banks have to have seven billion birr in capital in the seven years. We have six years to raise the other five billion birr.

Ethiopians have demonstrated on ample occasions that they will never tolerate anyone bent on advancing their selfish political agendas by sowing instability and thereby jeopardize Ethiopia’s very survival. All political actors need to abide by the notion that each and everything they do must be guided by the vital interests of the country. They also ought to realize that Ethiopia is much more about than the trappings of power, bankrupt ideologies belonging to the dustbins of history, manufactured historical narratives, ethnic and religious identities, and obsession with flags and emblems. It’s then that its citizens can embark on the journey to building a democratic nation that is the epitome of strong unity, durable peace, and sustained economic growth.

The panoply of challenges facing Ethiopia and its people show no sign of respite. Though active hostilities in the northern part of the country, have almost stopped after the forces of Tigray People’s Liberation Front (TPLF) were pushed back to Tigray from most of the territories they had captured in the adjoining Amhara and Afar regions, the security situation in a number of areas of the nation is fragile owing to the interminable endless cycle of violence that has been racking them for years now. Aside from the death of tens of thousands and the displacement of millions frequent outbreaks of internecine conflicts have led to, the unchecked rise in extremist attitudes, the cost of living, corruption, and land grabbing, among others, have made life an ordeal for the vast majority of Ethiopians. It’s in this backdrop that an incident, whose fallout could potentially plunge Ethiopia into a crisis of catastrophic proportions, recently took place.

On March 29 at least 26 people were killed and several more injured in clashes between armed groups hailing from the Minjar Shenkora Woreda of North Shewa Zone, Amhara regional state, and local militia in the bordering Fentalle woreda, East Shewa Zone of Oromia regional state. The blame game began soon thereafter with both sides issuing conflicting a slew of contradicting statements regarding the incident. Amhara region officials lay the blame on “anti-peace groups” whom they accused of perpetrating the attack. Their counterparts from the Oromia region though disputed the accusation, blaming the attack on “extremist forces operating in the Amhara region”. They also took these forces to task for displacing people and looting property in other woredas of Oromia bordering the Amhara region. It’s surprising that both the federal government and the ruling Prosperity Party (PP) have not made any overt attempt to defuse the tension between the Amhara and Oromia regional administrations even as both escalate the war of words among them.

The feuding between officials heading two branches of the ruling party cannot be confined to them given the party is still ethno-centric despite claiming to be a national party. In fact it has led to spats among major opposition parties active in the respective regions and social media activists, which are spewing a hateful rhetoric that could very well pit the Oromo and Amhara people, the two largest ethnic groups in Ethiopia, in a bloody conflict. The consequences of such a conflict are too horrible to contemplate. From a protracted and destructive civil war in which no side emerges victorious to a total state collapse all the scenarios facing the nation are lose-lose not only for its citizens, but also the Horn of Africa and beyond. It’s not entirely clear whether the protagonists to the ongoing verbal warfare realize that their actions are liable to lead to Ethiopia’s unraveling or are indifferent to the ensuing heavy price.

Ethiopians have demonstrated on ample occasions that they will never tolerate anyone bent on advancing their selfish political agendas by sowing instability and thereby jeopardize Ethiopia’s very survival. All political actors need to abide by the notion that each and everything they do must be guided by the vital interests of the country. They also ought to realize that Ethiopia is much more about than the trappings of power, bankrupt ideologies belonging to the dustbins of history, manufactured historical narratives, ethnic and religious identities, and obsession with flags and emblems. It’s then that its citizens can embark on the journey to building a democratic nation that is the epitome of strong unity, durable peace, and sustained economic growth.

Two pieces of legislation entailing catastrophic consequences for Ethiopia and its people are meandering through the United States Congress. The first, whose official moniker is H.R. 6600: Ethiopia Stabilization, Peace, and Democracy Act, is pending before House floor after it moved out House Foreign Relations Committee in mid-February. Entitled S. 3199: the Ethiopia Peace and Stabilization Act, the second was approved this week by the Senate Foreign Relations Committee for consideration by the full Senate. The bills require the President of the U.S. to impose sanctions on foreign persons the Administration determines to have “threatened peace and stability, undermined progress toward a ceasefire, obstructed humanitarian assistance, or violated human rights in Ethiopia.” They would also would suspend certain U.S. foreign assistance to Ethiopia and authorize the Administration to help entities investigate and seek accountability for war crimes, crimes against humanity, and genocide in that country. Furthermore, the bill would require the Administration to “develop and implement a strategy to promote peace, reconciliation, and human rights in Ethiopia and to report to the Congress on its actions under the bill and on other related matters.”

Ever since the forces of the Tigray People’s Revolutionary Democratic Front (TPLF) launched an unprovoked attack on the Northern Command of the Ethiopian National Defence Forces (ENDF), the bilateral relationship between Ethiopia and U.S. have broken down following the U.S.’ adoption a series of measures intended to arm-twist Ethiopia into choosing its side over China in the new cold war. Although the two countries have recently shown signs of improvements in their relations with the allocation of additional U.S. funds in support of different regional states and institutions in Ethiopia, the U.S. is still bent on applying more sticks than carrots to accomplish its strategic goal in Ethiopia and the wider region. The passage of these blatantly biased bills is sure to negatively impact Ethio-U.S. relations for they erode the trust, predictability and mutual cooperation on which they should be based.

What makes the contents of H.R. 6600 and S. 3199 more galling is the fact that they place no sanctions or threats of one against the TPLF despite its instigation, expansion and prolonging of the civil war as well as the commission of crimes of atrocities. In addition they fail to give due recognition to the steps the Ethiopian government has taken to bring a peaceful resolution to the civil war. Chief among these measures are the withdrawal of the ENDF from the Tigray region in June 2021 following the unilateral declaration of a ceasefire; the streamlining of aid delivery to the regions affected by the war; ordering the ENDF to not cross into Tigray after TPLF forces were routed from the positions they held in the adjoining regions they had invaded in December 2021; releasing several politicians, including TPLF leaders, from prison in January; lifting the six-month State of Emergency declared after three months; and declaring a humanitarian truce to facilitate the delivery of aid to the conflict-affected people of Tigray. Such inequity only serves to deepen Ethiopians’ distrust of the U.S. and its allies.

Punitive sanctions do more harm than good and seldom achieve their intended outcome. The US has not secured democracy, peace and stability by imposing debilitating sanctions on any country in the world. It is the poorest of the poor, low- and middle-income Ethiopians who will suffer the most by the passage of H.R. 6600 and S. 3199, not the government officials they target. The sanctions will adversely affect regions which have already been hit very hard by the war, including Tigray, Afar and Amhara given they make it very difficult to source the materials needed to reconstruct the health, educational infrastructure the war has ravaged as well as the resumption of other critical services. Moreover, by calling for an independent investigation into conflict-related human rights violations, the bills signal lack of confidence in the Ethiopian Human Rights Commission, whose report on a joint investigation undertaken with the U.N. Human Rights Commission on the war in Tigray, was endorsed and applauded. The debilitating impacts of the bills on a poor nation like Ethiopia will be devastating and apt to linger for years. This would lead to the very instability and fragility of Ethiopia that the U.S. ostensibly wants to prevent.

In a rare foray into engaging Ethiopians in candid dialogues since the advent to power of Prime Minister Abiy Ahmed (PhD) in April 2018, senior officials of the ruling Prosperity Party (PP) have fanned out across Ethiopia to hold dialogues with citizens from all walks of life. The discussions come on the heels of the premier’s pledge at the conclusion of last week’s meeting of the party’s executive committee that party officials would soon be dispatched throughout the country with a view to seek durable solutions to multi-pronged challenges in collaboration with the public. The party said the dialogue has two underlying objectives: informing the public about the decisions of the party’s first Congress held at a fortnight ago and reaching a consensus on the respective roles of the public and the government in the search for solutions. By most accounts the participants were apparently able to voice their views without any inhibition. Time will tell if the party is committed to heeding them.

The topics raised at the discussions largely coincided with the areas of focus PP’s congress vowed to tackle. Chief among these are the deteriorating security situation in large swathes of the country; the debilitating hike in the cost of living; the rise of extremism and exclusionism; and the proliferation of corruption and other forms of bad governance. The crux of the impassioned and sometimes angry views expressed by the public was that the blame for the current state of things squarely lay with the government. While some acknowledged that the plethora of problems besetting the nation and its people predate the government and thus absolve it of some degree of culpability, most did not buy into this line of reasoning saying that the government lacked both the desire and capacity to put paid to them. In fact, they argued, the rank of the government has been infiltrated by duplicitous elements intent on advancing their selfish interest or the sinister agendas of domestic and foreign enemies. The government would do well to take immediate corrective actions for the extent to which it genuinely responds to the demands of citizens will determine if and how long it may remain in office.

The gravest of the grievances voiced by everyone participating in the discussion forums is the cycle of violence that has been rocking Ethiopia for some years now. From the frequent outbreak of internecine conflicts and targeted attacks to the war in the Tigray, Amhara and Afar regions thousands of innocent citizens including children and the elderly have been butchered and injured with millions more displaced from their homes. Though the public has demanded time and again that the government protect its safety and security and bring the perpetrators of acts endangering its welfare, the latter has been found wanting when it comes to ending the recurrence of senseless carnage. The government’s predictable response to the calls for it to guarantee the fundamental rights of citizens to lead a secure life anywhere within the territory of Ethiopia has been to vow that it’s committed to upholding the rule of law. It must stop paying lip service to a matter of grave importance and back up its promise with action.

The second and equally pressing matter that arose during the course of the discussions was the backbreaking cost of living. The interminable escalation of the headline inflation rate has meant that life has become a living hell for the vast majority of Ethiopians and pushed a significant chunk of the population into poverty. There are a host of reasons driving inflation. One of them is the inability of the government to formulate and implement monetary policies instrumental to contain if not bring down the phenomenon. Its failure to allocate sufficient foreign currency to importers of basic necessities and eliminate the predatory behavior of unscrupulous market actors have further contributed to exacerbating the inflationary pressure. Although the government can do nothing to halt a significant contributing factor—the rise in the price of fuel and imported food items—it is incumbent on it to seek both short- and long-term solutions through meaningful consultations with the general public. Undertaking a course of action that does not take into consideration the views of everyone who has a stake is bound to fail miserably and worsen the problem. The serious ramifications of the spiraling inflation, namely stirring widespread public discontent that triggers political and social unrest, is something the government needs to wise up to and take appropriate steps to neutralize them.

As much as the government bears the primary obligation of easing the suffering Ethiopians are undergoing, it cannot succeed if it tries to go it alone. Aside from empowering political parties, religious organizations, educational institutions, civic and professional associations, elders, the youth and women to play an active role in the search for informed solutions, the government is duty-bound to clean its house and purge officials and functionaries in its structures who are complicit in the very problem they are supposed to fix. Important as organizing dialogue forums may be in garnering the views of the public, it’s paramount to ensure that they are inclusive. It’s only then that the government can effectively respond to the demands expressed by the public in the recent discussions.

As some U.S. lawmakers and lobbyists engage in a concerted endeavor to force Ethiopia into kowtowing to the demands of the West, it is incumbent on the government, people and friends of Ethiopia to do everything possible to foil their sinister design. While efforts are underway both at home and in the U.S. to stop H.R. 6600 and S. 3199 from seeing the light of day, they should be ramped up until the bills are defeated. It’s disheartening though to see some citizens and members of the diaspora community side with the sponsors of the bills. Ethiopians should not despair just because the bills have advanced to the House and Senate floors. In order for them to become law they will need a full vote of both chambers and the signature of President Joe Biden. There are several things that can be done in the meantime to ensure that even if the bills pass they are defanged and unrecognizable from their current form. It’s imperative that we keep up the fight to the death and resolutely defend our national interest.

The inability of the political class to resolve differences through discussions and negotiations has for far too long been a hallmark of Ethiopian politics. There is no disagreement under Ethiopian skies, however deep-seated it may be, that cannot be addressed through genuine dialogue. Politicians that truly have the interest of Ethiopia and its people at heart owe the duty to ensure that they comport themselves in a manner that advances the interests of the nation, not their selfish motives or the agendas of adversaries intent on doing the country harm. They need to work together to facilitate Ethiopia’s smooth transition to a democratic order, uphold the rule of law, and enable citizens to have access to justice. Furthermore, it’s incumbent on them to play an exemplary role in terms of, among others, rejecting discriminatory attitudes and practices, creating a mutually respectful relationship amongst themselves, and forging a culture of constructive dialogue. It’s then that the calamitous ramifications of the war of words between members of Prosperity Party can be averted.

The inability of the political class to resolve differences through discussions and negotiations has for far too long been a hallmark of Ethiopian politics. There is no disagreement under Ethiopian skies, however deep-seated it may be, that cannot be addressed through genuine dialogue. Politicians that truly have the interest of Ethiopia and its people at heart owe the duty to ensure that they comport themselves in a manner that advances the interests of the nation, not their selfish motives or the agendas of adversaries intent on doing the country harm. They need to work together to facilitate Ethiopia’s smooth transition to a democratic order, uphold the rule of law, and enable citizens to have access to justice. Furthermore, it’s incumbent on them to play an exemplary role in terms of, among others, rejecting discriminatory attitudes and practices, creating a mutually respectful relationship amongst themselves, and forging a culture of constructive dialogue. It’s then that the calamitous ramifications of the war of words between members of Prosperity Party can be averted.

Best known for playing a big role in establishing the Association of Chartered Certified Accountant Ethiopia (ACCA), Hikmet Abdella is currently the Director-General of Accounting & Audit Board of Ethiopia (AABE). She has been holding the position since 2019 after replacing Gashe Yemane, the founding DG of the Board.

Hikmet has been tasked to complete the path to full implementation of International Financial Reporting Standard (IFRS) in the next three years.

The Reporter’s Ashenafi Endale sat down with the Director General as she reflects on the path taken to make Ethiopia’s audit and accounting standard comply with internationally accepted principles and rules. Excerpts:

The Reporter: How is the progress of Accounting & Audit Board of Ethiopia (AABE) in professionalizing Ethiopia’s auditing system?

Hikmet Abdella: Financial statement is the cornerstone of any institution, whether they are business entities or NGOs. But Ethiopia had no financial statement standards for a long time and there were also no standards for professionals.

The Accounting and Auditing Board of Ethiopia (AABE) was established under such context. Before the AABE, the Auditor General (AG) used to provide licenses and undertake supreme audits for public institutions. So licensing auditors, accounts and firms was an additional job for the AG, at that time. It gave the licenses but had no capacity to control and regulate them.

A World Bank study in 2007 indicated that Ethiopia’s economy was growing faster and there is no accounting and auditing professionals that matched the growing businesses. The AABE was established based on this recommendation.

The AABE’s task is to license accountants, auditors, firms and regulate them. We also adopt and implement internationally accepted auditing standards in Ethiopia. These professionals undertake audits and submit documents to the AABE. We have a library of firms’ files.

Which companies are difficult to control? Which company structures are more complicated in Ethiopia?

Our prime priorities are Public Interest Entities (PIE) and the AABE is basically established to protect these entities from failing. If a company fails, it might not have much impact on the whole economy but if PIE fail it will have a wider economic impact.

Different countries have varying definitions for PIE.

PIE is defined qualitatively and quantitatively. For instance, financial institutions are PIE with huge numbers of shareholder’s with interests. They collect savings and give loans. So they must be protected from failing. Secondly, SOEs are protected because they are the highest taxpayers.

MFIs and share companies are our next priorities, while PLCs are our last priority. We don’t have to control vendors since they have absolutely no impact on the economy.

Every jurisdiction has its own definition. The AABE is currently developing its own definition for PIE and other business entities but we have to align with international standards.

Currently, a similar international definition for PIE is being debated and we have been participating in such debates virtually, due to the COVID-19. Probably by next year, we will have a new definition for PIEs. But there will not be much deviation from what we are using now.

The AABE’s task also relates to domestic resource mobilization. Big companies have to generate big taxes and the AABE controls big business entities strictly, than small businesses.

Ethiopia’s private sector is very new. It has only been 30 years since the communist regime changed and the only big players are financial institutions, followed by other share companies.

Generational companies, that have passed from generation to generation, have also a big role to play and we must be able to maintain family owned enterprises. They usually lie in the middle, between small and big companies.

Family owned enterprises, if well nurtured, can contribute up to 50 percent of the tax revenue. So they should be considered as PIE. But in Ethiopia, family owned enterprises are dying out currently, due to various reasons.

Scholars argue that the tax base should be diversified in Ethiopia. Is it big companies or small businesses that pay more taxes currently?

It is a matter of context. Large taxpayers have to get incentives in different mechanisms, so they can grow more robustly. A country cannot grow without diversifying its tax base at a small business level.

The number of taxpayers in Ethiopia must grow. Many small companies, pooled together, bring huge sums of tax revenues. But the tax authorities must be careful not to squeeze small businesses through stringent taxes. Small businesses must be relieved from stringent of taxes, so they can grow.

What is the AABE’s capacity in controlling and regulating Foreign Direct Investments since Ethiopia’s economy is integrating into the global economy?

The Prime Minister recently stated that the financial sector will open up. And the ongoing liberalization and privatization, as well as the World Trade Organization accession, need ultimate caution. It is good that big foreign players are coming to Ethiopia. But all regulatory institutions in Ethiopia, including the AABE, must sit down, and discuss whether we can handle it or not.

Ethiopia’s economy and regulatory institutions have been closed for a long time. Even neighboring countries have more capacity when it comes to regulatory capacity. There are also differences but we cannot remain closed. We must look for methods to bridge the regulatory limitations.

The east African block including Rwanda, Uganda, Kenya, have a system in which accounting and auditing professionals can move freely from one country to the other.

When Ethiopia opens up, they will bring their own systems and professionals. Ethiopia must produce its own professionals to control foreign firms. Currently, Ethiopia has no sufficient accounting and auditing professionals to support the economy.

We are currently preparing to establish the Ethiopian Institute of Certified Public Accountancy (EICPA). Hopefully, it will be operational this year and start to produce professionals. If you go to Kenya, there are close to 40,000 professional accountants but Ethiopia has around 250 professionals. We cannot support or handle the opening-up of the economy with such meager figures.

The Capital Market is nearing realization in Ethiopia, which requires precise and highly trained professionals. PIE will be affected if we launch a stock market without skilled professionals. In some countries, only firms listed on stock markets are considered PIE.

As soon as the stock market is opened, banks will be the first to be listed. These institutions must be valuated every three months, instead of annually as before.

Unless we have professionals to value the Initial Public Offerings, public interest will always be affected. Even statements made by politicians can affect the value of an IPO; so the listed firm must be valuated frequently. This is impossible without qualified accounting and auditing professionals.

Officials at the National Bank of Ethiopia are saying it will take three years to create a fully-fledged stock market ecosystem. Can we reach that with the absence of professionals?

Big things can be done in three years. With the EICPA established now, and is backed with a sufficient budget, we can generate 5,000 professionals annually.

There are already many graduates but there is much to be done to create the right stock market ecosystem. Public interest must not be affected, until we try to fill the gap in lack of professionals.

There are many distortions in the commodity value chain and malpractices in the corporate world in Ethiopia. Even recently, importers and wholesalers have been blamed for hoarding edible oil, which has caused a crisis. Do you think the AABE has created a good corporate culture in Ethiopia?

We did not achieve much progress. There is no responsibility. Do you think money laundering is done without the knowledge of accountants? Is the accountant responsible to the public, government, or the company owner?

Ethics is the biggest problem. Accountants can build or destroy a country. The demand for accountants is always up, even at war times. Accountants can change small money into big, or vice versa.

Currently, Ethiopia is negotiating to start the Africa Continental Free Trade Area (AfCFTA) and also the WTO. It should be accountants that represent Ethiopia on the negotiation table. Accountants know what the agreement articles mean. They can tell you what it means ten years from now.

Does the AABE work with the auditor general? Do you have the capacity to take action on accounting misbehaviors?

The Auditor General audits institutions and we produce the professionals. We do not audit public institutions. We do SOEs, private companies and NGOs and the Ministry of Finance reviews the financial statements. Currently, we are reviewing SOEs parastatal financial statements. We will discuss with the PEHA, the MoF and the AG next week.

Ethiopia embarked on the road to privatization and liberalization three years ago to shift the economy from state-led to the private sector. But currently, regional states are building their own conglomerates, while the federal government also establishes the Ethiopian Investment Holding. Do you think this can create productive and efficient firms in the economy?

That is a difficult question. What is for sure is less is done concerning financial statements. Many SOEs, endowments and other firms vanished, or merged, without any consultations with the AABE.

There is a huge problem on this issue. There is no procedure at all in cases of shutting down SOEs, mergers or creating a holding company. Assets, liabilities and other complexities go without proper accounting, especially in mergers. Firms usually close or merge in the middle of the year, before the fiscal year ends and a financial statement is compiled. This is a big problem.

Usually, the Cabinet of Ministers decides on the formation, closure or merger of SOEs.

I have no knowledge on why the government is making changes when it comes to its role in the economy. But strengthening parastatals is common in many countries. We are also seeing progress to accede to the WTO.

Is there capacity to regulate foreign firms like MPESA and are foreign banks allowed? Do you think banks can survive foreign competition?

Ethiopia’s financial institutions are better than where they were ten years ago. If a single foreign bank had come ten years ago, local banks would have never survived, even if they merged into one.

But now, local banks are stronger. The problem is, local banks cannot grow more than they have now. They cannot diversify their products anymore and are very similar. If foreign banks or MPESA come, more products can come with them and support the economy.

But the banking sector will not be opened at once and will be gradual and managed. Unless the regulatory capacity grows parallel and equally, Ethiopia will be in danger.

What do you think is the competitive edge of local banks?

There is not much but their organic growth is very appealing. But the quest for access to finance in Ethiopia is beyond the capacity of existing banks. The economy grew very fast but the access to finance did not.

Even now, we are facing a liquidity problem, which has affected the construction industry due to the lack of credit. The construction industry massively contributes to the economy. But it depends on finances.

The return on shares also remains very positive. But some banks are reaching their ceilings. Many people bought shares because there were no other alternative investment areas at the time. And once the stock market is opened, there will be more opportunities, even for the layman.

Did the new Commercial Code, which was amended after 62 years, bring changes to company structures and accounting systems?

Allowing the creation of a holding company, one person PLC and other minor changes have occurred. The code also allowed foreign accounting firms to come to Ethiopia. The big four, which include KPMG and PWDC, are allowed to operate in Ethiopia.

But these international financial institutions can only partner with local companies. They are allowed to have a 49 percent stake. They are currently requesting us for a license. This is one of the signs that the economy is opening.

The big four will have a big role in capacity building but are very unhappy with the 49/51 proportion. But for me, it is perfect.

So auditing is allowed for foreigners now?

Yes, but this was only made possible after the commercial code was amended.

Recently Ethio telecom’s CEO, Frehiwot Tamiru rejected the 80 billion birr asset valuation of the company. Some say the low valuation is intentional, and conspiracy concerning the valuator has been raised.

I am very concerned of the valuation issue in Ethiopia. Valuation is one input for accounting. In the old days, the value of vehicles dropped every year and on the tenth year, the value gets to zero. The Tax Law also states it must depreciate by ten percent annually. The IFRS states an assets value must be stated in its current market value, which shows the true value of a company.

In Ethiopia, the value of vehicles keeps appreciating. A Toyota bought with 200,000 birr ten years ago is now 2,000,000 million birr. So according to IFRS, the vehicle is worth 2,000,000 birr. But the tax system does not demand depreciation.

Who is the right valuator in Ethiopia? There are only three certified valuators in Ethiopia.

The conspiracy issue when it comes to foreign valuators is not a new issue. That is why I say the opening up of the country must be cautious. Ethiopia has been closed for so long that the process must be done step by step. The reasons why the big four hate the 49/51 ratio is because they want to come at once and manipulate the weak regulatory system.

Whatever your background, you care about your country. But foreign firms care only about their profit. The loyalty of their accountants and auditors is not to the Ethiopian public or the government. It is for their parent company abroad. This is why we must produce our own professionals, to maintain the balance.

Which institutions have shown progress in implementing IFRS?

That would be financial institutions. They have the money and IFRS is expensive. If a company can afford the expensive professionals, it is simple to implement IFRS. There is a huge demand for the professionals, but there are very few. The demand shot-up since the AABE came.

Financial institutions are implementing IFRS because they have the money and managed to engage international financial consultants, but SOEs are the first to bring an IFRS report four years ago.

Banks are blamed for engaging in informal financing including the black market, and informal Hawala services. Do you think IFRS brought transparency to the banking system?

Every time an economic system is closed, informal doors are opened, including corruption. Many problems will be solved, if the economy is opened but as long as it remains closed, it creates many loopholes.

New banks have come into the picture in the past three years. But lately, the PM has said the sector will open up soon. When should it be opened?

When foreign competition comes, it will be all about survival of the fittest. How long will it take for our banks to be fit? If they have to merge to be competitive, let it be. Mergers should be encouraged. It is better to have a few strong, internationally competitive banks than many banks.

So far, Ethiopian banks are not even going into regional states, because they did not even satisfy the urban clients while Kenyan and Nigerian banks are working at continental levels. That should be our direction.

What would be your expectations of the upcoming stock market?

It will engage the ordinary people. Only few have been able to buy bank shares. But in a capital market, people can have a stake in the stock market. Anybody can invest in profitable businesses, in a stock market.

Will the EICPA produce professionals for the stock market?

Yes. The institute will generate mainly certified public accountants, to address the diversified demand of professionals from different institutions.

Various institutions want to install their own institute to produce such professionals. But that would be unaffordable. So it should be the EICPA that branches-out and addresses these diversified interests.

Who will be listed on the IPO first?

Financial institutions, then SOEs, share companies, and family owned enterprises. The last one may need discussions on whether they want to go public.

Cross listing is also possible. For instance, companies like Coca Cola, which are listed in other countries and also operating in Ethiopia, can be listed in Ethiopia.

Why is it still difficult to solve under-invoicing and over-invoicing challenges in Ethiopia’s import-export business?

Our concern is how to address it through a transparent accounting system. But there are varying scholarly debates on this issue.

Lately, the Ethiopian Investment Holding company has been formed to be an umbrella company for SOEs. Do you think such a mammoth holding company, run by a government, can be efficient given that SOEs are known for wasting resource?

I believe such trend of creating holding companies is a good start. If there is a strong accounting and valuations system, SOEs and holding companies can be efficient.

Liability and asset management company (LAMC) was also recently formed to soak up SOEs’ debts. Credit default swaps, or trading credit derivatives, is common in other countries. In Ethiopia too, some banks are buying defaulted debts from prospective enterprises. Do you think the trend is recognized by the AABE in Ethiopia?

This area should be researched. Many new trends are emerging in Ethiopia’s economy and its contribution must be analyzed.

Before the Ukraine war and COVID-19, scholars were saying globalization is invincible. Now, self-sufficiency is becoming irreplaceable. We have been dependent on FDIs, but they abandon industrial parks when they want. Yet, Ethiopia is pushing for privatization and more integration in the international economic system.

Don’t you think it is time to focus on economic sovereignty, including import substitution? I am not talking about closing the economy, but where should be the boundary?

No country is economically self-sufficient, including the US. Their economy was stuck when Chinese supply declined during COVID-19. Many companies closed in the US, because the supply chain was disrupted. Ethiopia cannot think of self-sufficiency with a nascent manufacturing industry.

But I believe it is time to re-prioritize our policies. Especially, our negotiation skills on international economic activities must grow. The level of our negotiation skill determines the level of external debt stress on our economy.

Many countries have long term plans, up to a century. We must be clear and have a realistic plan on where we want to go in the long term, regarding self-sufficiency, import substitution, even on Chinese imports. For instance, we export oilseed and import edible oil at expensive prices. This can be replaced locally.

Many investments were damaged due to the conflict in northern Ethiopia and COVID-19 pandemic before that. Can they be compensated rightly?

Knowing their accurate accounting is critical, to determine their losses and compensations. We also need to produce professionals on investment insurance policies.

How man licensed auditing firms are there?

Basically, the AABE gives two kinds of licenses. Authorized accountants prepare financial statements. There are around 2,000 authorized accountants, at federal and regional levels and there are 162 independent auditors.

What are its challenges?

There are many challenges. The AABE is a regulatory body. We are expected to have much more capacity than those we control. One of the challenges relates to professionals earning more money if they operate privately, than work for the AABE.

Professionals in regulatory institutions, have less incentive. If the professionals have more power than the regulator, it is difficult to regulate. For the time being, the board is using consultants who are paid by the World Bank, with approval from the Ministry of Finance.

ACCA supported us too. Currently, the AABE is in good position. We know how to review audit reports, and control licensed professionals. Some companies take up to four years to finalize financial statements, but we always begin to review from the first year.

The world is celebrating March 8th. Do you think the affirmative actions provided in Ethiopia have really empowered women?

I do not know what incentives are provided. March 8th is good to highlight the challenges women face. But nobody cares about the details on normal days. Those women like us, who have succeeded, should share our experiences and become role models to young people. We have much homework ahead.

The statistics of women in higher corporate and leadership positions, is alarming. I think there is only one bank president currently and this is not because women lack capacity. If you look at the boards of banks, women constitute less than 10 percent. It is the same in SOEs.

Our definition of democracy is distorted. Ethiopians think ideological semblance comes from similar people. That is wrong. Successful women must nurture the young.

Some European banks which survived the 2008 financial crisis, were banks led by women. Do you think making women CEOs is a guaranteed success?

Women have different management philosophy than men. Women lead with humility. It is not because we have more capacity but because we have intense concern for humanity.

Usually women empowerment issues are used or raised during March 8th or elections. When will equal opportunity become embedded in the publics thought?

We live in a man’s world. The existing trend must change completely, to accommodate women. A new world and country that equally accommodates women and men must be created.

Radical feminists argue a new social order should be created from scratch.

That would be good, if it is possible.

But other groups argue the existing world can accommodate women, with some adjustments.

I agree with this one. But I do not think we should try everything foreigners tell us, especially on feminism. Context and culture are very important. Ethiopia has a different context from the west. We can create an indigenous system for Ethiopia.

First, we have to reconfigure what the education system, society and the media tells about equality. The narrations and practice must be seamless, while extremist views on gender issues only harms the efforts.

If completely erasing the existing system and creating a new order is possible, it should have been simple to reshape the country.

For instance, there are some jobs where women earn less for the same position. Can it be solved by policy actions?

There are various challenges posed on women, some to be solved by the government, some by the private sector, or the society. For instance, board compositions can be solved only by policy. Chambers can also do more work to bridge the inequality gap. And some challenges are inherently solved through time.

There is this discussion over equal opportunity versus equal outcome. There is opportunity for all. Both boys and girls go to school. But that equal opportunity does not continue. Women give birth and then must take care of children.

The inequality will change as more women come into leadership roles. No challenge can be solved overnight, through policies or campaigns. For instance, the AABE can play a role in board compositions because corporate governance is one of its tasks.

Sewagegn Chane is director of the Public Financial Institutions supervisory department at the Public Enterprise Holding and Administration (PEHA), which regulates state-owned enterprises. Sewagegn is currently responsible for directly supervising the Development Bank of Ethiopia (DBE) and the Liability and Asset Management Corporation (LAMC). The Commercial Bank of Ethiopia (CBE), Ethiopian Insurance Corporation (EIC), and the National Lottery were also under his supervision, until they are transferred to Ethiopian Investment Holding (EIH) past May.

Working in public financial institutions for 30 years, Sewagegn initiated the establishment of the stock market in Ethiopia, which is bearing fruit eleven years after the first feasibility study. He was also vocal and key in rescuing the DBE, initiating Ethiopia’s first reinsurance company, Takaful (Islamic insurance), among others.

Sewagegn is also researcher at i-Capital Institute and organizer of the East African Finance Summit. Currently, he is leading two teams formed at the institute, studying the establishment of an investment and agricultural development banks in Ethiopia. Although he has been advocating ending state protection over the financial sector for years, he has currently changed his mind, just as Prime Minister Abiy Ahmed (PhD) authorized a policy that envisages opening up Ethiopia’s financial sector to foreign competition. Sewagegn believes the banking sector should remain closed at least for the next few years. The Reporter’s Ashenafi Endale sat down with the public finance guru. The excerpts, does not necessarily reflect PEHA’s position.

The Reporter: What is the progress in reforming public financial institutions, which commenced after Abiy came to power?

Sewagegn Chane: The biggest reform we undertook is in the DBE. In 2018/19, the House of Peoples’ Representatives (HPR) decided DBE cannot continue as a financial institution and debated on how to dismantle it. That year, the bank reported 765 million birr loss so the HPR decided that the bank is not supporting itself, let alone the economy.

Myself, Haileyesus Bekele, the president at the time, and Yohannes Ayalew (PhD) DBE board president at the time, were called by the HPR to explain the issue. At that time, Public Finance Institutions Agency was a separate entity outside PEHA. The agency was led by Sintayehu Hailemichael (PhD) and I was the deputy director for operations. When some 36 SOEs were put under PEHA in 2018/19, the agency was included under PEHA, as a directorate.

The Budget and Finance Standing Committee at the Parliament insisted the DBE must be dismantled, because it was reporting a loss consecutively. The three of us were called to give our final comments on the committee’s decision. The committee was told that the fundamental problem of the bank was the lack of institutional independence.

Everybody was intervening in the bank, and it was unable to operate as a bank. The PM, other ministers, sectorial institutions, and even individuals have been meddling in DBE’s operation. Secondly, the bank gives loans but does not collect. Those who took DBE loans view it as the government’s budget, not as a client. Most of them had the “developmental investors” plate.

They take a loan and divert it to other businesses. Commercial farming in Gambella and Benishangul are good examples. I was in Gambllea for a year and half, to study why DBE’s loans failed there. There are so many rain-fed projects there. Particularly, six of those that took loans completely diverted the money to other businesses, instead of the commercial farming.

I stood before the standing committee, and pledged to give the DBE additional time. I told them if institutional freedom is restored, relationships with clients will be straightforward, and the bank’s loan collection capacity rebuilt, bringing DBE on track. So I asked the standing committee to give us just one year, and if we fail to rescue the bank in that year, then the committee can dismantle it.

Yohannes on his behalf explained how the IMF and the World Bank are happy to see the DBE dismantled because they do not want development banks in developing economies. He also elaborated how important a development bank is for Ethiopia. After a brief tea brake discussions, the standing committee announced it granted the one year time.

Immediately, we embarked on the reform agenda, introducing seven reform pillars. One of the biggest reform pillars was reducing DBE’s Non Performing Loans, which was over 40 percent at the time. If the bank cannot collect the loans, it cannot disburse loans the next time.

DBE’s NPL at the time was weighed in rain-fed agriculture and textile. So, we stopped any further loans for rain-fed agriculture. In textile, many foreign investors took loans in billions but did not pay, so we decided to take over all the projects that are not paying back their loans, and transferred them to other investors.

We also took the contract management of non-performing projects. For instance, the DBE took over the management of Elsi Addis, Etur and other textile factories, for the time being. Except Etur, most of these projects have been transferred to new investors, without reaching the foreclosure stage.

The major project left on our hands to date is Ayka Addis.

The other serious measurements we took were barring any officials from intervening in any loan appraisals and disbursement processes. Before the reform, orders for some loan approvals were given from the Office of the PM. Officials from the Industry, trade, agriculture, and many other ministries used to give such informal orders to the bank. Now, even the DBE board cannot involve in loan disbursement cases, except on strategic issues.

We managed to reduce DBE’s NPL to 30 percent this year, including Tigray loans. It is actually 17 percent, if loans in Tigray are excluded, which are affected by the war in northern Ethiopia. Profit comes from loan interest. If the loan is not collected, there can be no profit.

We managed to generate 1.2 million in 2019/20; just a year after the reform was launched. This year, the bank generated 3.9 billion birr in profit. If we did not put aside 4.1 billion birr provision for the Tigray loans, DBE’s profit this year could have been 7.8 billion birr. The DBE is rescued now and everybody is acting as a client now.

DBE’s source of finance is the guarantees from the Ministry of Finance and the National Bank of Ethiopia (NBE). The capital has increased from five million to one billion. The macroeconomic committee approved a study to allow new DBE bond, effective since January. This is apart from the GERD bond, which is the DBEs source of finance.

Before the reform, all the financial indicators of the bank were negative, and unhealthy. We completely reversed all of that, except for the NPL. Before the reform, there were only expenses and disbursement, but now there is income.

Out of the 31 strategic measurements we stipulated under the seven reform pillars, 21 are aggressively implemented and ten are in the process. Only one measurement has not started, which is the digital technology and modernization initiative.

The PEHA and DBE’s board has contributed for the success of DBEs management. One of the positive factors is the steel-serious discipline of Tegegnework Getu (PhD), the board chair of DBE. As a board chair, he is opaque to any external influence or favor. He never took stipends and incentives allocated for board chairs annually. Even he uses his own car for DBE activities.

Yohannes was the chief economist at the NBE for a long time. How did you believe in him, that he could rescue the bank?

Under past presidents, the bank had many deviations and exceptions. Instead of going through loan approval and disbursement procedures, loan seekers directly contact the president and get the loans, informally.

For instance, after we banned DBE loans for rain-fed agriculture in 2018/19, the bank gave 120 million for rain-fed agriculture project. The president at the time said he was forced because certain officials at the Ministry of Agriculture managed to give the order via the Office of the PM.

Surprisingly, the board chair does not know about the loan. The bank was bleeding. We had to be brutal to stop the bleeding. Most of the bad loans were given during Isayas Bahre’s time. Both Haileyesus and Getahun Nana were unable to save the bank. Our biggest worry was that Yohannes might decline the role to lead the DBE.

Over 200 large scale agricultural projects, and a number of foreign textile investors took loans from the bank and failed to pay. Are you pursuing them legally?

We are trying to acquire the lands currently. Our biggest problem now is with the regional governments of Benishangul and Gambella. The land is the key asset the investors provide as collateral to take the loan from the bank.

After the investors fled without paying the loans they took, the DBE has to acquire the lands, since it is the collateral. Once we finalize acquiring the lands, we will transfer it to other investors. Then we will recover the previous loans.

I heard the Benishangul and Gambella regional governments are demanding it pays taxes on the lands?

We reached agreements on some of the lands in Benishangul. There are ongoing debates on the amount. The bank agreed to pay the tax, if it agreed on the amount. The regional governments usually give one plot for multiple investors, so one certificate is given to multiple investors. The regional agriculture bureau has been reporting to us that the lands were being cultivated by the investors, which was false.

In general, rain-fed agriculture and textile investments have bled DBE.

For instance, Ayka Addis’s investor used informal channels to get the loans, instead of going directly through the bank. It either goes through the PMO or other officials. Solving all this was not simple.

Most of DBE’s clients were unruly. They had the right to take the loan, and the right not to pay. So we disciplined the clients first, and reversed the bank’s practice of negligence. All this was done in three years.

How much is the land leased for the rain-fed projects?

The rate depends on the regions. Basically, tax, lease and anything related to the land is handled by the investors. But since the investors went bankrupt, and the DBE took the lands, now the bank has to pay them. This is the reason why the regional states are asking DBE for the taxes, because it is under the bank now.

The investors who took the land in regional states for commercial farming, left, and the tax holiday period is over. So regional states are now claiming the taxes and the DBE agreed to pay. This is the game.

Did the Gambella commercial farms failed by design?

The loan was supported by policy. The policy of initiating commercial farming and modernizing the agriculture was not wrong. So the DBE prepared policy and procedures.

The major factor for the failure at that point, was the decision to give loans for rain-fed agriculture. This was a mistake because the investors knew the loopholes and abused the loans and failed to return it.

The DBE is on the right track now but business continuity is more critical.

What are DBE’s sources of funds, after the NBE’s 27 percent T-bill is replenished?

The NBE introduced another bond this year, in which banks channel one percent of their loan portfolio to the DBE. In the past six months, a bit more than 10 billion birr has been channeled to the bank from this new scheme. Once we start from insurances, these two schemes will become our biggest source of funds.

The GERD bond and loans from international banks also generate finance. It also accesses external funds like SME loans, through the MoF. DBE’s T-bill is almost zero currently.

How much is the loan interest the DBE is paying currently, when will the rest mature?

The DBE pays interests by adding two percent on the saving interest, which means nine percent. On the other hand, DBE’s interest rate is between 11 percent and 12 percent, the least being for import substituting projects. The margin covers its administrative cost. So the bank is able to pay all its interests duly.

DBE requested to put Tigray NPL’s off its balance sheet. But NBE officials told The Reporter that it is not going to take it off its balance sheet.

If Tigray’s NPL is put-off DBE’s balance sheet, DBE’s NPL could be 12.5 percent. But including the Tigray NPL, which is 10 billion birr, the NPL stands at 30.4 percent. What we are saying is this 10 billion birr in NPL happened by factors out of DBE’s control. We are not asking the NBE to cancel the Tigray loan.

We undertook a detailed study on how the NPLs could be taken off the balance sheet, and presented to the NBE. We do not know why NBE is silent on the issue. The CBE also requested the NBE to take off two billion birr off CBE’s balance sheet. This was also studied and presented to the NBE.

The NBE first said the request should be processed by the Bankers Association but the issue is still in the process. It is illogical to keep inactive numbers on banks’ balance sheet. When unrest occurred in Oromia over the past few years, the NBE allowed loans of affected investors in the region to stay off banks’ balance sheet. The same can be done for Tigray. It is not a big deal. It is NBE’s decision but I do not know why it is reluctant when it comes to Tigray NPLs. Tigray NPL does not represent DBE’s actual performance, which is outstanding.

DBE’s outstanding loan is 63.4 billion birr. Total NPLs stood at 19 billion, of which 10.1 billion birr is created in Tigray since the war. The president of DBE requested to exclude the Tigray NPL but PEHA does not agree, unless the NBE approves it.

Another investor is negotiating to buy Ayka Addis. Will this be the last negotiation?

A number of potential buyers have been trying to buy Ayka Addis in the past but failed. Especially a Chinese investor was very eager to acquire Ayka Addis. Any potential buyer is expected to contribute 50 percent of Ayka Addis’s portfolio. For instance, the initial investment loan was USD 1.7 billion so the buyer is expected to contribute half of it. But the Chinese lacked capital so it requested to contribute only 10 percent of it, which means around USD 200 million, so we refused because we cannot breach the 50 percent law.

If Ayka Addis is sold, DBE’s NPL will drop to around 15 percent, from the current 30.4 percent. Ayka Addis is holding a huge loan. The principal loan is 1.7 billion, a decade ago. Including the interest, probably it is around USD three billion by now. The value of the machines, factory building, raw materials when the DBE received Ayka Addis, is valued at USD 1.79 billion.

By the way, we are still paying the salary of 4,500 employees of Ayka Addis, though it has not operated for years now. It is between 13 million birr and 14 million birr every month. We cannot abandon the employees, after the Turkish investor left. We are carrying all this cost.

There were also other alternatives for Ayka Addis, other than selling it.

There were three major options tabled. The first is selling to a capable investor or buyer. The second is operating Ayka Addis under a management contract, just like Elsi Addis and the third was repurposing Ayka Addis into an Industrial Park. Some three potential investors have been negotiating. The Chinese came last.

Currently, another negotiation is underway. We hope this will be the last one. It is a consortium of local and foreign investors. We will disclose it when it materializes. Ayka Addis’s operation ranges from cultivating cotton to sewing the clothes. It pins the cotton, dyes it, and makes the clothes. It is an end-to-end project. So the potential buyer is expected to specialize in all these value chains.

Will the new buyer pay Ayka Addis’s accumulated tax?

Under Ethiopia’s law, a company does not pay taxes if it declares bankruptcy. After the DBE took over Ayka Addis, the tax authorities are saying Ayka Addis must pay tax, since it did not undergo liquidation. Ayka Addis was not operating for the past eleven years. So, the tax authority is asking for back-taxes for all these years, stating the project did not declare liquidation. So we are arguing with the tax authority.

But the DBE declared foreclosure?

When the Turkish investors left and the DBE started managing Ayka Addis, the tax authority started asking for tax.

Amazingly, Bmet cables, one of the Turkish investments abandoned after taking huge loan from the bank is a good example of how much Turkish investor’s exploited us. Under the Turkish investor, Bmet cables utilized 40 percent of operational capacity but they were not paying their loan.

Now, the local buyer, Tadesse Admasu of Red Star Trading, is operating at 12 percent of its capacity due to different reasons. The buyer acquired Bmet paying 890 million birr. Now, it has paid all the loans owed to Bmet.

How much has Ethiopia lost because Turkish investors left the country without paying DBE loans?

Before, their equity contribution was 30 percent. This means the DBE contributes 70 percent of the investment. Under the previous ratio, a Foreign Direct Investment comes with USD 30 million, and takes 70 million. The foreign investors left without paying the 70 percent loan they took from the DBE. But now, we adjusted the equity contribution to fifty percent, for foreign investors. Local investors pay 20 percent.

FDI is needed to bring technology, capital, forex, and create jobs. It did not meet any of these targets.

One of the other loopholes FDIs has been exploiting is that they highly under invoice export price. They usually have subsidiaries or a mother company operating abroad. So they export the clothes to them, with fake price documents. These investors also import raw materials only from those mother companies or subsidiaries abroad. The FDIs operating in Ethiopia do not want to use local inputs. They export t-shirts with USD 60 cents from Ethiopia. But the buyer abroad, which is affiliated to the FDI, resells it at a much higher price. So the FDIs generate meager forex for Ethiopia. Their bank statements also indicate loss, always. Especially the expats brought by FDI are highly abusive. Bmet’s former CEO has been paid 500,000 birr in salary monthly. This is excluding housing, vehicle and other accommodations. Now we decided to reduce expats inflow.

That is why, just when we started being strict on Ayka Addis that the Turkish investor’s fled Ethiopia immediately, without handing over the project’s properly. I think they left for Burkina Faso.

Are there new public financial institutions planned to be established, particularly to finance long term development projects?

Four years ago when the bank was in deep trouble, we conducted a study to determine its fate. One of our alternative recommendations in the study was to breakdown DBE into three different policy banks; into an industry bank, agricultural bank and an SME bank. Finally, a decision to reorganize and reform DBE as it is was made. In the meantime, we conducted a study to renovate the bank; the ATA was also making moves to initiate the establishment of an agricultural bank.

The initiative to establish a stock market was also conducted by us. We have been trying to convince the government to establish a stock market for the past eight years. It is only realized under Abiy.

Now, the importance of an independent agricultural bank and investment banks is imperative for Ethiopia. In line with the agricultural bank, agricultural insurance and micro-insurance firms are necessitated equally. These firms protect the loans provided by the agricultural bank to farmers.

We conducted the “Proposal of restructuring public banks” in 2014. The proposal included the recommendation to determine the fate of the former Construction and Business bank (CBB). We did not just demolish CBB without a proper study.

The same studies have later been modified for the DBE. The modified study also recommended the vitality of Agricultural Development Bank, and mortgage bank (construction bank). The plan is for the CBE to stop mortgage financing, and transfer the role to the new Construction Bank (CB). In fact, the proposed CB partly takes on the role of the now defunct CBB.

Currently, we have established two working groups at i-Capital Institute, studying on investment bank and the agricultural development bank each. PEHA has the mandate to give birth to new public enterprises, apart from managing the existing ones. It can also decide on mergers, and dismantling of SOEs.

As long as Ethiopia is progressing from an agrarian economy to manufacturing, a stock market is very essential. If we need more robust manufacturing companies, we must build a robust stock market, where the companies are listed, float shares, and mobilize capital. A manufacturing industry cannot grow without a stock market.

The banking sector fears to give loans to manufacturing industries because the banks fear losing their saving capital. Once the stock market is active, the interest in banks will drop. But the stock market will grow faster, hand in hand with manufacturing.

I hope the establishment of an agricultural bank is realized soon. Ethiopia has an agrarian economy. But the economy is currently distorted, as the service sector constitutes the largest portion of the GDP. In a bid to transform Ethiopia’s economy from an agricultural to a manufacturing industry, agricultural development bank cannot be an alternative. Agriculture is not developing due to lack of finance, fundamentally.

The agricultural bank also needs an insurance firm, to cover the risks of the loans. The bank finances tractors for the farmer, and then the insurance firm insures the machines as well as the harvest. It is highly imperative that agricultural development bank and investment banks are essential for this country.

A secondary market cannot operate without an investment bank. Since we are nearing the establishment of a stock market, we also need to establish an investment bank.

For instance, banks are planned to be listed on the stock market. The investment banks will study the banks, as well as other IPOs, inside out. So, the investment banks determine the exact value of shares, and securities. This means IPOs, including commercial banks, cannot determine the price of their shares by themselves, unlike now.

The underwriter preserves the interest of every stakeholder, investor, IPOs, and others. It sets standard but the investment bank cannot be listed on the stock market itself.

Once the two working groups wrap up their studies, the documents will be reviewed by stakeholders. Then, we will present the final documents to the government to decide on whether to drop or implement the study’s recommendations.

A few years back, we travelled to Nigeria to visit their central bank and development bank and took three months of training. I was amazed by their Islamic insurance. We extracted lessons and brought it to Ethiopia.

The government is saying the banking industry will be opened for foreign competition very soon. What is your take on this?

Before, we have been asking the government to open the banking industry. But recently, we have changed our perspective. We prefer the government to delay the opening up for now. I precisely know the exact capacity of each local banking institution.

Before, our assumption was that local banks will merge, at the face of an open up. So we have been advocating for it to open, at each meeting and financial summits.

Basically, banking and insurance businesses in Ethiopia is a captive business. The banks are formed either under religious, ethnic, political sentiments or other bands. So, Ethiopian banks and insurance companies lack the business mentality. If they had a business mentality, they will work with anyone who has a viable business idea. So I believe the government must delay the sectors opening up.

The NBE recently said mandatory merger and acquisitions will be forced on local banks, when the sector is opened up.

That is inevitable once the industry is opened up. Of course mergers can happen even before the opening up. For instance, the NBE raised the paid up capital to five billion. Those who failed to meet will have no option but merge. The NBE can also raise the reserve let’s say to 25 percent, from the 10 percent currently. Many banks could have merged. This way, competitive banks could be created.

Western banks, especially Europeans, strongly pushed Malaysia, Korea, South Korea, and Thailand to open up their financial sector. Once these Asian countries opened their financial industries, the western banks withdrew after joining the sector. The Asian economies were hit by financial crisis as a result.

But eventually the Asian tigers avenged the western banks. The 2007 financial crisis hit western banks, because the Asian tigers suddenly raised their banking capital. They intentionally gave more loans to American banks. Then the American and European banks disbursed those loans to mortgage, and small businesses. The western banks failed to pay their loans to the Asian tigers, taking revenge twenty years after the western banks played foul.

We do not need such turf wars.

The only reason Ethiopia’s economy is doing well after the war in the past two years, is because our financial industry is closed off. Our economy survived because the banking sector is not open.

If banking was opened to foreign competition, the economy could collapse, under this war. And had it been opened before the war, the economy would have collapsed by now. Foreign banks simply close and leave, when there is a war.

Many people say the banking industry should be opened. That is wrong. They do not know the exact capacity of local banks in surviving foreign competition. I have no confidence even in the CBE.

The CBE has a huge NPL owed by the government. The government owes over half a trillion birr. Unless it is fully paid, CBE will face many challenges.

So, I insist the banking industry should not be opened at least in the next three to four years. Local banks need up to four years to prepare. Mandatory merger is simple.

When the Home Grown Economic Reform was launched in 2019, the government promised to reduce the states hand in the economy, and reduce the pressure on CBE and domestic credit. Is there any progress?

The CBE is not giving loans to the government now. State pressure is reduced. The CBE has studied new organizational structure, and is implementing new business strategies. Before, especially during the previous regime, state banks give loans as if it is a budget. They do not collect the loan.

Do you follow up on CBE’s branches abroad?

We evaluate them during reporting. The bank has branches in Juba and Djibouti. The Juba branch is performing very well but the Khartoum branch was suspended while in the pipeline.

Did the CBE move from PEHA’s supervision, after it is placed under the EIH?

Currently, the CBE is in transition process, from PEHA to the EIH.

I heard SOEs will be categorized under three supervisory institutions according to their performance. These are the EIH, PEHA, and the LAMC. Is that true?

What I know is that there are SOEs going to the EIH, and the rest will remain under PEHA. The LAMC by itself is an SOE and is under PEHA’s supervisory. LAMC is under my supervision. The CBE, DBE, EIH, LAMC and national lottery, are under my directorate.

The EIH has recently on-boarded 27 SOEs, out of the 36 SOEs under PEHA. Does that mean they are completely out of PEHA?

The investment part of SOEs goes to the EIH, while the enterprise management aspect remains under PEHA. But so far, there is no definite decision on whether the selected SOEs completely move to the EIH, or partially. This is decided by the macroeconomic team of the PM.

Will all SOEs be listed on the stock market?

The plan was for the SOEs to list a certain percent of their value on the stock market. If SOEs like ET, ethio telecom and others trade 10 percent of their portion on the stock market, it builds the public’s confidence. But SOEs must meet stringent financial reporting systems.

I also hear that five percent of ethio telecom’s share will be sold on the stock market. SOEs that meet the right financial reporting system will be able to float shares on the stock market.

People are facing difficulties acquiring houses because real estate companies collect money from house seekers and disappear. The stock market will also solve this. Everything will take shape under the secondary market.

The government is allowing the establishment of new banks in the last two years. But lately it confirmed the opening up of the banking sector for foreigners. Isn’t this sending mixed signal?

Mergers can be done at any time. Then local banks can consolidate and ready for competition. PEHA is exemplary in merging CBB with the CBE six years ago. Private Banks must follow suit.

Local banks are in a comfort zone, registering lump profit, not because they are providing a class service. They are profiting because they are protected. Under state protection, they do not have to improve service. They survive at the expense of the client. Millions are saving in bank but only a few thousand get loans. All of this will change, once foreign banks come.

Yesuf Ibrahim is a founding member of the National Movement of Amhara (NaMA). He worked as the head of the strategic sector in the earlier stages of NaMA’s establishment. After its establishment, he worked as the head of the strategic sector for two years. After serving the organization as a vice chairman, he is currently working as the head of the party’s legal and ethical regulations and as a manager of the government’s property management authority. He received his LLM degree in law from Addis Ababa University and has worked as a law lecturer at a university. The Reporter’s Selamawit Mengesha sat down with Yesuf on issues concerning the party, region and the country at large.

The Reporter: How would you describe your participation from the time you first started working with the government as an opposition party, and the process until you became the manager of the government’s property management authority?

Yusuf Ibrahim: I have been heavily involved since the establishment of NaMA until its present stage. NaMA’s ideology is not an organization that paints itself as a liberator. It is synchronized with the people and the country.

Because the Amhara people have special problems and are being attacked by the constitution and narrative, protecting the people is one of the political targets. However, we have come to the historical notion that the attack on Amhara people is not something that has a special historical origin but an effort to destroy the country by making the community a victim.

The movement is one that could be traced back to colonialism. Weakening the beliefs, values, and social status of this community can be a way to destroy the country. Its origin is a colonial idea. Because of this ideology, a number of internal anarchist institutions were created.

By establishing such organizations, a political party based on identity has been established over time to save the Amhara people, who have suffered a lot. When the government moves into the phase of “change”, it is important to try because “change” has not yet been seen. When we look at the power alignment in Ethiopia, it is not a place where NaMA makes friends easily. In the course of time, after studying the intricate web of power, we analyzed the power that could become the friend of the enemy.

Compared to that, even if we can’t get along with everyone, we can work with anyone. As for figuring out to what extent and with whom, there are those who are known for backstabbing, so that’s a start. It was a timely analysis that was not particularly favorable to the Amhara. Therefore, it was established to fight anti-Amhara organizations.

Currently, even though it is an institution with many problems, we have an organizational position supported by a strategic document that we must work on together with the government. In general, it is necessary to work together with the government. When elections were planned to be held during COVID, there was pressure from many political organizations. Working together with the government was our own initiative.

We asked ourselves how we could safeguard the long-term interests of our country and people. We are a political organization and we take a position based on who we believe will betray us. We do this within the bounds of the law. It is necessary to work together with the government. They did not try to make it as big as NaMA, but there was pressure from other parties to make NaMA a part of the government, but the government did not want that. Regarding this, we explained to them that Prosperity is a traditional government.

This showed that the government was not proactive and did not identify its partners. As a party, it contributes greatly to the work of saving the country. We believe that we have especially united the people.

During this process, there was a conflict in the nature of misunderstandings between various issues, and because the problems of the parties and the government were not resolved quickly, it started to turn into a war.

With all of that happening, it was important to work with the government during that period. But keep in mind that working together with the government does not mean that we are the government but, in some cases, groundwork needs to be done. We had the idea that politics based on cooperation, not competition, was best suited for the landscape of the country.

Since the NaMA did not have a clear idea about working with the government (that is, we joined the government while the country was at war), we discussed it twice with the government when the issue was raised.

The matter has been tabled at the executive level. But it was fundamentally ignored by NaMA.

When the authority was given, I was called on the phone. I arrived in Gondar at 5 o’clock in the morning and was told that the appointment would be at 7:30. They have their own reasons for doing so. Since the appointment process was during the war, it was completed in secret until the end so as not to overwhelm the government.

On the side of the Prosperity Party, there was a bit of a misunderstanding because I received a call from the Addis Ababa city administration and then, on the same day, I received a call saying that they were looking for you for an appointment in the Amhara region; I made my own decision and chose Addis Ababa.

There is no problem with opposition parties working with the government. In Ethiopia, the process of democracy should gradually develop over time. Democracy needs to be improved by learning to work together.

In fact, it would be great if NaMA worked with the government. It would have been helpful if the lower level of government was more involved in areas such as kebeles and districts.

I made a proposal that if the government does not give us authority on the lower structure, we should give up big authority positions. But the party was not unified and could not consider the proposal.

NaMA is a party established to represent the people of Amhara. The Amhara people want you to be the voice of your party in any way. Working with the government means leading a multi-ethnic population, and haven’t you faced challenges in the middle?

This is also an issue of the reform process that the party intends to follow. The reform will work to clarify which level and which concept we are working on. There might be some changes in concept with the change of leadership.

It is about continuing to explore our strengths and solving our problems. The government does not exist only through the executive branch. The government has three branches and includes Parliament in the constitution.

We have representatives in the federal parliament in the state. The relationship between the party and its members at the top should be defined. As a party leader, when we work with the government, it must be based on the party’s principles. If I am going to move in that way, we should either leave the party or leave the leadership of the government.

There should be a strict procedure. In the current state of affairs, the federal structure that our party and the country are led by all is based on ethnic lines.

The constitution itself rarely even uses the word “citizen.” We want this to be liberal over time. We follow the philosophy that individual citizens should be the foundation of democracy. We want our organization to be a center for correcting the many mistakes made by extremists.

It should not be restricted only to Amhara. It should also be connected with other communities. Once this is fixed, the Ethiopian status will be announced. We believe that when we work as a party and as Amhara, we are operating as Ethiopia.

The Amhara community is the Ethiopian community. It has been pushed by many things. We are not saying it should be paid by revenge. We only remember the past to be able to fix the future. We do not believe that our people would be harmed if equality and freedom prevailed in Ethiopia. This is a modern principle. I do not believe that I am an advocate for the politics of a community at any time. As a company, we believe that we work for all Ethiopians.

It is one of the pillars of our society that it should not be affected by special circumstances. We want to be seen from the Ethiopian perspective. We do not want to separate Amhara. We want it to be governed by justice along with its fellow citizens. Amhara is affected in the same way that the rest of society is, but the incorrect narrative that has developed over time must be corrected. The question of who is the representative of political philosophy is bound to arise. Since NaMA is of Amhara origin, it is organized accordingly.

It is necessary to adapt to solve this problem for the time being. I think NaMA can adapt to all the parties. While working here, I am color-blind. I have neither the capacity nor the desire to take sides by saying who belongs to which nation. I also do not share such political views. We think that the perceptions created on us by the TPLF is in conflict with the people of Tigray. This is because the TPLF has been equating itself with the people of Tigray. But we still see their segregation. We believe that the TPLF is a criminal group. During the century, narcissistic institutions were created to hold back society and live for profit.

A while ago, it was tiring to find the issues that separate the people of Tigray and the people of Amhara. It was bound by various social, geographic, religious, and economic ties. We have to solve the existing problems with different justifiable methods. As it is known in Ethiopia, we do not accept ethnic politics. Therefore, I am running the people’s question in alignment with the government’s work.

Is there a division between the leadership of the government and other members of the party? What kind of situation is NaMA in right now?

Currently, changes are made every time political dynamism changes. The struggle is that when more energy is needed, society needs change. We have gone through many problems in our struggle for organization and society.

As the country’s problems continue to expand, members of the family are always at war. Therefore, leaders and members do not meet regularly. NaMA’s children are dying on the war fronts.

Don’t ask me how a peaceful party can fight with weapons. Since the declaration of seclusion, there has been a call to participate in the war. War has been waged on the Amhara people directly.

There are NaMA members in Raya, Wolkait, and in all the districts where there were members that were killed while in command of the brigade. There are several fighters in the structure. Therefore, the central one, the one at the top of each leadership, and the one at the bottom are not formally connected; we are connected informally.

During the second round of fighting, the party did not have a central committee or executive meeting for four months. Many gaps were created during that time, and it is not possible to update regularly. Politics brings the change of opinion closer to you when you meet and update regularly.

However, the more it is separated, the more the case is defined. So far, we’ve been supporting the idea that had majority support in debates. I have never seen a decision made without the approval of NaMA members.

Because we do not meet regularly, we have lost the opportunity to make decisions through debate and consensus. There were talks of NaMA coming into government appointments without the party’s consent, but in the process, although there were violations of discipline, the matter was adopted at the central committee level and this concept of working together will hopefully continue in the future.

The forces that wanted change were created in NaMA. First, there was a question that you should not lead the party part-time while in government, as the party requires a full-time dedication.

We will restructure. The party is a movement, and a movement needs to open up. It is not just a random party in power. Until the struggle reaches a certain level, the movement will open its doors and attract new talents, and it is not feasible to say that I will remain on the throne of the establishment once it is over. It is not correct, and it is not the principle of our struggle either.

People feel worried if there is no open discussion. There will be people who want to make the party a powerhouse. But in the end, the contradictions could not be easily reconciled.

On the other hand, it has shown differences in the way we see politics. But it is only in the top management that the difference should be noted. A certain difference was created between the Central Committee and the Executive Committee with only 10 to 20 people. There is no difference in the bottom structure of the broad members.

Due to Bahir Dar’s protest, I resigned on my own accord and changed from the position of vice chairman to the law department. What the party wants is not the change of one person or two. They say the movement wants to change from top to bottom. And this is their right.

An inquiring generation should be encouraged. There were misunderstandings with the top management. It deviated from NaMA and the general concept of democracy, which did not accept the reform and were going through a process that did not encourage internal democracy.

It is not a question of whether we like or hate individuals; it is a matter of history. It is the struggle of our people. It doesn’t define division for me. It is fundamentally settled by law. The structure is not split.

The main foundation is structure. I don’t think that the creation of division in the leadership of two or three people will divide the structure. We intend to hold a general assembly by October, which will hopefully restore NaMA.

Will the party become more organized by resolving the controversy within NaMA?

NaMA will come prepared. This happens at any party because it is a massive collection. The party needs time. The fight will then go into negotiations. The negotiation will be based on the concept of transitional justice from our point of view. There are a lot of processes that go through both material and human life. All of that should be resolved.

Politically, where are we going? Where are we going as a country and what is our collective ambition? NaMA must be prepared for this soon.

There are those who have applied what we brought as an idea to Ethiopian politics, which shows NaMa’s power to exert great pressure. After many pushes, debating and explaining to the people of Ethiopia, if politics is about to bear fruit, it will not happen unless the party exists.

There may be individuals with egos within the party leaders. They should be dealt with on the inside first. We were hoping that it wouldn’t show on the outside.

Most of the leadership and central committee members have petitioned the General Assembly’s request. A petition has been filed for reform. Yet undisciplined work is being done against the will of the people and the structure of the organization. That should be corrected. They are all being looked at from every angle.

Let us come to the current national issues. We have been at war for the past two years. Various efforts have been made to resolve the war peacefully, but another war broke out. Can you explain to us the whole political process and what Ethiopia’s politics should be in the future?

NaMA wants Ethiopian politics to be based on citizenship. Ethnic politics means a gathering of extremists where everyone who is offended hides. The TPLF and ONG should be held accountable for the Ethiopian-ism they attacked. It is a country known for caring and living together. Politicians must engage in a certain strategy. The structure should not be manipulated as intended.

NaMA will always cooperate with forces that can weaken the TPLF. As the TPLF has been in politics for a long time and has led the country, it must correct the mistakes of the past by deciding which is the most viable path for the future. They could not think of a way that would benefit the people of Tigray, whom they think they represent.

I do not think that the separation of the Amhara and Tigray peoples, a society that has lived together for many centuries and is bound by religion and culture, will achieve the goal. The people of Tigray must show that they are not enemies to the Amhara community.

During the war process, NaMA has been doing many other things by standing with the defense force, delivering food and coordinating with the diaspora. When the Amhara region was in battle, it gave studies on why they should fight for a purpose. It was heavily involved throughout the war.

How and under what conditions do you think the negotiations should be conducted?

Conflict always ends in negotiation. Even if the TPLF itself thinks that we should be divided, it knows that they will lack both resources and manpower. The TPLF should not go any further on the path of brutality and revenge. Ethiopia should follow the liberal approach and solve its problems. The war against the TPLF was not for revenge but was brought on by themselves.

In my view, I want transitional justice to happen. It is not because I believe transitional justice would calm everything down, but because it is an option. Justice is being served now, not for revenge but to bring harmony and move forward.

Negotiations should be conducted for the sake of peace and justice, with the decision that it will not happen again in the future and that what happened in the past was not right.

But in Ethiopia, it is seen that negotiations are used as a plot resource. It has been observed that only if the power to be negotiated is dangerous and one party wants to survive, is the proposal submitted for negotiation.

That is why I am afraid that the proposal presented by the TPLF might be some sort of treason. The deal requires a genuine broker. Since the war will inevitably end in negotiations, it all depends on who comes up with the better negotiating package. There is a risk that the negotiator who believes in violence may resort to violence at the negotiating table.

The TPLF should not exist as a political force. It is difficult to say that the TPLF is deceiving all these people with mobilization. I think most of them believe it. While the party was scattered, the individuals in the party lined up, reorganized, and attacked the defense force.

Such regeneration should not be ignored. The security guarantees should be adjusted and then they can enter into negotiations. A ceasefire is one way it can be done. But beyond that, there must be other stakeholders. The negotiations that should have been entered into after the collapse of the Derg left us in the situation we are in now. I believe that the Amhara region should have a negotiator on their behalf.

In the end, it should be known what level our politics should be at. Any person should be able to go and live in the area they want without being displaced from place to place because of ethnicity.

The TPLF has the capacity to rebel, not organize and re-enter. War itself should not be based on ethnicity. Who will benefit from this war?

There is no need to pretend like there is a war between two different countries. Both must work together. The negotiations must be conducted in moderation. Negotiations range from a ceasefire to a new proposal.

Although the African Union has little experience, it must mediate. They should all enter into the negotiation with good intentions. The very idea of secession is unethical.

To allow foreign banks, the banking proclamation, banking service code and the investment regulations must be revised. Especially, the code must allow banking for foreigners. The existing commercial code allows banking and insurance only for Ethiopians. Non Ethiopians cannot be investors, or operators.

Do you think the financial sector will be opened before five years?

I think so but I prefer it being delayed. All banks are giving loans to the service sector. Manufacturing and agriculture cannot grow unless we have banks that can give loans for long term projects. There are no consumer loans too.

Insurance companies complained over NBE’s order to direct 15 percent of their profit to DBE bond.

The rate has been reduced lately and the insurance companies agreed.

We must draw lessons from countries that have bridged the gender gap successfully. In some institutions, they say there are no women qualified to be board members. That is wrong.

Circulation of privately-owned papers is small and usually limited to Addis Ababa. Readership numbers are low.

A number of newspapers are now available online.

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Media and Communication Center (MCC) a private limited media company established in 1995. Headquartered in Addis Ababa, Ethiopia MCC is the publisher of “Reporter” a bi-weekly Amharic, “The Reporter” a weekly English newspaper, a monthly Amharic and English magazines in both print and electronic versions.

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MCC employs 137 permanent and part-time staff and has a sister company called the Horn of Africa Press Institute, which does research on Media related issues.

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The Reporter’s motto “Free Press, Free Speech, Free Spirit” expresses the ideal of freedom that, journalists and editors, hope to enjoy and promote professional journalism.

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Each week we bring to the public critical stories without fear or favor and guarantee that our editorial choices about what to print are based on the importance and relevance of the topic to our country along with journalistic qualities. We refrain from any political, economic, or other unethical motivations.

We dedicate ourselves to help our readers in their effort to become an informed citizenry by giving as much information as possible.

We serve as a platform for the public’s thoughts, opinions and ideas by soliciting, accepting, reviewing and publishing letters and comments.

We intend to make our newspaper a model for those in our profession, a guide for novices.

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MCC distributes the newspapers and magazines to all business companies, governmental offices and non-governmental offices in Addis Ababa and all regional cities through subscription as well as street vendors.

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ሪፖርተር ዜና Media and Communication Center (MCC) a private limited media company established in 1995. Headquartered in Addis Ababa, Ethiopia MCC is the publisher of “Reporter” a bi-weekly Amharic, “The Reporter” a weekly English newspaper, a monthly Amharic and English magazines in both print and electronic versions.

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The Reporter’s motto “Free Press, Free Speech, Free Spirit” expresses the ideal of freedom that, journalists and editors, hope to enjoy and promote professional journalism.

MCC believes that it has responsibility to readers, the public, the people in and outside Ethiopia who rely on Reporter for news.

Each week we bring to the public critical stories without fear or favor and guarantee that our editorial choices about what to print are based on the importance and relevance of the topic to our country along with journalistic qualities. We refrain from any political, economic, or other unethical motivations.

We dedicate ourselves to help our readers in their effort to become an informed citizenry by giving as much information as possible.

We serve as a platform for the public’s thoughts, opinions and ideas by soliciting, accepting, reviewing and publishing letters and comments.

We intend to make our newspaper a model for those in our profession, a guide for novices.

Circulations and Reach

MCC distributes the newspapers and magazines to all business companies, governmental offices and non-governmental offices in Addis Ababa and all regional cities through subscription as well as street vendors.

Readers can access our news on our websites www.ethiopianreporter.com and www.thereporterethiopia.com

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Ethiopian Reporter Business News

Policy caps foreigners’ acquisition in local banks to 40 percent

Local banks have less than one year to prepare

With an additional five percent stake allowed each for foreign individuals and foreign non-bank investors, the maximum stake local bank can sell to foreigners is capped at 40 percent.

Nigeria has confirmed that Ethiopian Airlines has been chosen as the core investor and partner for the country’s new flag carrier. Nigeria Air has been in the works for a while now and has slowly been approaching a full launch, pending support from partners. Ethiopian is Africa’s largest carrier and has shown a willingness to invest in new startups recently.

Foreign banks are allowed to acquire up to a 30 percent stake in local banks, according to a policy document approved by the Council of Ministers last month and obtained by The Reporter.

With an additional five percent stake allowed each for foreign individuals and foreign non-bank investors, the maximum stake local bank can sell to foreigners is capped at 40 percent.

Licensing foreign banks and implementation of the policy is slated to kick off in one year’s time from the ratification of the Banking Business Proclamation, whose amendment is already underway.

The highly confidential policy document has been off limits. The policy also excludes insurance and microfinance from the open-up initiative. It allows foreign banks to open a subsidiary firm and open branches in Ethiopia, besides giving an option to buy shares in local banks.

An NBE official that spoke to The Reporter confidentially stated that the window period for local banks until the liberalization takes off might not necessarily be one year.

“The Amendment to the Banking Business Proclamation is finalized and ready to be sent to the Council of Ministers. Most certainly, the proclamation will be approved in the current 2022/23 Ethiopian fiscal year. The licensing of foreign banks will start after the amendment of the banking business proclamation is finalized,” the official said.

The official believes that once the proclamation is amended, regulations and directives will follow, which can take six months or a year.

“We cannot say definitely that a bank will be opened up one year after the proclamation is finalized. It depends on our pace of finalizing the proclamation and the regulations and directives required to implement it,” the official added.

Foreign banks are also authorized to open a commercial representative branch in Ethiopia, a permit that was already given to some multinational lenders like Standard Bank, Egypt’s Commercial International Bank (CIB) and KCB Group.

The opening-up policy document was not revised after the Council ratified it. Comments forwarded by the Council are also not included, according to The Reporter’s sources.

The NBE will decide on the majority of the details regarding the implementation of the opening-up policy with the details to be stated in the upcoming proclamation, regulations, and directives, according to the NBE official.

“The policy is more of a broad perspective. Foreign banks, individuals, and strategic investors are allowed, but the exact ratio will be determined. Changes to investment regulations are not always necessary. The banking proclamation is sufficient by itself,” added the official.

Local banks are already in hot water since the Council of Ministers disclosed the approval of the open-up policy last month. Presidents of local banks The Reporter talked to, who did not have access to the policy documents so far, argued most of the decisions stated in the policy document.

“Of the four modalities, subsidiary and branch will have no benefit for Ethiopia. They are the biggest lunacy of Ethiopian government decisions. They will neither bring foreign currency nor improve the efficiency of Ethiopia’s banking industry. The government is wrong to assume local banks lack corporate culture and skills. I am sure if academicians and banking practitioners see the policy document, they will not approve it,” said a private bank president with two decades of experience.

He says the government committed two major breaches. “First, the government did not identify what it was really seeking to do to open the banking industry. Is it foreign exchange revenue, access to finance, efficiency, technology, or others? Then the government should have done intensive studies to determine which venue is suitable for that objective,” the bank president said.

“Secondly, the government did not discuss it with local banks and other stakeholders. The NBE did not discuss anything with us. The policy document is still kept a secret even after the Council approved it. It must be posted on the council’s website as soon as possible,” the president added.

Another bank president appreciated the decision to cap foreign bankers’ acquisitions. “Capping maximum equity local banks can sell to foreigners to minority shareholding ratios is very good. It will protect local shareholders and maintain the rights of local bankers. The issue with this equity acquisition is that there is no system in place to assess the value of local bank shares.”

“Since there is no stock market in Ethiopia, valuation of local banks is done traditionally. None of the local banks are listed on any stock market. The existing share market valuation system is traditional. Currently, shares of each of the local banks do not reflect the exact values. So there must be a new valuation system,” said the bank president.

On the other hand, he contends that valuing local banks at a time of peak birr depreciation will be detrimental to Ethiopia but beneficial to foreign banks and investors.

“The valuation will be high in terms of birr attributable to the devaluation. But in terms of dollars, the value is not large. Therefore, foreign banks and investors can acquire the stakes at a cheaper price in dollars. The injection of foreign banks into local banks will escalate inflation in Ethiopia because foreign investors will buy the shares with forex. But that forex is injected into the economy in birr, which is high in number. So the immediate impact of the banking opening-up will be higher inflation. I do not understand why Ethiopia keeps devaluing Birr,” he added.

The bank president also appreciated the one-year window period for preparation but questioned why private local banks have to work with the NBE to devise their competition strategy.

However, all the bank presidents rejected the government’s decision to ratify the open-up policy document without consulting them.

“The NBE did not even discuss with us the Banking Business Proclamation amendment underway, let alone the new policy. Many laws were introduced without consultation with bankers and have proved harmful to us. I understand the political and diplomatic benefits of this policy, which is why the Council hurried to ratify it without consulting us,” added the banker with two decades of experience.

For him, the policy is made to appease western countries, which are pressuring the government.

“Banking opening up is not as simple as opening up telecom, aviation, or any other sector. Ghana and Kenya sold their banks and became poor, overtaken by India, Pakistan, the UK and other countries’ banks. Many other countries, including in Africa, opened their banks after intensively deliberating on it and preparing a detailed catalogue of the modalities,” said the banker. “Nigeria, Ghana, Kenya, South Africa, Morocco, and Egypt all opened their banking sectors after much deliberation. Not all of these countries were successful after opening their banks. Unless wisely managed, this opening up will also make Ethiopia poor,” he added.

Ethiopia has canceled its contract with a Chinese company exploring oil and gas in the country since 2013, the government announced on Wednesday.

Takele Uma, Ethiopia’s minister of mines and petroleum, said the deal with Chinese firm Poly-GCL was called off because of its “financial and organizational inability” to develop gas in the Ogaden Basin, a resource-rich area in eastern Ethiopia, according to state-affiliated news agency Walta.

The report said Poly-GCL was issued a letter of ultimatum in March that listed several conditions for the company to fulfill.

“In accordance with the successive notices the Ministry has issued in the past and in full compliance with the PPSAs and the laws of the land, the termination has now been fully effected,” Takele said on Twitter.

“As long as the financing that would enable to develop the oil and gas fields the Ministry is open for mutual and expeditious settlement,” he added.

Takele had previously hinted that Poly-CGL’s contract would be terminated, saying that Ethiopia was actively searching for international companies that could develop the Ogaden’s confirmed reserves of 7 trillion cubic feet of natural gas.

Nigeria has confirmed that Ethiopian Airlines has been chosen as the core investor and partner for the country’s new flag carrier. Nigeria Air has been in the works for a while now and has slowly been approaching a full launch, pending support from partners. Ethiopian is Africa’s largest carrier and has shown a willingness to invest in new startups recently.

Ready to take off?

According to ThisDay, Nigeria’s federal government has formally chosen Ethiopian Airlines (Ethiopian) as a partner for the long-awaited Nigeria Air. The deal includes a 49% equity share for the airline, joined by 5% from the government since the project is set to be private-public. Notably, Ethiopian is sticking to its policy of not investing cash into a new business.

Instead, the airline will leverage its technical prowess, an abundance of aircraft, and management skills to establish Nigeria’s first flag carrier in years. While yet to be formally confirmed, an initial pool of pilots is set to arrive in Addis Ababa for basic training for certification on the Boeing 737NG.

Nigeria has confirmed that Ethiopian Airlines has been chosen as the core investor and partner for the country’s new flag carrier. Nigeria Air has been in the works for a while now and has slowly been approaching a full launch, pending support from partners. Ethiopian is Africa’s largest carrier and has shown a willingness to invest in new startups recently.

Ready to take off?

According to ThisDay, Nigeria’s federal government has formally chosen Ethiopian Airlines (Ethiopian) as a partner for the long-awaited Nigeria Air. The deal includes a 49% equity share for the airline, joined by 5% from the government since the project is set to be private-public. Notably, Ethiopian is sticking to its policy of not investing cash into a new business.

Instead, the airline will leverage its technical prowess, an abundance of aircraft, and management skills to establish Nigeria’s first flag carrier in years. While yet to be formally confirmed, an initial pool of pilots is set to arrive in Addis Ababa for basic training for certification on the Boeing 737NG.

The next few months will tell us more in terms of the airline’s timeline for takeoff. With a fleet of Boeing 737s and Dash 8s, we can expect a domestic and regional focus in the initial months, a market that has no shortage of travelers in Nigeria. Keep an eye out for this up-and-coming carrier in the near future.

Mesenbet Shenkute Re-elected to Lead Addis Chamber for Second Term

The one and only mortgage bank, Goh Betoch Bank, concludes the financial year with bright books, meanwhile it in fact operated for few months.
The bank which officially opened its doors on October 25, 2021 disclosed that the financial year that ended on June 30, 2022 was primarily used to finalize the formation process and create operational capacities like recruiting personnel, providing trainings, emplace core banking and data center facilities and others.
In the first months, the mortgage bank was also fully working on a five year strategy that was conducted in collaboration with HST Consulting PLC, a prominent consultancy firm.

Mulugeta Asmare, founding President of Goh Betoch Bank, said, adding, “We have also provided services to customers and have been able to mobilize deposits, provide loans, as well as facilitating some other operations like forex.”

The bank that has four branches including the one in Dire Dawa began providing loans in the fourth quarter of the financial year and disbursed over 300 million birr in this short period, while the deposit mobilization was about 260 million birr.
62 percent of Goh’s deposit mobilization is tending to savings for mortgage, which is its specialization even though it provides other basic commercial banking services.

In the financial year under review, the bank was able to conclude under a positive balance sheet, which is not common in the sector, “Compared with the period where we commenced our real operations, such types of success is quite rare.”
“We have been working to manage our expense. Thus for the closed period, we have attained to cover our costs including organizational expenses that were incurred starting from the under-formational processes, which started in 2019,” the President said.

“Despite working for a few months under limited scale, our income has surpassed the expenses, reeling in profits of 6.3 million birr,” he explained.
As a mortgage firm, the bank may not have a priority to run extraordinary ways of opening branches and in the current financial year it has targeted to double its branch number to including major cities like Hawassa and Bahir Dar.
Currently, the bank that has 127 staffs has four branches in Addis Ababa and Dire Dawa.

The Reporter Ethiopia

Patrick Hicks is a born-and-bred Texan from Waco. Fasicka Hicks is from Addis Ababa, the capital of Ethiopia. They met in 1997 after she immigrated to Texas.

Both of them liked to cook, and Patrick’s barbecue became a favorite of Fasicka’s Ethiopian family. Seeing her family’s delight gave Fasicka an idea.

The idea soon blossomed into Smoke N Ash, but it remained traditional Texas BBQ until 2019 when Fasicka decided to add Ethiopian options to the menu — and they soon became popular items.

With customers enjoying the two tastes together, the couple decided just having the meal share the same plate wasn’t enough. They decided to combine the flavors in the same recipe.

“And I was tellin’ him, ‘Hey, you know what? We can make money sellin’ this food.’ So we bought a trailer and made some extra money on the weekends. Before we know it, we start forming lines because people look forward to our cooking every weekend,” Fasicka recalled.

To guarantee authenticity, Fasicka’s sister gathers Ethiopian spices in Addis Ababa and ships them to Texas—the result is perhaps the only Ethiopian-Texas barbecue on the planet.

The Texas-Ethiopian platter is the signature dish at Smoke N Ash. American barbecue staples like brisket to catfish to Texas toast, as well as Ethiopian dishes like chicken doro wat are on the menu.

The couple says the success behind their restaurant isn’t the food but what it means to them.

“When it comes to food for me, it’s just about togetherness. You work on it with love and care, and you make it to be the best thing on the plate, on the table,” Fasicka said.

The couple says the success behind their restaurant isn’t the food but what it means to them.

“And I was tellin’ him, ‘Hey, you know what? We can make money sellin’ this food.’ So we bought a trailer and made some extra money on the weekends. Before we know it, we start forming lines because people look forward to our cooking every weekend,” Fasicka recalled.

Safaricom prepares to switch on Addis in early October

The amended National Payment Proclamation requires foreign and local fintech operators, including mobile money service providers, to pay a license fee regularly. The proclamation, which was passed by the Council of Ministers last month, is expected to be ratified once Parliament is back from recesses.

Officials at the central bank told The Reporter that “the amount is not fixed. It will be stated in the directives of the proclamation. We are currently finalizing the directive required to put the proclamation into effect.”

The amendment of the 2011 proclamation is necessitated to open the mobile money sector to foreign operators. This came especially after Safaricom Ethiopia requested to bring onboard its mobile money arm, Mpesa.

However, Mpesa, a Kenyan mobile money service provider awaiting the amendment of the National Payment Proclamation, is unhappy with the requirement for a license fee, sources close to the matter told The Reporter.

Mpesa is already undertaking preparations to enter the Ethiopian market after government officials gave the green light last year. Managers of Safaricom Ethiopia also confirmed to The Reporter that technical work is already afoot.

“Mpesa has already started building the backdoor software developments. At the beginning, Ethiopian officials told us there would be no license fee for Mpesa. But now, they are telling us there will be a license fee,” complained an official working with the Safaricom Ethiopia, linking the inconsistency with the ebbing Ethiopia’s forex reserve.

However Tewedaj Eshetu, public relations and communication manager at Safaricom Ethiopia, said, “We are waiting for the proclaimation to be ratified.”

Managers of local mobile money companies believe the license fee is a global trend and the amount is not as large as many fear.

“The NBE consulted with owners of mobile money companies before approving the amended Payment System Proclamation. Comments and complaints were included during the stakeholders’ discussion on the draft document,” said a manager of a local mobile money company.

On the other hand, Safaricom Ethiopia is currently preparing for a wide service provision.

Safaricom will launch commercial service in Addis Ababa at a national level in October, according to Tewedaj, though she refrained from disclosing the exact date.

However, sources close to The Reporter disclosed that the launch date is slated for October 6, 2022. A grand ceremony in the presence of higher Ethiopian officials and top management of the five consortiums of Safaricom Ethiopia Plc is expected to be held on the day.

Safaricom launched its first service in Dire Dawa town last month, with a plan to reach 25 cities, including Addis Ababa, by April 2023.

Ever since the start of a brutal war between the government of Ethiopia and the forces of Tigray People’s Liberation Front (TPLF) following the latter’s unprovoked attack on the troops of the Northern Command of the Ethiopian National Defence Forces (ENDF) based in the northern region of Tigray on November 3, 2020, Ethiopia has been subjected to an unrelenting campaign of hybrid warfare waged by a set of actors with vested interests. The campaign has comprised of different actions including an informational warfare depicting Ethiopia in a negative light, a coordinated diplomatic pressure aimed at coercing Ethiopia into submitting to the demands of the TPLF as well as imposing punitive sanctions on the country and withdrawing its benefits under the United States’ tariff-free African Growth and Opportunity Act (AGOA). Western governments and such institutions as the U.N., Western mainstream media, humanitarian aid agencies, human rights “defenders” and think tanks figure prominently among the slew of actors which have been involved in the grey-zone tactics being pursued against Ethiopia.

The latest example of the diplomatic pressure being brought to bear on Ethiopia is the release this week of a politicized report by the International Commission of Human Rights Experts on Ethiopia (ICHREE). Derided by any Ethiopians as a braze attempt whose overarching goal is to demonize the Ethiopian government, the ENDF, the Amhara Militia and Fano, the report’s “findings” gloss over documented atrocities perpetrated by the TPLF. The report says the Commission has reasonable grounds to believe that the ENDF and Eritrean Defense Forces (EDF) committed a catalogue of egregious crimes ranging from widespread extrajudicial killing and injuring of civilians to rapes and other forms of sexual violence against Tigrayan women and girls, and looting and destruction of civilian infrastructure. It also indicates there were reasonable grounds to believe that the Federal Government and allied regional State governments implemented a widespread range of measures designed to systematically deprive the population of Tigray of material and services indispensable for its survival, including healthcare, shelter, water, sanitation, education and food. As for the TPLF, it says Tigrayan Forces have also committed acts of rape and sexual violence, albeit on a smaller scale, and killed civilians and persons rendered hors de combat, looted, and damaged or destroyed civilian infrastructure and property in two towns in the Amhara region.

The ICHREE report is riddled with a raft of shortcomings that rob it of credibility. As the Ethiopian government says, “… the report was written in breach of all principles of professionalism, independence, impartiality, and standards of proof entailed in any such process under international practice”. The Commission, by its own admission, carried out a remote investigation into selected incidents and themes even as it excluded from its report the serious human rights and humanitarian law violations which could amount to war crimes and crimes against humanity in the Afar region. The omission of an entire region— whether by design, negligence or lack of capacity—from the Commission’s investigative work misrepresents the true state of things in the war-affected northern region of Ethiopia. It also constitutes a clear failure to “conduct a thorough and impartial investigation into allegations of violations and abuses of [international human rights law, international humanitarian law, and international refugee law in Ethiopia committed since 3 November 2020 by all parties to the conflict…] by building upon the report of the Office of the High Commissioner and the Ethiopian Human Rights Commission.” Moreover, the Commission’s use of language implying that the Ethiopian government has engaged in acts that may amount to ethnic cleansing is entirely unbefitting a human rights body and lays bare its political bent.

The Ethiopian government had rightfully condemned the decision to establish the ICHREE from the outset, describing it as being imposed on it without its consent and an unwarranted meddling into its internal affairs under the guise of protecting human rights. The Ethiopian Human Rights Commission also reserved criticism for the decision arguing the creation of a new body was repetitive, counterproductive to the ongoing implementation processes as per the recommendations of the joint investigation it undertook with the UN rights office into the alleged violations and abuses committed prior to the unilateral cease-fire declared by the Ethiopian government in June 2021, and further delayed redress for victims and survivors. In fact following the adoption of the joint investigative report, the Ethiopian government established the Inter-Ministerial Taskforce (IMTF) to comprehensively deliver on accountability and redress measures and initiated an independent criminal investigation. These flaws thus tends to undercut a fundamental principle of international law, namely that the primary responsibility for the promotion and protection of human rights rests with states themselves.

Western governments and such international institutions they control as the U.N. have a checkered history when it comes to the protection of human rights. Although they espouse human rights values in their rhetoric and policies, their excoriation of human rights violations are by and large is dependent on the extent to which other countries (or certain groups) are willing to obey their commands. Consequently, the horrendous human rights violations states and groups, such as the TPLF, that have cultivated friendly ties with the West or dutifully carry out the West’s bidding, commit are whitewashed or completely ignored. That is why the assertion that the ICHREE magnified the alleged atrocities committed by the Ethiopian government while making a perfunctory mention of the slaughtering of innocent civilians, rape and sexual abuse, use of child soldiers, pillaging, and destruction of civilian infrastructures the terrorist-designated group is guilty of would not be far off the mark. If the U.N. or for that matter any other international body tasked with advancing the protection of all human rights for all people, empowering people to realize their rights, and assisting those responsible for upholding such rights in ensuring that they are implemented, they must never be weaponized for political ends.

Budget allocated by the Ministry of Education for public universities has been utilized for political purposes, a report published by the Ethiopian Ethics and Anti-corruption Commission reads.

The Commission’s report, which was initiated to assess corruption risks in the private and public educational sector, highlighted a plethora of issues in both public and private-owned educational institutions which severely compromise the quality of education.

The report, which The Reporter has obtained, shows that there is a corrupted and political party-affiliated organizational system in educational development programs in those institutions. Illegal and inappropriate recruitment of teachers and other staff members, employing relatives and family members and recruitment of staff with fake educational certificates are also mentioned.

Many staff members of some educational institutions have employees with fake education certificates, while private university colleges are printing and selling degrees and diplomas like a good, and registrars purposely destroy students’ certificates and request money to replace them, according to the report.

It showed that while the university structure attempts to preserve the reputation of those who are in power, private schools, on their part, seek to preserve the interests of their students as commodity customers.

The absence of teachers from their classes, fake educational certificates, leaders’ engagement in theft, illegal employee recruitment and development, inappropriate procurement, lack of clear transparency and working system, inappropriate registrars’ staff members’ engagement malpractices, and tender embezzlement pose risks to educational quality, according to the finding.

The report underlines how colleges and university administrators compromised the quality of buildings by plotting and signing with the contractor to accept buildings before their completion date.

The study, which was conducted in 61 institutions, revealed a lack of internal financial control mechanisms, purchased goods of low quality, and budget allocation for politically motivated activities outside educational institutions’ key responsibilities.

Most of those educational institutions were reluctant to provide the requested information to undertake the assessment, unable to obtain accurate information and due to the absence of leaders in their working places, according to the finding.

The Reporter’s endeavors to get comments from the Ministry of Education bore no fruit as some officials were unable to respond.

However, Ethiopia’s education and training authority communication director, Tarekegne Geresu, speaking about private colleges, said that despite there being certain issues that might be considered findings, the authority has clear criteria to uphold rules and regulations in private schools.

Tarkegne also mentioned the authority’s ongoing efforts to identify and take serious measures against over 200 institutions, reaching up to the revocation of licenses and closure of institutions.

“After graduation, we provide authentication for every single degree certificate, and unless the authority certifies this certificate, employers should not recruit those with unverified certificates from private colleges,” Tarkegne told The Reporter.

Only seven insurers meet the new threshold

The National Bank of Ethiopia (NBE) raised the minimum paid-up capital of insurance firms by six-fold. The revised ‘Minimum Paid-up Capital for Insurance Company’, which is effective as of September 15, 2022, replaced the existing threshold introduced in 2013.

The new capital requirement to obtain a general insurance license is 400 million birr, up from 60 million birr. The minimum capital for long-term insurance licenses was also raised from 15 million to 100 million birr. A company needs to deposit 500 million birr in a closed account to obtain a license for both, which was 75 million birr under the old directive.

Existing insurance companies whose paid-up capital is below the new threshold are given a five-year window period to meet the new minimum threshold by the end of June 30, 2027. However, these insurers are required to submit an action plan to the NBE by October 16, 2022.

“There is plenty of time to fulfill the requirement. The minimum requirement was very low from the outset,” said Zafu Eyessueswork, a veteran in the industry and founder of United Insurance and Hibret Bank.

Fikru Tsegaye, an insurance profession known for his commentaries in the sector, also welcomed the decision.

“The inflation has been eating the capital of insurers. If you compare capital of insurance companies against dollar, it was declining, so the amendment is a step in a right direction,” said Fikru.

Out of the 18 existing insurance companies in the country, only seven have capital of more than 500 million birr, according to NBE’s report. The insurance industry has been struggling with low market penetration and declining premiums in a stiff competition for the limited market niche.

However, the old directive remains active for new insurance firms in the pipeline until September 15, 2023. This means organizers of new insurance firms can attain a license under the existing directive in the next year. A discussion is underway to adjust license fee required to acquire new license and renew existing ones. The fee is expected to be adjusted by 2000 percent, though that is still under discussion.

The new directive states that insurance companies in the process of share subscription that successfully collect a minimum paid-up capital of 60 million birr for general insurance business, 15 million birr for long-term insurance business, or 75 million birr for both, and submit a final application to NBE within one year after the effective date of the new directive, shall get the license.

Industry players called the new directive “hair-raising,” as the insurance industry’s growth remains nascent.

“Raising the minimum capital from 75 million to 500 million birr at once is very difficult. The new directive is inconsiderable to the difficulties the industry is facing. The industry has achieved very little capital growth in the past 20 years due to the nascent environment. The NBE itself has contributed to the weakness of the industry,” said an insurance consultant speaking to The Reporter regarding the new directive.

“The NBE was never giving appropriate attention to insurance, as the central bank was primarily occupied with banks. We have been requesting the government for the insurance industry to be regulated by a commission, authority, or agency separate from the NBE. We believe this will help the insurance industry to get better support and better attention,” the consultant explained.

Yesuf Ibrahim is a founding member of the National Movement of Amhara (NaMA). He worked as the head of the strategic sector in the earlier stages of NaMA’s establishment. After its establishment, he worked as the head of the strategic sector for two years. After serving the organization as a vice chairman, he is currently working as the head of the party’s legal and ethical regulations and as a manager of the government’s property management authority. He received his LLM degree in law from Addis Ababa University and has worked as a law lecturer at a university. The Reporter’s Selamawit Mengesha sat down with Yesuf on issues concerning the party, region and the country at large.

The Reporter: How would you describe your participation from the time you first started working with the government as an opposition party, and the process until you became the manager of the government’s property management authority?

Yusuf Ibrahim: I have been heavily involved since the establishment of NaMA until its present stage. NaMA’s ideology is not an organization that paints itself as a liberator. It is synchronized with the people and the country.

Because the Amhara people have special problems and are being attacked by the constitution and narrative, protecting the people is one of the political targets. However, we have come to the historical notion that the attack on Amhara people is not something that has a special historical origin but an effort to destroy the country by making the community a victim.

The movement is one that could be traced back to colonialism. Weakening the beliefs, values, and social status of this community can be a way to destroy the country. Its origin is a colonial idea. Because of this ideology, a number of internal anarchist institutions were created.

By establishing such organizations, a political party based on identity has been established over time to save the Amhara people, who have suffered a lot. When the government moves into the phase of “change”, it is important to try because “change” has not yet been seen. When we look at the power alignment in Ethiopia, it is not a place where NaMA makes friends easily. In the course of time, after studying the intricate web of power, we analyzed the power that could become the friend of the enemy.

Compared to that, even if we can’t get along with everyone, we can work with anyone. As for figuring out to what extent and with whom, there are those who are known for backstabbing, so that’s a start. It was a timely analysis that was not particularly favorable to the Amhara. Therefore, it was established to fight anti-Amhara organizations.

Currently, even though it is an institution with many problems, we have an organizational position supported by a strategic document that we must work on together with the government. In general, it is necessary to work together with the government. When elections were planned to be held during COVID, there was pressure from many political organizations. Working together with the government was our own initiative.

We asked ourselves how we could safeguard the long-term interests of our country and people. We are a political organization and we take a position based on who we believe will betray us. We do this within the bounds of the law. It is necessary to work together with the government. They did not try to make it as big as NaMA, but there was pressure from other parties to make NaMA a part of the government, but the government did not want that. Regarding this, we explained to them that Prosperity is a traditional government.

This showed that the government was not proactive and did not identify its partners. As a party, it contributes greatly to the work of saving the country. We believe that we have especially united the people.

During this process, there was a conflict in the nature of misunderstandings between various issues, and because the problems of the parties and the government were not resolved quickly, it started to turn into a war.

With all of that happening, it was important to work with the government during that period. But keep in mind that working together with the government does not mean that we are the government but, in some cases, groundwork needs to be done. We had the idea that politics based on cooperation, not competition, was best suited for the landscape of the country.

Since the NaMA did not have a clear idea about working with the government (that is, we joined the government while the country was at war), we discussed it twice with the government when the issue was raised.

The matter has been tabled at the executive level. But it was fundamentally ignored by NaMA.

When the authority was given, I was called on the phone. I arrived in Gondar at 5 o’clock in the morning and was told that the appointment would be at 7:30. They have their own reasons for doing so. Since the appointment process was during the war, it was completed in secret until the end so as not to overwhelm the government.

On the side of the Prosperity Party, there was a bit of a misunderstanding because I received a call from the Addis Ababa city administration and then, on the same day, I received a call saying that they were looking for you for an appointment in the Amhara region; I made my own decision and chose Addis Ababa.

There is no problem with opposition parties working with the government. In Ethiopia, the process of democracy should gradually develop over time. Democracy needs to be improved by learning to work together.

In fact, it would be great if NaMA worked with the government. It would have been helpful if the lower level of government was more involved in areas such as kebeles and districts.

I made a proposal that if the government does not give us authority on the lower structure, we should give up big authority positions. But the party was not unified and could not consider the proposal.

NaMA is a party established to represent the people of Amhara. The Amhara people want you to be the voice of your party in any way. Working with the government means leading a multi-ethnic population, and haven’t you faced challenges in the middle?

This is also an issue of the reform process that the party intends to follow. The reform will work to clarify which level and which concept we are working on. There might be some changes in concept with the change of leadership.

It is about continuing to explore our strengths and solving our problems. The government does not exist only through the executive branch. The government has three branches and includes Parliament in the constitution.

We have representatives in the federal parliament in the state. The relationship between the party and its members at the top should be defined. As a party leader, when we work with the government, it must be based on the party’s principles. If I am going to move in that way, we should either leave the party or leave the leadership of the government.

There should be a strict procedure. In the current state of affairs, the federal structure that our party and the country are led by all is based on ethnic lines.

The constitution itself rarely even uses the word “citizen.” We want this to be liberal over time. We follow the philosophy that individual citizens should be the foundation of democracy. We want our organization to be a center for correcting the many mistakes made by extremists.

It should not be restricted only to Amhara. It should also be connected with other communities. Once this is fixed, the Ethiopian status will be announced. We believe that when we work as a party and as Amhara, we are operating as Ethiopia.

The Amhara community is the Ethiopian community. It has been pushed by many things. We are not saying it should be paid by revenge. We only remember the past to be able to fix the future. We do not believe that our people would be harmed if equality and freedom prevailed in Ethiopia. This is a modern principle. I do not believe that I am an advocate for the politics of a community at any time. As a company, we believe that we work for all Ethiopians.

It is one of the pillars of our society that it should not be affected by special circumstances. We want to be seen from the Ethiopian perspective. We do not want to separate Amhara. We want it to be governed by justice along with its fellow citizens. Amhara is affected in the same way that the rest of society is, but the incorrect narrative that has developed over time must be corrected. The question of who is the representative of political philosophy is bound to arise. Since NaMA is of Amhara origin, it is organized accordingly.

It is necessary to adapt to solve this problem for the time being. I think NaMA can adapt to all the parties. While working here, I am color-blind. I have neither the capacity nor the desire to take sides by saying who belongs to which nation. I also do not share such political views. We think that the perceptions created on us by the TPLF is in conflict with the people of Tigray. This is because the TPLF has been equating itself with the people of Tigray. But we still see their segregation. We believe that the TPLF is a criminal group. During the century, narcissistic institutions were created to hold back society and live for profit.

A while ago, it was tiring to find the issues that separate the people of Tigray and the people of Amhara. It was bound by various social, geographic, religious, and economic ties. We have to solve the existing problems with different justifiable methods. As it is known in Ethiopia, we do not accept ethnic politics. Therefore, I am running the people’s question in alignment with the government’s work.

Is there a division between the leadership of the government and other members of the party? What kind of situation is NaMA in right now?

Currently, changes are made every time political dynamism changes. The struggle is that when more energy is needed, society needs change. We have gone through many problems in our struggle for organization and society.

As the country’s problems continue to expand, members of the family are always at war. Therefore, leaders and members do not meet regularly. NaMA’s children are dying on the war fronts.

Don’t ask me how a peaceful party can fight with weapons. Since the declaration of seclusion, there has been a call to participate in the war. War has been waged on the Amhara people directly.

There are NaMA members in Raya, Wolkait, and in all the districts where there were members that were killed while in command of the brigade. There are several fighters in the structure. Therefore, the central one, the one at the top of each leadership, and the one at the bottom are not formally connected; we are connected informally.

During the second round of fighting, the party did not have a central committee or executive meeting for four months. Many gaps were created during that time, and it is not possible to update regularly. Politics brings the change of opinion closer to you when you meet and update regularly.

However, the more it is separated, the more the case is defined. So far, we’ve been supporting the idea that had majority support in debates. I have never seen a decision made without the approval of NaMA members.

Because we do not meet regularly, we have lost the opportunity to make decisions through debate and consensus. There were talks of NaMA coming into government appointments without the party’s consent, but in the process, although there were violations of discipline, the matter was adopted at the central committee level and this concept of working together will hopefully continue in the future.

The forces that wanted change were created in NaMA. First, there was a question that you should not lead the party part-time while in government, as the party requires a full-time dedication.

We will restructure. The party is a movement, and a movement needs to open up. It is not just a random party in power. Until the struggle reaches a certain level, the movement will open its doors and attract new talents, and it is not feasible to say that I will remain on the throne of the establishment once it is over. It is not correct, and it is not the principle of our struggle either.

People feel worried if there is no open discussion. There will be people who want to make the party a powerhouse. But in the end, the contradictions could not be easily reconciled.

On the other hand, it has shown differences in the way we see politics. But it is only in the top management that the difference should be noted. A certain difference was created between the Central Committee and the Executive Committee with only 10 to 20 people. There is no difference in the bottom structure of the broad members.

Due to Bahir Dar’s protest, I resigned on my own accord and changed from the position of vice chairman to the law department. What the party wants is not the change of one person or two. They say the movement wants to change from top to bottom. And this is their right.

An inquiring generation should be encouraged. There were misunderstandings with the top management. It deviated from NaMA and the general concept of democracy, which did not accept the reform and were going through a process that did not encourage internal democracy.

It is not a question of whether we like or hate individuals; it is a matter of history. It is the struggle of our people. It doesn’t define division for me. It is fundamentally settled by law. The structure is not split.

The main foundation is structure. I don’t think that the creation of division in the leadership of two or three people will divide the structure. We intend to hold a general assembly by October, which will hopefully restore NaMA.

Will the party become more organized by resolving the controversy within NaMA?

NaMA will come prepared. This happens at any party because it is a massive collection. The party needs time. The fight will then go into negotiations. The negotiation will be based on the concept of transitional justice from our point of view. There are a lot of processes that go through both material and human life. All of that should be resolved.

Politically, where are we going? Where are we going as a country and what is our collective ambition? NaMA must be prepared for this soon.

There are those who have applied what we brought as an idea to Ethiopian politics, which shows NaMa’s power to exert great pressure. After many pushes, debating and explaining to the people of Ethiopia, if politics is about to bear fruit, it will not happen unless the party exists.

There may be individuals with egos within the party leaders. They should be dealt with on the inside first. We were hoping that it wouldn’t show on the outside.

Most of the leadership and central committee members have petitioned the General Assembly’s request. A petition has been filed for reform. Yet undisciplined work is being done against the will of the people and the structure of the organization. That should be corrected. They are all being looked at from every angle.

Let us come to the current national issues. We have been at war for the past two years. Various efforts have been made to resolve the war peacefully, but another war broke out. Can you explain to us the whole political process and what Ethiopia’s politics should be in the future?

NaMA wants Ethiopian politics to be based on citizenship. Ethnic politics means a gathering of extremists where everyone who is offended hides. The TPLF and ONG should be held accountable for the Ethiopian-ism they attacked. It is a country known for caring and living together. Politicians must engage in a certain strategy. The structure should not be manipulated as intended.

NaMA will always cooperate with forces that can weaken the TPLF. As the TPLF has been in politics for a long time and has led the country, it must correct the mistakes of the past by deciding which is the most viable path for the future. They could not think of a way that would benefit the people of Tigray, whom they think they represent.

I do not think that the separation of the Amhara and Tigray peoples, a society that has lived together for many centuries and is bound by religion and culture, will achieve the goal. The people of Tigray must show that they are not enemies to the Amhara community.

During the war process, NaMA has been doing many other things by standing with the defense force, delivering food and coordinating with the diaspora. When the Amhara region was in battle, it gave studies on why they should fight for a purpose. It was heavily involved throughout the war.

How and under what conditions do you think the negotiations should be conducted?

Conflict always ends in negotiation. Even if the TPLF itself thinks that we should be divided, it knows that they will lack both resources and manpower. The TPLF should not go any further on the path of brutality and revenge. Ethiopia should follow the liberal approach and solve its problems. The war against the TPLF was not for revenge but was brought on by themselves.

In my view, I want transitional justice to happen. It is not because I believe transitional justice would calm everything down, but because it is an option. Justice is being served now, not for revenge but to bring harmony and move forward.

Negotiations should be conducted for the sake of peace and justice, with the decision that it will not happen again in the future and that what happened in the past was not right.

But in Ethiopia, it is seen that negotiations are used as a plot resource. It has been observed that only if the power to be negotiated is dangerous and one party wants to survive, is the proposal submitted for negotiation.

That is why I am afraid that the proposal presented by the TPLF might be some sort of treason. The deal requires a genuine broker. Since the war will inevitably end in negotiations, it all depends on who comes up with the better negotiating package. There is a risk that the negotiator who believes in violence may resort to violence at the negotiating table.

The TPLF should not exist as a political force. It is difficult to say that the TPLF is deceiving all these people with mobilization. I think most of them believe it. While the party was scattered, the individuals in the party lined up, reorganized, and attacked the defense force.

Such regeneration should not be ignored. The security guarantees should be adjusted and then they can enter into negotiations. A ceasefire is one way it can be done. But beyond that, there must be other stakeholders. The negotiations that should have been entered into after the collapse of the Derg left us in the situation we are in now. I believe that the Amhara region should have a negotiator on their behalf.

In the end, it should be known what level our politics should be at. Any person should be able to go and live in the area they want without being displaced from place to place because of ethnicity.

The TPLF has the capacity to rebel, not organize and re-enter. War itself should not be based on ethnicity. Who will benefit from this war?

There is no need to pretend like there is a war between two different countries. Both must work together. The negotiations must be conducted in moderation. Negotiations range from a ceasefire to a new proposal.

Although the African Union has little experience, it must mediate. They should all enter into the negotiation with good intentions. The very idea of secession is unethical.

Olufunso Somorin (PhD)

Olufunso Somorin (PhD), regional principal officer of climate change and green growth for the eastern Africa region at the African Development Bank (AfDB), was in Addis Ababa to participate in a high-level technical conference on climate change aimed at summarizing takeaways for the upcoming COP27 conference. He presented his research titled “Adaptation Agenda: Beyond COP27” during the meeting on September 13 at the Hyatt Regency in Addis Ababa. Ashenafi Endale of The Reporter sat down with the expert to learn more about initiatives underway to lessen the effects of climate change on the global south and the rest of the world.

The Reporter: Africa emits only four percent of the global Greenhouse Gas emmisions (GHG), so why should Africa bear the burden of climate damage caused by the rest of the world?

Olufunso Somorin: Africa’s total GHG emissions are 3.8 percent. Compared to countries such as the US, a region like Europe, or even a country like China, this is very low for a continent of over one billion people. Africa is not responsible for climate damage.

However, when it comes to the impact of climate change, Africa is the most vulnerable. That is why more conversation is crucial to changing the global climate change discourse.

The region that is the least responsible is the region that is the most affected.

How much of their GDP are African countries losing to climate change?

The impact is already affecting the African population, economies, infrastructure, etc. The development we have achieved so far is under enormous threat due to climate change.

Every African country spends anywhere between two percent to 10 percent of its annual GDP dealing with the effects of climate change. This is an enormous resource that could be used to build more infrastructure, train more teachers, invest in energy and other development projects. The magnitude of climate change in African economies is hugely affecting development.

A large chunk of the available climate resources in Africa goes to mitigation. Currently, you are advocating shifting that resource from mitigation to adaptation. What exactly do we mean by climate adaptation projects?

There is a paradox that the region that needs the most global climate finance to respond to climate change is also the region getting the least.

Africa receives only three percent of global finance. This is despite the fact that Africa is the least contributor to the climate crisis but the most affected. This is what we need to change. Between 80 and 90 percent of the money that comes to Africa is used to mitigate climate change. Of course, mitigation is also good for development. When you use renewable energy, you are increasing access to power.

But adaptation, which is implemented across many sectors, is much more rewarding. Our economies in Africa are very dependent on weather systems. Agrarian societies account for up to 80 percent of the population. The moment there is a change in weather, for instance, a five percent change in rainfall, can lead to a significant impact in crops, and instant impact on food security. If the rain is delayed just by a season, it has a direct impact on food security.

So adaptation entails doing agriculture correctly, using water resources appropriately, refraining from activities that affect rain, and changing one’s mindset in order to achieve a stable climate. Adaptation is not for one sector, it is for every sector. There is a possibility in every sector for adaptation.

How much is Africa spending on climate change, and how much of it is coming from local financial sources?

There is a data accuracy problem. There is a lot of funding and finance that many countries are undertaking to handle climate change. They are not reporting it. Keep in mind that African countries spend between two and 10 percent of their GDP to respond to climate change disasters. So the data is not perfect because they are not reporting it precisely.

Domestic resources for adaptation are still low. Of course, it is very much under-reported. Nobody wants a climate-resilient modern Africa. Nobody desires a prosperous and modern Africa. So it should be our desire and our job to be climate resilient. We already paid for it. Our responses must be structured, coordinated, and lasting.

Is humanitarian assistance mitigation or adaptation?

Humanitarian assistance is a short-term coping mechanism; hence, it is a mechanism. Adaptation is a continuous, long-term solution. You do not move from zero to a hundred at once. The greater the risk, the more we need adaptation.

So adaptation is always in relation to the risks at hand, so you cannot achieve the highest level of adaptation. People affected by climate change on the ground are coping every day. But those are short-term solutions. They cannot respond to larger pressures.

A humanitarian response, if it is to respond to a climate crisis, is an adaptation measure.

How can we shift from mitigation to adaptation?

We do not shift in a way that ignores mitigation. We allocate more values, resources, responses, institutional systems, and capacity for adaptation.

Have African countries approved the National Adaptation Finance Framework (NAFF) so far?

NAFF is an idea we are testing. In many countries, including Ethiopia right now, we have developed a number of policy documents on adaptation. We have a national adaptation program of actions (NAPA), national adaptation plans (NAPs), and an adaptation component in our NDCs. Ethiopia has a climate resilient green economy (CRGE) strategy. Apart from the NDC, there are a lot of adaptation plans in various sectors.

However, none of these plans specify where the money will come from. All countries, including Ethiopia, have the plans but lack the financing. That is why we are developing the framework.

For instance, if Ethiopia introduces a strategy that charges an additional two dollars per every tourist or traveler coming to Ethiopia, which the airline collects per ticket, and that two dollars goes to a climate resilient fund, that is an innovative way of raising money to finance adaptation. Ethiopia can also levy a 0.5 percent tax on every business operating in the agricultural sector, and we call it the ecological or agricultural productivity fund.

We can also formulate legal frameworks in which every private sector operator reports what they are doing on climate change. You give them a template for how they report. Then the finance is aggregated and channeled to adaptation. We are ultimately thinking of a national level adaptation approach.

There is no such thing as a climate change project. What we have is a “climate-informed development project.” That is very important. If we mainstream adaptation into all our development projects, that is how adaptation works.

Do you recommend mandatory finance contributions for the private sector and other institutions?

Consider it a business strategy. The financial framework in Ethiopia may be different from that in Kenya, Nigeria, or others. Adaptation is very local. Adaptation does not operate in a vacuum. Adaptation is nested in an institutional structure in place, social relations in a country, and state-society interactions. It is crucial to capture that and craft a financial strategy around it.

We must start thinking of adaptation as something critical for development. We have to find an innovative way of funding it.

How can the private sector turn the climate change crisis into a business opportunity?

The private sector itself depends on climate change. Climate change is a risk for the private sector too. By investing in adaptation, it is also a way for the private sector to guard its own investments and do sustainable business. Businesses are not completely insulated from the climate crisis. When they see that as a threat to their business and start to respond, businesses start to adapt.

The private sector is not exonerated. There are opportunities and advantages for the private sector to channel private capital into adaptability.

Do you think Africa is exploiting carbon trading?

The good thing about the carbon market is that even though it focuses on mitigation, it exists largely in sectors that are adaptability-oriented. Whether it is forestry, as in the African case, conservation, nature-based solutions, carbon trading can be an adaptation intervention. Reducing emissions is the core target of all NDCs, including Ethiopia.

Carbon trading is a good opportunity. The financial flow from the carbon market and investment can also trigger adaptation finance.

What do we expect from COP27?

Cop27 is very important for Africa, because we need to be able to make progress on the financial commitments that the developed countries have made. There is also something about capital that is additional and predictable.

We need capital in quantity and quality. We need a lot of money. Somebody can pledge a trillion dollars and put too many conditions on the table, so you may not get even five percent of it. In such cases, the money has the quantity side, but the quality side is very difficult.

Africa needs a climate adaptability roadmap. Climate action is just a basket containing mitigation and adaptability. The truth is that mitigation and adaptation are different. The approaches, strategies, implementation modalities, design, and projects are different.

What we need is an adaptation strategy cognizant of the African context that is structured and practical.

So in global climate finance, a specific resource for the adaptability finance segment is crucial.

One of the agendas expected at the COP27 is the issue of banning the extraction of fossil fuels. What is your reflection on this, as Africa is just beginning to extract its fuel resources?

It is still a conversation at this early stage. The global conversation at the climate conference is very cognizant of Africa’s concerns. When we say green energy, it is a gradual transition. You do not go from fossil fuel to green energy in one day. There has to be a gradual transition. Substitution for fossil fuel is in the long run. This plan must also capitalize on technology.

Do not forget that fossil fuel is a natural endowment for these countries. How do you tell countries like Angola, Nigeria, or others to go from burning fuel to 100 percent green? We need to clarify that. I do not think the global system is going to put a gun to your head. It is about placing attractive incentives in place, and support mechanisms, to make that gradual transition.

For African countries, they are not under any legal obligation to make that transition. There has to be an incentive and encouragement for it.

The decision made 13 years ago to commit USD 100 billion to Africa’s climate response remains a pledge. Now we expect more pledges at the conference. Why do we always believe in pledges that will not materialize?

The way global diplomacy works is that we must always agree to move forward. So there is an agreement in principle that USD 100 billion a year comes from developed countries. That is one side of the coin. The other question is, do they really actually deliver? Some countries did, and many did not. COP27 is expected to urge these countries to push for these pledges to be met.

Is there any mandatory legal framework or convention to make countries fulfill their financial obligations as per their contribution to GHG emissions?

Climate diplomacy does not work as expected. Probably global trade and other sectors based on international laws. But for climate issues, you need to reach consensus. Most of the time, you are not going to find a situation where there is a legal penalty. It is not an annual contribution and “if you do not pay, you go to jail.” There is no climate court. Countries must understand the value of those resources and their contribution to climate value.

Do you think the world needs green politics like in the 1980s and 1990s, or do you think the current climate crisis can be solved under the conventional mainstream political systems?

First, to be honest, we have made progress since. It might not be on the scale we anticipate. But we have made enormous progress by bringing people around the table. The fact that we are having conferences for parties to discuss climate is a good sign. Maybe developed countries might say “we pledged USD 100 billion for Africa annually. We managed 80 billion,” and they might promise to improve it.

That is why I call it a fragile win. It is not a complete win. But it is still a win.

Do we need something radical? The answer is no. We would not get that. Because global diplomacy does not work around radicalism, it works around building consensus on the solution and the way forward. Then some countries may be part of the solution. The bigger part of diplomacy is that the further you talk about problems, the more you can talk about solutions.

But for many African countries, that is not enough and you want to see results on the ground. That is still a work in progress. So we expect a progressive step forward at COP27.

You recommended in your research that “debt for climate swap” as an alternative climate financing method. Do you think that can work, as many African countries, including Ethiopia, have piled up external debt?

These are the innovative climate financing schemes we are talking about. During the 2008/9 financial crisis, a country not far from here, Seychelles, was affected, as a service-based industry was severely affected at the time by the crisis. The Seychelles was able to negotiate “a debt for nature” swap. So a certain portion of its external debt was swapped for natural protection.

Basically, instead of paying the external debts back, you are allowed to use the money to do projects and investments that sustain the environment. We can do that as well. There is also a resilient bond, which is doable.

African countries need to come up with different innovative financing schemes because the one that works in one might not work in the other.

The fundamental departure is, let’s go beyond concessional loans and grants. Let us bring in equities, risk-sharing facilities, and all the types of financial instruments. Debt for nature swaps are just one instrument. I really like this scheme, and I would love to see it work in other parts of Africa.

Currently, the Horn of Africa is being rocked by an elongated climate crisis.

The Horn of Africa issue is a very special case. This is a region where some of the scariest challenges of climate impacts are unfolding. This is also one of the most resilient regions. In the past, regions had to deal with drought every decade or so. But this time, the frequency has been very high. Yet, many governments, institutions, and even the private sector are rising to the task of dealing with the crisis.

But we must start planning for the long term. Our actions in the Horn region are always reactive. We always start doing things after a drought has struck. Early warning systems, productivity optimization, water harvesting systems, and other readiness are very important ahead of the next drought. Proactive adaptation investment is very important instead of the reactionary type of investment.

In the Horn, resources are mobilized every time drought comes around. Why is it that a lasting solution remains difficult? What kinds of projects are needed?

Some drought resilience programs and projects are underway. The AfDB is one of the largest donors of drought-resilient programs in the Horn region. What is important is that we must coordinate projects at different levels.

Many initiatives are done at scattered levels, and they are not coordinated. Most importantly, we must push for proactive investments. We need more focus and investment on development spending so we can reduce our humanitarian spending.

Governments keep saying “we do not have money” and suddenly, when a crisis happens, they find money. Why do not we find the money before the drought strikes? That could have saved a lot of lives and damage.

Drought can happen, but it must not leave a humanitarian crisis behind. There are countries that face drought all year round. But we have to find different ways to change things.

Most importantly, we need partnerships at different levels.

Sewagegn Chane is director of the Public Financial Institutions supervisory department at the Public Enterprise Holding and Administration (PEHA), which regulates state-owned enterprises. Sewagegn is currently responsible for directly supervising the Development Bank of Ethiopia (DBE) and the Liability and Asset Management Corporation (LAMC). The Commercial Bank of Ethiopia (CBE), Ethiopian Insurance Corporation (EIC), and the National Lottery were also under his supervision, until they are transferred to Ethiopian Investment Holding (EIH) past May.

Working in public financial institutions for 30 years, Sewagegn initiated the establishment of the stock market in Ethiopia, which is bearing fruit eleven years after the first feasibility study. He was also vocal and key in rescuing the DBE, initiating Ethiopia’s first reinsurance company, Takaful (Islamic insurance), among others.

Sewagegn is also researcher at i-Capital Institute and organizer of the East African Finance Summit. Currently, he is leading two teams formed at the institute, studying the establishment of an investment and agricultural development banks in Ethiopia. Although he has been advocating ending state protection over the financial sector for years, he has currently changed his mind, just as Prime Minister Abiy Ahmed (PhD) authorized a policy that envisages opening up Ethiopia’s financial sector to foreign competition. Sewagegn believes the banking sector should remain closed at least for the next few years. The Reporter’s Ashenafi Endale sat down with the public finance guru. The excerpts, does not necessarily reflect PEHA’s position.

The Reporter: What is the progress in reforming public financial institutions, which commenced after Abiy came to power?

Sewagegn Chane: The biggest reform we undertook is in the DBE. In 2018/19, the House of Peoples’ Representatives (HPR) decided DBE cannot continue as a financial institution and debated on how to dismantle it. That year, the bank reported 765 million birr loss so the HPR decided that the bank is not supporting itself, let alone the economy.

Myself, Haileyesus Bekele, the president at the time, and Yohannes Ayalew (PhD) DBE board president at the time, were called by the HPR to explain the issue. At that time, Public Finance Institutions Agency was a separate entity outside PEHA. The agency was led by Sintayehu Hailemichael (PhD) and I was the deputy director for operations. When some 36 SOEs were put under PEHA in 2018/19, the agency was included under PEHA, as a directorate.

The Budget and Finance Standing Committee at the Parliament insisted the DBE must be dismantled, because it was reporting a loss consecutively. The three of us were called to give our final comments on the committee’s decision. The committee was told that the fundamental problem of the bank was the lack of institutional independence.

Everybody was intervening in the bank, and it was unable to operate as a bank. The PM, other ministers, sectorial institutions, and even individuals have been meddling in DBE’s operation. Secondly, the bank gives loans but does not collect. Those who took DBE loans view it as the government’s budget, not as a client. Most of them had the “developmental investors” plate.

They take a loan and divert it to other businesses. Commercial farming in Gambella and Benishangul are good examples. I was in Gambllea for a year and half, to study why DBE’s loans failed there. There are so many rain-fed projects there. Particularly, six of those that took loans completely diverted the money to other businesses, instead of the commercial farming.

I stood before the standing committee, and pledged to give the DBE additional time. I told them if institutional freedom is restored, relationships with clients will be straightforward, and the bank’s loan collection capacity rebuilt, bringing DBE on track. So I asked the standing committee to give us just one year, and if we fail to rescue the bank in that year, then the committee can dismantle it.

Yohannes on his behalf explained how the IMF and the World Bank are happy to see the DBE dismantled because they do not want development banks in developing economies. He also elaborated how important a development bank is for Ethiopia. After a brief tea brake discussions, the standing committee announced it granted the one year time.

Immediately, we embarked on the reform agenda, introducing seven reform pillars. One of the biggest reform pillars was reducing DBE’s Non Performing Loans, which was over 40 percent at the time. If the bank cannot collect the loans, it cannot disburse loans the next time.

DBE’s NPL at the time was weighed in rain-fed agriculture and textile. So, we stopped any further loans for rain-fed agriculture. In textile, many foreign investors took loans in billions but did not pay, so we decided to take over all the projects that are not paying back their loans, and transferred them to other investors.

We also took the contract management of non-performing projects. For instance, the DBE took over the management of Elsi Addis, Etur and other textile factories, for the time being. Except Etur, most of these projects have been transferred to new investors, without reaching the foreclosure stage.

The major project left on our hands to date is Ayka Addis.

The other serious measurements we took were barring any officials from intervening in any loan appraisals and disbursement processes. Before the reform, orders for some loan approvals were given from the Office of the PM. Officials from the Industry, trade, agriculture, and many other ministries used to give such informal orders to the bank. Now, even the DBE board cannot involve in loan disbursement cases, except on strategic issues.

We managed to reduce DBE’s NPL to 30 percent this year, including Tigray loans. It is actually 17 percent, if loans in Tigray are excluded, which are affected by the war in northern Ethiopia. Profit comes from loan interest. If the loan is not collected, there can be no profit.

We managed to generate 1.2 million in 2019/20; just a year after the reform was launched. This year, the bank generated 3.9 billion birr in profit. If we did not put aside 4.1 billion birr provision for the Tigray loans, DBE’s profit this year could have been 7.8 billion birr. The DBE is rescued now and everybody is acting as a client now.

DBE’s source of finance is the guarantees from the Ministry of Finance and the National Bank of Ethiopia (NBE). The capital has increased from five million to one billion. The macroeconomic committee approved a study to allow new DBE bond, effective since January. This is apart from the GERD bond, which is the DBEs source of finance.

Before the reform, all the financial indicators of the bank were negative, and unhealthy. We completely reversed all of that, except for the NPL. Before the reform, there were only expenses and disbursement, but now there is income.

Out of the 31 strategic measurements we stipulated under the seven reform pillars, 21 are aggressively implemented and ten are in the process. Only one measurement has not started, which is the digital technology and modernization initiative.

The PEHA and DBE’s board has contributed for the success of DBEs management. One of the positive factors is the steel-serious discipline of Tegegnework Getu (PhD), the board chair of DBE. As a board chair, he is opaque to any external influence or favor. He never took stipends and incentives allocated for board chairs annually. Even he uses his own car for DBE activities.

Yohannes was the chief economist at the NBE for a long time. How did you believe in him, that he could rescue the bank?

Under past presidents, the bank had many deviations and exceptions. Instead of going through loan approval and disbursement procedures, loan seekers directly contact the president and get the loans, informally.

For instance, after we banned DBE loans for rain-fed agriculture in 2018/19, the bank gave 120 million for rain-fed agriculture project. The president at the time said he was forced because certain officials at the Ministry of Agriculture managed to give the order via the Office of the PM.

Surprisingly, the board chair does not know about the loan. The bank was bleeding. We had to be brutal to stop the bleeding. Most of the bad loans were given during Isayas Bahre’s time. Both Haileyesus and Getahun Nana were unable to save the bank. Our biggest worry was that Yohannes might decline the role to lead the DBE.

Over 200 large scale agricultural projects, and a number of foreign textile investors took loans from the bank and failed to pay. Are you pursuing them legally?

We are trying to acquire the lands currently. Our biggest problem now is with the regional governments of Benishangul and Gambella. The land is the key asset the investors provide as collateral to take the loan from the bank.

After the investors fled without paying the loans they took, the DBE has to acquire the lands, since it is the collateral. Once we finalize acquiring the lands, we will transfer it to other investors. Then we will recover the previous loans.

I heard the Benishangul and Gambella regional governments are demanding it pays taxes on the lands?

We reached agreements on some of the lands in Benishangul. There are ongoing debates on the amount. The bank agreed to pay the tax, if it agreed on the amount. The regional governments usually give one plot for multiple investors, so one certificate is given to multiple investors. The regional agriculture bureau has been reporting to us that the lands were being cultivated by the investors, which was false.

In general, rain-fed agriculture and textile investments have bled DBE.

For instance, Ayka Addis’s investor used informal channels to get the loans, instead of going directly through the bank. It either goes through the PMO or other officials. Solving all this was not simple.

Most of DBE’s clients were unruly. They had the right to take the loan, and the right not to pay. So we disciplined the clients first, and reversed the bank’s practice of negligence. All this was done in three years.

How much is the land leased for the rain-fed projects?

The rate depends on the regions. Basically, tax, lease and anything related to the land is handled by the investors. But since the investors went bankrupt, and the DBE took the lands, now the bank has to pay them. This is the reason why the regional states are asking DBE for the taxes, because it is under the bank now.

The investors who took the land in regional states for commercial farming, left, and the tax holiday period is over. So regional states are now claiming the taxes and the DBE agreed to pay. This is the game.

Did the Gambella commercial farms failed by design?

The loan was supported by policy. The policy of initiating commercial farming and modernizing the agriculture was not wrong. So the DBE prepared policy and procedures.

The major factor for the failure at that point, was the decision to give loans for rain-fed agriculture. This was a mistake because the investors knew the loopholes and abused the loans and failed to return it.

The DBE is on the right track now but business continuity is more critical.

What are DBE’s sources of funds, after the NBE’s 27 percent T-bill is replenished?

The NBE introduced another bond this year, in which banks channel one percent of their loan portfolio to the DBE. In the past six months, a bit more than 10 billion birr has been channeled to the bank from this new scheme. Once we start from insurances, these two schemes will become our biggest source of funds.

The GERD bond and loans from international banks also generate finance. It also accesses external funds like SME loans, through the MoF. DBE’s T-bill is almost zero currently.

How much is the loan interest the DBE is paying currently, when will the rest mature?

The DBE pays interests by adding two percent on the saving interest, which means nine percent. On the other hand, DBE’s interest rate is between 11 percent and 12 percent, the least being for import substituting projects. The margin covers its administrative cost. So the bank is able to pay all its interests duly.

DBE requested to put Tigray NPL’s off its balance sheet. But NBE officials told The Reporter that it is not going to take it off its balance sheet.

If Tigray’s NPL is put-off DBE’s balance sheet, DBE’s NPL could be 12.5 percent. But including the Tigray NPL, which is 10 billion birr, the NPL stands at 30.4 percent. What we are saying is this 10 billion birr in NPL happened by factors out of DBE’s control. We are not asking the NBE to cancel the Tigray loan.

We undertook a detailed study on how the NPLs could be taken off the balance sheet, and presented to the NBE. We do not know why NBE is silent on the issue. The CBE also requested the NBE to take off two billion birr off CBE’s balance sheet. This was also studied and presented to the NBE.

The NBE first said the request should be processed by the Bankers Association but the issue is still in the process. It is illogical to keep inactive numbers on banks’ balance sheet. When unrest occurred in Oromia over the past few years, the NBE allowed loans of affected investors in the region to stay off banks’ balance sheet. The same can be done for Tigray. It is not a big deal. It is NBE’s decision but I do not know why it is reluctant when it comes to Tigray NPLs. Tigray NPL does not represent DBE’s actual performance, which is outstanding.

DBE’s outstanding loan is 63.4 billion birr. Total NPLs stood at 19 billion, of which 10.1 billion birr is created in Tigray since the war. The president of DBE requested to exclude the Tigray NPL but PEHA does not agree, unless the NBE approves it.

Another investor is negotiating to buy Ayka Addis. Will this be the last negotiation?

A number of potential buyers have been trying to buy Ayka Addis in the past but failed. Especially a Chinese investor was very eager to acquire Ayka Addis. Any potential buyer is expected to contribute 50 percent of Ayka Addis’s portfolio. For instance, the initial investment loan was USD 1.7 billion so the buyer is expected to contribute half of it. But the Chinese lacked capital so it requested to contribute only 10 percent of it, which means around USD 200 million, so we refused because we cannot breach the 50 percent law.

If Ayka Addis is sold, DBE’s NPL will drop to around 15 percent, from the current 30.4 percent. Ayka Addis is holding a huge loan. The principal loan is 1.7 billion, a decade ago. Including the interest, probably it is around USD three billion by now. The value of the machines, factory building, raw materials when the DBE received Ayka Addis, is valued at USD 1.79 billion.

By the way, we are still paying the salary of 4,500 employees of Ayka Addis, though it has not operated for years now. It is between 13 million birr and 14 million birr every month. We cannot abandon the employees, after the Turkish investor left. We are carrying all this cost.

There were also other alternatives for Ayka Addis, other than selling it.

There were three major options tabled. The first is selling to a capable investor or buyer. The second is operating Ayka Addis under a management contract, just like Elsi Addis and the third was repurposing Ayka Addis into an Industrial Park. Some three potential investors have been negotiating. The Chinese came last.

Currently, another negotiation is underway. We hope this will be the last one. It is a consortium of local and foreign investors. We will disclose it when it materializes. Ayka Addis’s operation ranges from cultivating cotton to sewing the clothes. It pins the cotton, dyes it, and makes the clothes. It is an end-to-end project. So the potential buyer is expected to specialize in all these value chains.

Will the new buyer pay Ayka Addis’s accumulated tax?

Under Ethiopia’s law, a company does not pay taxes if it declares bankruptcy. After the DBE took over Ayka Addis, the tax authorities are saying Ayka Addis must pay tax, since it did not undergo liquidation. Ayka Addis was not operating for the past eleven years. So, the tax authority is asking for back-taxes for all these years, stating the project did not declare liquidation. So we are arguing with the tax authority.

But the DBE declared foreclosure?

When the Turkish investors left and the DBE started managing Ayka Addis, the tax authority started asking for tax.

Amazingly, Bmet cables, one of the Turkish investments abandoned after taking huge loan from the bank is a good example of how much Turkish investor’s exploited us. Under the Turkish investor, Bmet cables utilized 40 percent of operational capacity but they were not paying their loan.

Now, the local buyer, Tadesse Admasu of Red Star Trading, is operating at 12 percent of its capacity due to different reasons. The buyer acquired Bmet paying 890 million birr. Now, it has paid all the loans owed to Bmet.

How much has Ethiopia lost because Turkish investors left the country without paying DBE loans?

Before, their equity contribution was 30 percent. This means the DBE contributes 70 percent of the investment. Under the previous ratio, a Foreign Direct Investment comes with USD 30 million, and takes 70 million. The foreign investors left without paying the 70 percent loan they took from the DBE. But now, we adjusted the equity contribution to fifty percent, for foreign investors. Local investors pay 20 percent.

FDI is needed to bring technology, capital, forex, and create jobs. It did not meet any of these targets.

One of the other loopholes FDIs has been exploiting is that they highly under invoice export price. They usually have subsidiaries or a mother company operating abroad. So they export the clothes to them, with fake price documents. These investors also import raw materials only from those mother companies or subsidiaries abroad. The FDIs operating in Ethiopia do not want to use local inputs. They export t-shirts with USD 60 cents from Ethiopia. But the buyer abroad, which is affiliated to the FDI, resells it at a much higher price. So the FDIs generate meager forex for Ethiopia. Their bank statements also indicate loss, always. Especially the expats brought by FDI are highly abusive. Bmet’s former CEO has been paid 500,000 birr in salary monthly. This is excluding housing, vehicle and other accommodations. Now we decided to reduce expats inflow.

That is why, just when we started being strict on Ayka Addis that the Turkish investor’s fled Ethiopia immediately, without handing over the project’s properly. I think they left for Burkina Faso.

Are there new public financial institutions planned to be established, particularly to finance long term development projects?

Four years ago when the bank was in deep trouble, we conducted a study to determine its fate. One of our alternative recommendations in the study was to breakdown DBE into three different policy banks; into an industry bank, agricultural bank and an SME bank. Finally, a decision to reorganize and reform DBE as it is was made. In the meantime, we conducted a study to renovate the bank; the ATA was also making moves to initiate the establishment of an agricultural bank.

The initiative to establish a stock market was also conducted by us. We have been trying to convince the government to establish a stock market for the past eight years. It is only realized under Abiy.

Now, the importance of an independent agricultural bank and investment banks is imperative for Ethiopia. In line with the agricultural bank, agricultural insurance and micro-insurance firms are necessitated equally. These firms protect the loans provided by the agricultural bank to farmers.

We conducted the “Proposal of restructuring public banks” in 2014. The proposal included the recommendation to determine the fate of the former Construction and Business bank (CBB). We did not just demolish CBB without a proper study.

The same studies have later been modified for the DBE. The modified study also recommended the vitality of Agricultural Development Bank, and mortgage bank (construction bank). The plan is for the CBE to stop mortgage financing, and transfer the role to the new Construction Bank (CB). In fact, the proposed CB partly takes on the role of the now defunct CBB.

Currently, we have established two working groups at i-Capital Institute, studying on investment bank and the agricultural development bank each. PEHA has the mandate to give birth to new public enterprises, apart from managing the existing ones. It can also decide on mergers, and dismantling of SOEs.

As long as Ethiopia is progressing from an agrarian economy to manufacturing, a stock market is very essential. If we need more robust manufacturing companies, we must build a robust stock market, where the companies are listed, float shares, and mobilize capital. A manufacturing industry cannot grow without a stock market.

The banking sector fears to give loans to manufacturing industries because the banks fear losing their saving capital. Once the stock market is active, the interest in banks will drop. But the stock market will grow faster, hand in hand with manufacturing.

I hope the establishment of an agricultural bank is realized soon. Ethiopia has an agrarian economy. But the economy is currently distorted, as the service sector constitutes the largest portion of the GDP. In a bid to transform Ethiopia’s economy from an agricultural to a manufacturing industry, agricultural development bank cannot be an alternative. Agriculture is not developing due to lack of finance, fundamentally.

The agricultural bank also needs an insurance firm, to cover the risks of the loans. The bank finances tractors for the farmer, and then the insurance firm insures the machines as well as the harvest. It is highly imperative that agricultural development bank and investment banks are essential for this country.

A secondary market cannot operate without an investment bank. Since we are nearing the establishment of a stock market, we also need to establish an investment bank.

For instance, banks are planned to be listed on the stock market. The investment banks will study the banks, as well as other IPOs, inside out. So, the investment banks determine the exact value of shares, and securities. This means IPOs, including commercial banks, cannot determine the price of their shares by themselves, unlike now.

The underwriter preserves the interest of every stakeholder, investor, IPOs, and others. It sets standard but the investment bank cannot be listed on the stock market itself.

Once the two working groups wrap up their studies, the documents will be reviewed by stakeholders. Then, we will present the final documents to the government to decide on whether to drop or implement the study’s recommendations.

A few years back, we travelled to Nigeria to visit their central bank and development bank and took three months of training. I was amazed by their Islamic insurance. We extracted lessons and brought it to Ethiopia.

The government is saying the banking industry will be opened for foreign competition very soon. What is your take on this?

Before, we have been asking the government to open the banking industry. But recently, we have changed our perspective. We prefer the government to delay the opening up for now. I precisely know the exact capacity of each local banking institution.

Before, our assumption was that local banks will merge, at the face of an open up. So we have been advocating for it to open, at each meeting and financial summits.

Basically, banking and insurance businesses in Ethiopia is a captive business. The banks are formed either under religious, ethnic, political sentiments or other bands. So, Ethiopian banks and insurance companies lack the business mentality. If they had a business mentality, they will work with anyone who has a viable business idea. So I believe the government must delay the sectors opening up.

The NBE recently said mandatory merger and acquisitions will be forced on local banks, when the sector is opened up.

That is inevitable once the industry is opened up. Of course mergers can happen even before the opening up. For instance, the NBE raised the paid up capital to five billion. Those who failed to meet will have no option but merge. The NBE can also raise the reserve let’s say to 25 percent, from the 10 percent currently. Many banks could have merged. This way, competitive banks could be created.

Western banks, especially Europeans, strongly pushed Malaysia, Korea, South Korea, and Thailand to open up their financial sector. Once these Asian countries opened their financial industries, the western banks withdrew after joining the sector. The Asian economies were hit by financial crisis as a result.

But eventually the Asian tigers avenged the western banks. The 2007 financial crisis hit western banks, because the Asian tigers suddenly raised their banking capital. They intentionally gave more loans to American banks. Then the American and European banks disbursed those loans to mortgage, and small businesses. The western banks failed to pay their loans to the Asian tigers, taking revenge twenty years after the western banks played foul.

We do not need such turf wars.

The only reason Ethiopia’s economy is doing well after the war in the past two years, is because our financial industry is closed off. Our economy survived because the banking sector is not open.

If banking was opened to foreign competition, the economy could collapse, under this war. And had it been opened before the war, the economy would have collapsed by now. Foreign banks simply close and leave, when there is a war.

Many people say the banking industry should be opened. That is wrong. They do not know the exact capacity of local banks in surviving foreign competition. I have no confidence even in the CBE.

The CBE has a huge NPL owed by the government. The government owes over half a trillion birr. Unless it is fully paid, CBE will face many challenges.

So, I insist the banking industry should not be opened at least in the next three to four years. Local banks need up to four years to prepare. Mandatory merger is simple.

When the Home Grown Economic Reform was launched in 2019, the government promised to reduce the states hand in the economy, and reduce the pressure on CBE and domestic credit. Is there any progress?

The CBE is not giving loans to the government now. State pressure is reduced. The CBE has studied new organizational structure, and is implementing new business strategies. Before, especially during the previous regime, state banks give loans as if it is a budget. They do not collect the loan.

Do you follow up on CBE’s branches abroad?

We evaluate them during reporting. The bank has branches in Juba and Djibouti. The Juba branch is performing very well but the Khartoum branch was suspended while in the pipeline.

Did the CBE move from PEHA’s supervision, after it is placed under the EIH?

Currently, the CBE is in transition process, from PEHA to the EIH.

I heard SOEs will be categorized under three supervisory institutions according to their performance. These are the EIH, PEHA, and the LAMC. Is that true?

What I know is that there are SOEs going to the EIH, and the rest will remain under PEHA. The LAMC by itself is an SOE and is under PEHA’s supervisory. LAMC is under my supervision. The CBE, DBE, EIH, LAMC and national lottery, are under my directorate.

The EIH has recently on-boarded 27 SOEs, out of the 36 SOEs under PEHA. Does that mean they are completely out of PEHA?

The investment part of SOEs goes to the EIH, while the enterprise management aspect remains under PEHA. But so far, there is no definite decision on whether the selected SOEs completely move to the EIH, or partially. This is decided by the macroeconomic team of the PM.

Will all SOEs be listed on the stock market?

The plan was for the SOEs to list a certain percent of their value on the stock market. If SOEs like ET, ethio telecom and others trade 10 percent of their portion on the stock market, it builds the public’s confidence. But SOEs must meet stringent financial reporting systems.

I also hear that five percent of ethio telecom’s share will be sold on the stock market. SOEs that meet the right financial reporting system will be able to float shares on the stock market.

People are facing difficulties acquiring houses because real estate companies collect money from house seekers and disappear. The stock market will also solve this. Everything will take shape under the secondary market.

The government is allowing the establishment of new banks in the last two years. But lately it confirmed the opening up of the banking sector for foreigners. Isn’t this sending mixed signal?

Mergers can be done at any time. Then local banks can consolidate and ready for competition. PEHA is exemplary in merging CBB with the CBE six years ago. Private Banks must follow suit.

Local banks are in a comfort zone, registering lump profit, not because they are providing a class service. They are profiting because they are protected. Under state protection, they do not have to improve service. They survive at the expense of the client. Millions are saving in bank but only a few thousand get loans. All of this will change, once foreign banks come.

To allow foreign banks, the banking proclamation, banking service code and the investment regulations must be revised. Especially, the code must allow banking for foreigners. The existing commercial code allows banking and insurance only for Ethiopians. Non Ethiopians cannot be investors, or operators.

Do you think the financial sector will be opened before five years?

I think so but I prefer it being delayed. All banks are giving loans to the service sector. Manufacturing and agriculture cannot grow unless we have banks that can give loans for long term projects. There are no consumer loans too.

Insurance companies complained over NBE’s order to direct 15 percent of their profit to DBE bond.

The rate has been reduced lately and the insurance companies agreed.

ሪፖርተር መነሻ ገፅ | Ethiopian Reporter | ሪፖርተር

አሜሪካ ሕወሓትን በማሳመንና በመጫን በሰላም ሒደቱ ትልቅ ሚና መጫወቷን የኢትዮጵያ ዋና ተደራዳሪ አስታወቁ

ዜና ዮሐንስ አንበርብር - November 9, 2022

የተመድና የአውሮፓ ኅብረት አበርክቶ አሉታዊ እንደነበር ጠቁመዋል በመንግሥትና በሕወሓት መካከል በደቡብ አፍሪካ የተካሄደው የሰላም ድርድር እንዲሳካና ስምምነት ላይ እንዲደረስ፣ የአሜሪካ መንግሥት ከፍተኛ አስተዋጽኦ ማበርከቱን፣ የኢትዮጵያ መንግሥትን የወከለው ተደራደሪ ቡድን መሪና የጠቅላይ ሚኒስትሩ የብሔራዊ ደኅንነት አማካሪ ሬድዋን ሁሴን (አምባሳደር) አስታወቁ። ሬድዋን (አምባሳደር)...

ፓርላማው በማረሚያ ቤቶችና በፖሊስ ጣቢያዎች ተፈጸሙ የተባሉ የመብት ጥሰቶችን ሊመረምር ነው

ሲሳይ ሳህሉ - November 9, 2022

ታጣቂዎች በኦሮሚያ ክልል አፍሪካ ጁስ ኩባንያ ላይ ባደረሱት ጥቃት ዘጠኝ ሰዎች ተገደሉ

አማኑኤል ይልቃል - November 9, 2022

የታራሚዎች የይቅርታ አሰጣጥ ከሙስና የፀዳ ስለመሆኑ ጥርጣሬ እንዳለው ፓርላማው ገለጸ

ሲሳይ ሳህሉ - November 9, 2022

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Ethiopian Reporter Political News

Officials at the Ministry of Agriculture are worried about the global fertilizer scarcity as the nation becomes unable to endure the increase in the price of the agriculture input owing to the conflict between the Ukraine and Russia.

The global fertilizer crunch continued as the country sees a growth in demand for fertilizer due to expansion of irrigation farms and new agriculture projects that prompt farmers to increasingly shift to artificial fertilizer with subsidized price.

“Demand is growing substantially as Meher farms expand and irrigation activities surges across the country,” said Umar Hussein, the Minister of Agriculture, in an event held at Skylight Hotel to honor stakeholders who have been involved in the timely delivery and distribution of fertilizer.

Last year, the price of fertilizer more than doubled in the international market, a situation that have bulged Ethiopia’s annual budget for the commodity from USD 600 million to USD 1.2 billion.

“The last year has been very challenging due to forex shortage and security concerns that have affected distribution,” Umar said.

This week, the World Bank warned that there would a further increase in price of fertilizer, with the rapid increase in gas prices turning into an increase in the cost of the commodity.

“The challenge is meeting the immediate demand for fertilizers to support next season’s crops. Current projections suggest that Africa’s unmet demand could reach four million metric tons this year, with West Africa facing the most acute challenges this growing season,” said World Bank Group President, David Malpass, during the opening of the 77th session of the UN General Assembly (UNGA 77) on Tuesday, 13 September 2022.

Last year, the Ministry had to float a tender more than twice as suppliers failed to fulfill contracts due to the global fertilizer crisis, which was first caused by the coronavirus pandemic and then worsened by the war between Russia and Ukraine, which supply over 50 percent of inputs needed to produce urea.

“Taking a lesson from last year, we are in contact with potential suppliers to avoid delays. Invitations have been already made,” said Sophia Kassa (PhD), State Minister for Investment and Input Sector at the ministry, told The Reporter.

During the last fiscal year, almost 13 million quintals of fertilizer was supplied by Fertiglobe, one of the largest producers of the nitrogen fertilizer in the Middle East, and Morroco OCP, a renowned supplier in Ethiopia, where it is currently building a fertilizer plant in partnership with the government.

The government expended a total of 64.5 billion birr for the procurement, shipment and distribution of fertilizer last year. It accounts for 11.4 percent of the budget during the same period.

The government had to allocate another 15 billion birr in subsidy as farmers become unable to withstand the surge in price of fertilize quadrupled in the local market.

Three directives on broadcast media go operational effective this month

The Ethiopian Media Authority enacts three directives to regulate the public, community, and commercial broadcast media. They are part of the eight directives the Authority has been issuing since the ratification of the media proclamation in April 2021.

To be applicable beginning this month, the directives list the rights and responsibilities, and how licenses are granted for the public, community, and commercial broadcasting media. The directives rule on how television and radio media should conduct their reports during national occasions like elections.

Lists of administrative measures by the Authority as well as legal actions have also been stated. Beginning from warnings to suspension of licenses and legal actions, several measures would follow should the media houses engage in illegal activities.

One of the actions, as it was the practice before, was to prohibit the dissemination of a program considered to be a danger to national security before going public on any of the broadcast media.

On the issue of impounding and injunctions, article 45 of the proclamation states that prosecutors might request a court order to stop publication of the programs. In the event of an emergency, the broadcast of the programs will be called off with the order of the Ministry of Justice. This should be notified to the court of law within 48 hours.

The Authority also prepared and approved several other directives to govern the media landscape in Ethiopia. These include directives for religious broadcasting services, online media, and print media.

Following the approval of the religion broadcasting service directive, which forced the registration of religious-based media, several of them have been registered.

Among the 46 media outlets that started the process and are working with the Authority to finalize registration, 23 have received their licenses, according to Dessie Kefale, communications director at the Authority.

“There was a deadline on which all had begun the registration process. Some of them were already operational for a long time, of course,” he said.

Before the ratification of the proclamation, as Dessie explained, there had not been adequate legal frameworks for all kinds of media houses.

All the directives and regulations before last year’s proclamation were based on the Mass Media and Access to Information issued in 2008, and Broadcasting Service Proclamations issued a year before that.

“There are several other laws under discussion and preparation, which includes a directive on hate speech and misinformation,” Dessie told The Reporter.

It is the “largest pandemic fraud” in the US

Ethiopians are among 47 people who have been charged in connection with a fraud scheme in the US involving Feeding Our Future. The alleged fraud is said to be the largest pandemic fraud in the country, involving USD 250 million.

The defendants are charged across six separate indictments with charges of conspiracy, wire fraud, money laundering, and bribery. The defendants are suspected of creating dozens of shell companies to enroll in the program as Federal Child Nutrition Program sites, while allegedly creating shell companies to receive and launder the proceeds of their fraudulent scheme.

The defendants submitted false invoices purporting to document the purchase of food to be served to children at the sites and submitted fake attendance rosters purporting to list the names and ages of the children receiving meals at the sites each day, according to the US Department of Justice.

“These indictments, alleging the largest pandemic relief fraud scheme charged to date, underscore the Department of Justice’s sustained commitment to combating pandemic fraud and holding accountable those who perpetrate it,” said Attorney General Merrick B. Garland. “In partnership with agencies across the government, the Justice Department will continue to bring to justice those who have exploited the pandemic for personal gain and stolen from American taxpayers.”

Feeding Our Future’s founder and executive director, Aimee Bock, was among those indicted. She is charged with conspiracy to commit wire fraud, conspiracy to commit federal program bribery, and federal program bribery. She oversaw the USD 240 million fraud scheme carried out by sites under Feeding Our Future’s sponsorship, according to the US Department of Attorney.

An Ethiopian born Abdikerm Abdelahi Eidleh, 39, of Burnsville, Minnesota, is charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit federal program bribery, and money laundering. Eidleh was an employee of Feeding Our Future who solicited and allegedly received bribes and kickbacks from individuals and sites under the sponsorship of Feeding Our Future. Eidleh also created his own alleged fraudulent sites.

Ethiopian born-US nationals, Bekam Addissu, 39, Hadith Yusuf, 34, and Hanna Marekegn, 40, are each charged with one count of conspiracy to commit wire fraud. Another six siblings who are originally from Ethiopia have also been charged with wire fraud, federal programs bribery, conspiracy to commit money laundering, and money laundering.

Another Ethiopian-born US national, Liban Yasin Alishire, 42, the president and owner of Community Enhancement Services Inc., a company located in the JigJiga Business Center in Minneapolis, is charged with receiving more than USD 1.6 million in fraudulent Federal Child Nutrition Program funds. Ahmed Yasin and Khedir Jigre have also been charged with conspiracy to commit wire fraud and money laundering in the same center. These three defendants have been accused of buying properties, including beach property, in Kenya.

Another defendant with links to Kenya, Salim Ahmed Said, 33, of Plymouth, Minnesota, is charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit federal program bribery, federal program bribery, conspiracy to commit money laundering, and money laundering. Said was the owner and operator of Safari Restaurant, a site that received more than USD 16 million in fraudulent Federal Child Nutrition Program funds, the US Department of Justice said.

“An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law,” the department said.

A startling revelation regarding the war in northern Ethiopia was announced last week by the International Commission of Human Rights Experts on Ethiopia, an independent organization tasked by the UN Human Rights Council with conducting a thorough and impartial investigation in Ethiopia. The stern warning emerged after the organization released a study that stated there are reasonable grounds to believe that parties to the conflict had violated and/or abused human rights since combat began in November 2020.

It was a report that not only angered federal government officials but also countries and experts that had already questioned the mission and real interests of the recently formed committee of experts.

“The report of the commission is prepared in defiance of the UN best practice guidelines such as professional independence, impartiality, and standard of proof,” said Tadesse Kassa (PhD), secretariat of the inter-ministerial taskforce that was formed by Prime Minister Abiy Ahmed, slamming the UN Commission of Human Rights Experts report of human rights violations in the northern Ethiopia war.

At a press conference held on September 21, 2022, he referred to the Commission’s initial report, which was created with only two full-time human rights investigators and remote interviews, as nothing more than mediocre. At the press conference, the Ministry of Justice unveiled the task force’s first phase report, which was prepared by 158 experts deployed in the conflict-affected Amhara and Afar regions.

In its first phase investigation report, which covers violations committed by the Tigray People’s Liberation Front (TPLF), the inter-ministerial taskforce (IMTF), formed to implement the recommendations of a joint investigation by the Ethiopian Human Rights Commission (EHRC) and the UN Office of the High Commissioner for Human Rights (OHCHR), presented its findings.

The Task Force found reasonable grounds to believe the commission’s findings that there were 2212 rapes, 2831 extrajudicial executions of civilians, and other violations during the war. According to its 46-page report, the team came to this conclusion after analyzing the testimonies of 10,000 witnesses and analyzing thousands of videos and material evidence.

For Tadesse, who has been monitoring the task force’s research and report-writing process, the UN Commission of Human Rights Experts’ report on Ethiopia is only a “snippet” of the full extent of the damage that has been inflicted throughout all three regions.

“The report’s conclusions are presented on the basis of either no evidence or evidence whose credibility is highly questionable,” the secretariat told the room full of reporters questioning the report in regard to its standard of proof and data collection. Tadesse even went on to call the report “a political statement” that was prepared to “help implement” the agendas of “some forces.”

This week, the commission accused all combatants in the conflict of committing various human rights crimes. In order to reach the conclusion that there are “reasonable grounds” to suspect that the offenses amounted to war crimes and crimes against humanity, the Commission listed incidents that it employed as a basis.

The selected incidents were the shelling of Mekelle and attacks on civilians and civilian objects; killings in Kobo and Chenna; and a drone strike on an Internally Displaced Persons (IDP) camp in Dedebit. Rape and sexual violence, and denial and obstruction of humanitarian access were also selected themes for the investigation.

The commission’s two-month investigation into selected incidents and themes found “reasonable grounds” to believe the Ethiopian National Defense Force (ENDF), Tigray forces, and Eritrean Defense Force (EDF) committed war crimes, according to the report. In this case, the report accused the ENDF of using “starvation of civilians as a method of warfare.”

It further stated that it found “reasonable grounds” to believe extrajudicial killings, rapes, and sexual violence were committed by ENDF members “as part of a widespread attack” directed against “the civilian population of Tigray.”

The accusations were part of a joint investigation by the Ethiopian Human Rights Commission (EHRC) and the UN Office of the High Commissioner for Human Rights (OHCHR) that was adopted by the federal government.

The federal government, on the other hand, blasted the commission’s report, adding that it had opposed its formation from the start. It described the report as “substandard quality” and its allegations as “unsubstantiated.”

“It makes grave accusations against the government and its armed forces without offering proof, just based on telephone conversations and web-based submissions. This is irresponsible,” Zenebe Kebede (Amb.), the Permanent Representative of Ethiopia, told Federico Villegas, Human Rights Council president, at the Interactive Dialogue with the commission on September 22, 2022, in Geneva, Switzerland.

As the commission was not allowed to go to the war-affected areas of northern Ethiopia to investigate by the federal government, all the 185 interviews with victims, survivors, witnesses, and other key interlocutors were conducted remotely, it said. Even the governments of Sudan and Djibouti haven’t granted the Commission access to interview Ethiopian refugees within their borders.

Authorities in Benishangul Gumuz Region are preparing a conflict recovery project that would need a 38.5 billion birr budget to be implemented. It is an initiative that arose as the security situation improving.

The plan is expected to be implemented in five years in three phases, with execution scheduled to begin next month.

The region’s sectoral bureaus will start adapting the plan and mobilizing resources based on their needs. The region is drafting a directive that will guide resource mobilization.

The required budget for the recovery plan is nearly six times the region’s 6.7 billion birr budget for the 2022/23 fiscal year.

“Non-governmental organizations and UN agencies have already expressed their interest in supporting the initiative,” Tarekegn Tasisa, the region’s disaster risk management commissioner, said.

The recovery and rehabilitation project, based on a study prepared by the region’s disaster risk management commission, will be implemented in the region’s 17 districts in the Metekel, Kamashi, and Asosa zones. The plan outlined a list of main activities that would be carried out in six sectors, including disaster risk management, agriculture and natural resources, health protection, and education.

The study for the plan was conducted using the regional government’s root-level apparatus. They have identified the extent of the damage, and the commission compiled it, according to the Tarekegn.

Besides the study carried out by the commission, another study is also being prepared led by Assosa University. The university’s study estimated that the region sustained 79.4 billion birr damage due to the conflicts in the past years.

The conflict has resulted in the loss of 16 million quintals of crop, valued at 44 billion birr, according to the study.

“The university’s study has already been presented to the regional government, but it’s not finalized yet. That’s why we are using what we studied. Ours is already ratified by the recovery steering committee,” the commissioner said.

Officials say the security situation in the region is improving now. The number of civilians killed in the past five months is at its lowest.

The region has been a place of horrific civilian killings and conflicts between government security forces and Gumuz rebels since 2019. While the Metekel and Kamashi zones are the main fighting grounds for the rebels, Metekel zone has seen killings targeted at ethnic Amharas.

Even though the region is rich in gold and coal mining resources, investors are not able to mine the reserves, especially in the Kamashi zone. The region ranked second in the country in terms of gold production, with artisans producing more than 90 percent of the region’s gold.

475,384 residents are displaced from their villages due to the insecurity in the region, of which 77,500 are children under the age of five, and 20,000 are breastfeeding mothers, according to the conflict impact assessment. The conflict is also a reason for the destruction of 43,640 houses.

The region, which has been witnessing conflict and the killing of innocent people in various places, saw 113,000 students are out of school due to instability. The destruction of schools has created a difficult situation for students to return to school. In the conflict-affected areas of the region, 201 schools were completely destroyed and 86 schools suffered partial damage.

The region’s 142 health facilities, including 126 health posts, have also sustained damage due to conflicts.

Benishangul Gumuz, which provides agricultural land to investors who engage in large scale farms, has had its 109 agricultural institutions’ warehouses looted and partially or completely destroyed.

The study showed that 291 farmer training institutes and 140 animal health facilities met the same fate.

The recovery and rehabilitation plan has prioritized the implementation of the return of internally displaced people and the rehabilitation of those people in their former homes in a sustainable manner. It also focuses on rebuilding social and economic institutions and providing the necessary equipment for the institutions.

The project need assessment showed that 38.5 billion birr will be needed to implement the plan in disaster risk management, agriculture and natural resources, health protection, education, water irrigation and energy resource development, women, children, and youth sectors, as well as peace building and security sectors.

“The cost of the recovery budget is so much higher than the region’s capacity. But we are planning to mobilize resources from diaspora communities that are from the region,” Tarekegn stated.

Funds from donors including the federal government and the World Bank recovery project are expected to be part of this project.

The Benishangul Gumuz region is one of the six regions, including Tigray, Amhara, and Afar, where rehabilitation project was launched by the federal government together with the World Bank this year. In May 2022, the bank signed a USD 300 million grant to assist the reconstruction, and the federal government has allocated 20 billion birr in the current fiscal year for reconstruction.

In areas that have security threats, the project will be implemented by a third party. The Ministry of Finance has delegated United Nations Office for Project Services (UNOPS) to implement the reconstruction in the Tigray region.

The Ministers of Health and Education studied the damage in all six regions and prepared a report detailing the cost of the five-year reconstruction project.

The Ministry of Education stated that USD 96.5 million is needed to recover from the damage to schools in the Benishangul Gumuz region, while the Ministry of Health stated that USD 22.35 million is needed to recover from the damage in the health sector of the region.

However, the question of equitable distribution of wealth is being raised in the reconstruction project of the federal government. The Boro Democratic Party, which shared power in the region’s government, blamed the federal government for not paying enough attention to reconstruction.

In a statement issued by the party a month ago, the party urged the federal government to pay attention and allocate resources to the replanting zone in the same way that attention and resources are allocated to the destruction and displacement of citizens in northern Ethiopia.

Yohannes Tesema, the party’s Political Sector head, believes the government is not giving enough attention to the recovery as much as it gives to the Amhara and Afar regions.

He claims that out of the USD 300 million granted by the World Bank, the amount of funds allocated for the Benishangul Gumuz region is small.

It says there is no military solution to this conflict

The US Department of State called on “Eritrea and others to cease fueling” the conflict in Ethiopia and urged Eritrea to withdraw its forces from Ethiopian borders. The department accused Eritrea of increasing tensions throughout the Horn of Africa region.

The US also called on “both the Government of Ethiopia and the Tigray regional authorities to halt immediately their military offensives and pursue a negotiated settlement through peace talks under the auspices of the African Union.”

At a press briefing on September 15, 2022, Ned Price, spokesperson of the US Department of State, stated that Ethiopia should look for a non-military solution to the conflict.

“We are increasingly concerned by the growing military activity in northern Ethiopia. We strongly condemn the resumption of hostilities. There is no military solution to this conflict. These actions are inconsistent with the government of Ethiopia and Tigrayan regional authorities’ stated willingness to go to talks,” Price said.

The US special envoy to the Horn of Africa, Mike Hammer, who is in Ethiopia over the week and canceled his expected press brief on Friday, is also advancing a similar position to secure a peaceful resolution to the third wave of war that resumed in Ethiopia on August 24, 2022.

The special envoy is reportedly making efforts to bring warring parties to the table, while Olusegun Obasanjo, the designated AU official to broker peace in Ethiopia, has been silent since the third wave of war broke out.

Both optimism and worry dominated the just-ended Ethiopian year. A year that began with aspirations for wider peace and stability in the nation ended with the resumption of another deadly conflict. In a war with no apparent end in sight, thousands of people are still dying in the highlands. The economy is still in a difficult situation after recovering a little in the last Ethiopian year, on the top of the stockpiled macroeconomic problems.

It was such a challenging year. In the last year, more than the year before, the effects of the one-year-old conflict was felt. This is especially true in terms of the economy. The cost of living remains high despite recent indications that inflation is slowing down nationwide.

“The government found it difficult to contain inflation and in the third quarter of the past fiscal year started to slow down the pace of depreciation of the national currency. Maybe this contributed to stabilize the inflation rate somewhat but it may also have contributed to foreign exchange shortage in the economy,” Patrick Heinisch, an economist said.

Some conflict-affected areas are experiencing a more than 1000 percent increase in commodity prices as a result of severe supply shortages. It is still a problem in the country’s north, particularly in Agew Zone, Tigray Region, and parts of Afar Region.

“Up until the resumption of the war, I was sending money to my family living in Tigray, paying 30 birr for every 100 birr I transfer,” said Kirubel, whose last name is withheld for security reasons. “For obvious reason, this is not something normal in a country with a sound economic condition.”

Kirbuel’s story is actually the tip of the iceberg. Just two months after the previous Ethiopian year began, Ahmed Shide, the Minister of Finance, was among the first to voice concerns about the status of the economy. In the same broadcasted speech on the state broadcaster in November 2021, his comrade Yinager Dessie, the governor of the National Bank of Ethiopia (NBE), did not conceal the fact that the economy was poised to collapse because of the war.

It didn’t take long for Prime Minister Abiy Ahmed (PhD) to react. While also paving the way for a negotiated settlement with the warring party in the North, the Tigray People’s Liberation Front (TPLF), which the Parliament designated as a terrorist organization, his administration declared a humanitarian truce. Humanitarian organizations had relatively easier access to provide food supplies to people in the war-torn region.

First, some progress was made in the effort to bring about peace. The economy showed signs of improvement, and the IMF, which had previously included Ethiopia on its list of nations with unpredictable and unstable economies, predicted that it would rebound. Soon after the ceasefire in North Ethiopia, the other Bretton Woods organization, the World Bank, similarly predicted Ethiopia’s economy would revive.

Though such encouraging developments helped the government rebuild its ties with the West and western financial institutions, they did little to prevent the country’s fundamental problem—the shortage of foreign currency. From approximately USD two billion to barely USD 290.7 million in loans, development partners and lenders cut their commitments.

The net inflow of external debt was negative USD 551 million, indicating that the amount of creditor loans disbursed was less than the principal amount of debt the government was servicing.

Businesses have also faced a financial crisis due to the forex shortage, a situation that has plagued them for decades, though some found last year to be their most difficult ever.

More than any other businesses, those involved in the water bottling industry felt the pinch. Twenty water bottlers had to shut down because they were no longer able to run their businesses due to a lack of inputs, and they had even reached a point where they were unable to pay their employees’ salaries.

Overall, access to foreign currency remains challenging for businesses. At the end of 2021, foreign exchange reserves stood at USD 1.6 billion, or 1.3 months’ worth of imports of goods and services.

The authorities tightened foreign exchange regulations numerous times over the previous fiscal year in response to the shortage, upping the percentage of foreign exchange companies’ must surrendered to the government (central bank) to 70 percent. Even exporters had to deal with the shortage because the restriction prevented them from using more than 20 percent of the foreign exchange they had earned.

Another major economic burden that persisted in the country last year was the widening budget deficit, made worse by the war in the North, which increased spending for military. The budget deficit widened and is now expected to exceed 300 billion birr this year, which is more than twice what it was in the just-ended fiscal year. These difficulties compelled the government to take desperate decisions, such as freezing loans or introducing new taxes, in an effort to increase revenue and narrow the mounting deficit.

However, not every problem can be solved.

For many workers in industrial parks, the suspension of Ethiopia from the African Growth Opportunity Act (AGOA), a trade benefit granted by the US to developing countries so they may export their goods without paying an import duty, has been a bad news.

Due to significant layoffs brought on by the suspension, more than five factories have left the park, and over 5,000 workers have lost their jobs as a result.

“The year has been tough for all workers in Ethiopia. From the inflationary pressure to the war that has made many jobless, they have been in a pickle. Some had to live in poverty since their salary is not enough to cover expenses,” said Kasahun Follo, president of Confederation of Ethiopian Trade Union (CETU), urging employers to consider the challenges and make adjustments in the coming New Year.

Although the amount of jobs created by industrial parks is relatively low compared to the agricultural sector, the country had planned to industrialize. For Heinisch, these efforts are now being thwarted.

“Worryingly, since 2019 the share of the industrial sector in GDP has actually decreased. The trend is likely to have continued in the past fiscal year,” he said.

Despite the difficulties last year, industries did well.

The export of industrial items reached a record-high USD 500 million in exports during the previous fiscal year. However, this is negligible in light of the development in the coffee industry, which generated USD 1.4 billion in revenue during the previous fiscal year. It is a success that has helped officials to record the nation’s record-high exports revenue, which exceeded the USD four billion mark during the previous fiscal year.

Despite some progresses, however, the overall economic condition seems to be in worst shape, according to economists.

“We have undertaken a study and discovered that the economy is not in a stable condition, which is indicated by the unpredictability of the exchange market, the fiscal policy and the forex market, adding to global-wide problems,” said Tewodros Mekonnen (PhD), an economist and a policy analyst.

Another economist, Mengistu Ketema (Prof.), also believes the economy had not been in a good condition last year.

“Inflation was growing, above 30 percent throughout the year. External debt are maturing, thus forcing the country to allocate more budget for debt servicing. The drought in the south also worsened the already tense situation. And when you add all these to the global economic challenges, including the war in Ukraine, it indicates the economy is between a rock and a hard place,” Mengistu said.

For Heinisch, who believes Ethiopia did not experience a “post-COVID” recovery in 2021/2022 as many other countries did, the outlook is more benign, assuming that the war that has broken out again will come to an end quickly and the country can focus on its economic reforms again. “Debt restructuring could free up resources that the country needs for reconstruction but also new investment projects. So there is still reason for hope,” Heinisch concluded.

Both optimism and worry dominated the just-ended Ethiopian year. A year that began with aspirations for wider peace and stability in the nation ended with the resumption of another deadly conflict. In a war with no apparent end in sight, thousands of people are still dying in the highlands. The economy is still in a difficult situation after recovering a little in the last Ethiopian year, on the top of the stockpiled macroeconomic problems.

It was such a challenging year. In the last year, more than the year before, the effects of the one-year-old conflict was felt. This is especially true in terms of the economy. The cost of living remains high despite recent indications that inflation is slowing down nationwide.

“The government found it difficult to contain inflation and in the third quarter of the past fiscal year started to slow down the pace of depreciation of the national currency. Maybe this contributed to stabilize the inflation rate somewhat but it may also have contributed to foreign exchange shortage in the economy,” Patrick Heinisch, an economist said.

Some conflict-affected areas are experiencing a more than 1000 percent increase in commodity prices as a result of severe supply shortages. It is still a problem in the country’s north, particularly in Agew Zone, Tigray Region, and parts of Afar Region.

“Up until the resumption of the war, I was sending money to my family living in Tigray, paying 30 birr for every 100 birr I transfer,” said Kirubel, whose last name is withheld for security reasons. “For obvious reason, this is not something normal in a country with a sound economic condition.”

Kirbuel’s story is actually the tip of the iceberg. Just two months after the previous Ethiopian year began, Ahmed Shide, the Minister of Finance, was among the first to voice concerns about the status of the economy. In the same broadcasted speech on the state broadcaster in November 2021, his comrade Yinager Dessie, the governor of the National Bank of Ethiopia (NBE), did not conceal the fact that the economy was poised to collapse because of the war.

It didn’t take long for Prime Minister Abiy Ahmed (PhD) to react. While also paving the way for a negotiated settlement with the warring party in the North, the Tigray People’s Liberation Front (TPLF), which the Parliament designated as a terrorist organization, his administration declared a humanitarian truce. Humanitarian organizations had relatively easier access to provide food supplies to people in the war-torn region.

First, some progress was made in the effort to bring about peace. The economy showed signs of improvement, and the IMF, which had previously included Ethiopia on its list of nations with unpredictable and unstable economies, predicted that it would rebound. Soon after the ceasefire in North Ethiopia, the other Bretton Woods organization, the World Bank, similarly predicted Ethiopia’s economy would revive.

Though such encouraging developments helped the government rebuild its ties with the West and western financial institutions, they did little to prevent the country’s fundamental problem—the shortage of foreign currency. From approximately USD two billion to barely USD 290.7 million in loans, development partners and lenders cut their commitments.

The net inflow of external debt was negative USD 551 million, indicating that the amount of creditor loans disbursed was less than the principal amount of debt the government was servicing.

Businesses have also faced a financial crisis due to the forex shortage, a situation that has plagued them for decades, though some found last year to be their most difficult ever.

More than any other businesses, those involved in the water bottling industry felt the pinch. Twenty water bottlers had to shut down because they were no longer able to run their businesses due to a lack of inputs, and they had even reached a point where they were unable to pay their employees’ salaries.

Overall, access to foreign currency remains challenging for businesses. At the end of 2021, foreign exchange reserves stood at USD 1.6 billion, or 1.3 months’ worth of imports of goods and services.

The authorities tightened foreign exchange regulations numerous times over the previous fiscal year in response to the shortage, upping the percentage of foreign exchange companies’ must surrendered to the government (central bank) to 70 percent. Even exporters had to deal with the shortage because the restriction prevented them from using more than 20 percent of the foreign exchange they had earned.

Another major economic burden that persisted in the country last year was the widening budget deficit, made worse by the war in the North, which increased spending for military. The budget deficit widened and is now expected to exceed 300 billion birr this year, which is more than twice what it was in the just-ended fiscal year. These difficulties compelled the government to take desperate decisions, such as freezing loans or introducing new taxes, in an effort to increase revenue and narrow the mounting deficit.

However, not every problem can be solved.

For many workers in industrial parks, the suspension of Ethiopia from the African Growth Opportunity Act (AGOA), a trade benefit granted by the US to developing countries so they may export their goods without paying an import duty, has been a bad news.

Due to significant layoffs brought on by the suspension, more than five factories have left the park, and over 5,000 workers have lost their jobs as a result.

“The year has been tough for all workers in Ethiopia. From the inflationary pressure to the war that has made many jobless, they have been in a pickle. Some had to live in poverty since their salary is not enough to cover expenses,” said Kasahun Follo, president of Confederation of Ethiopian Trade Union (CETU), urging employers to consider the challenges and make adjustments in the coming New Year.

Although the amount of jobs created by industrial parks is relatively low compared to the agricultural sector, the country had planned to industrialize. For Heinisch, these efforts are now being thwarted.

“Worryingly, since 2019 the share of the industrial sector in GDP has actually decreased. The trend is likely to have continued in the past fiscal year,” he said.

Despite the difficulties last year, industries did well.

The export of industrial items reached a record-high USD 500 million in exports during the previous fiscal year. However, this is negligible in light of the development in the coffee industry, which generated USD 1.4 billion in revenue during the previous fiscal year. It is a success that has helped officials to record the nation’s record-high exports revenue, which exceeded the USD four billion mark during the previous fiscal year.

Despite some progresses, however, the overall economic condition seems to be in worst shape, according to economists.

“We have undertaken a study and discovered that the economy is not in a stable condition, which is indicated by the unpredictability of the exchange market, the fiscal policy and the forex market, adding to global-wide problems,” said Tewodros Mekonnen (PhD), an economist and a policy analyst.

Another economist, Mengistu Ketema (Prof.), also believes the economy had not been in a good condition last year.

“Inflation was growing, above 30 percent throughout the year. External debt are maturing, thus forcing the country to allocate more budget for debt servicing. The drought in the south also worsened the already tense situation. And when you add all these to the global economic challenges, including the war in Ukraine, it indicates the economy is between a rock and a hard place,” Mengistu said.

For Heinisch, who believes Ethiopia did not experience a “post-COVID” recovery in 2021/2022 as many other countries did, the outlook is more benign, assuming that the war that has broken out again will come to an end quickly and the country can focus on its economic reforms again. “Debt restructuring could free up resources that the country needs for reconstruction but also new investment projects. So there is still reason for hope,” Heinisch concluded.

The envoy is wrapping up two weeks in the Horn region.

“He remained actively engaged with the Government of Ethiopia, with the Tigray regional authorities, with the African Union, and with international partners to seek to advance an important effort to bring peace. He met on September 12 with the AU’s high representative, Obasanjo,” stated Price.

On September 16, 2022, the US embassy in Addis Ababa also stated that Hammer held productive meetings with Ethiopian government officials, civil society representatives, the African Union, and international partners.

Moussa Faki, the AUC chairperson, who extended Obasanjo’s mandate on September 10, 2022 to continue engaging with warring parties in Ethiopia, also met with Hammer on the next day. On the other hand, the UN Security Council, which was set to discuss the situation in Ethiopia, was postponed.

The five months of ceasefire and humanitarian assistance to Tigray were shattered when the third wave of war broke out on August 24, 2022. The ongoing peace initiative under the AU umbrella hit a deadlock, which the special envoy is trying to reactivate.

The Tigray regional government, which has been refuting AU-led peace negotiations prior to the latest war, also issued a statement on September 11, 2022, agreeing to negotiate under the AU umbrella.

Nonetheless, reaching a ceasefire agreement and resuming the peace talks remains farfetched, worsening the humanitarian crisis, as Eritrean forces are reportedly drawn into the war and regionalizing the conflict.

“These actions are worsening the humanitarian situation at a time of pronounced drought and food insecurity,” stated Price.

He called on the government of Ethiopia, Tigrayan authorities, and all parties to allow the unhindered delivery of humanitarian relief.

“Humanitarian assistance should not be used for military purposes—it should be used to save lives. And we urge the parties to cease the fighting and to begin talks under the auspices of the AU as soon as possible. Peace needs to be given a chance. Too many people have died, and too many more are suffering,” he added.

“Our region doesn’t have the capacity to mobilize this amount of budget for the recovery. It definitely needs the federal government’s support more than this,” he asserted.

The commission’s requests to various UN entities operating in Ethiopia to share documents and materials of interest were largely deflected, or responded to after an inordinate delay. Its request to access the internal database of the joint investigation team was also delayed.

“Despite these challenges, the Commission is confident that its findings are supported by information that satisfies the standard of proof for UN investigations,” the report reads.

The commission’s recommendation, which asks the UN Security Council (UNSC) to include the war in northern Ethiopia on its agenda for the 14th time since December 2020, worries the Ethiopian government more than the report’s findings and conclusions do.

In order to stop further violations and abuses of international human rights law and humanitarian laws, it also calls on the council to take action targeted at restoring peace, stability, and security in the area. During a session held this week, officials of the federal government have already expressed their resentment at the recommendation of the commission.

“The Commission’s political pronouncements referring to the UN Security Council are ultra-virulent and betray political motivations that go beyond human rights,” Zenebe said.

It is a sentiment shared by countries that are members of the Human Rights Council.

“The Commission went beyond its mandate and made a statement on things that were not in its remit,” said Konan François, a representative of Côte d’Ivoire on behalf of a group of African States.

Wondemagegn Tadesse (PhD), an international human rights lecturer at Addis Ababa University, believes there are three options in which the UN Human Rights Council can decide to approve the commission’s report and recommendations. The first option is to end the matter within the council itself.

“In this case, there will be nothing more to do than call on the warring parties in the country to implement these recommendations,” Wondemagegn explained.

The second option is to refer the matter to the UN General Assembly. “However, since the assembly gathers over a long period of time, it may not have a big impact on Ethiopia,” he added.

Apart from that, even if it is presented to the General Assembly, its voting system does not have veto power, so there is a high possibility that it will not be approved. A large number of developing countries at the General Assembly will not vote in favor of the resolution as they consider such decisions as interference, according to Wondemagegn. Moreover, experience so far shows that if the country in which the decision is made does not accept the decision, the chances of its implementation are low.

However, if issues are referred to the UNSC, the third option may take a different path than the two options.

“The Security Council is the only institution that has the power to take military action among the UN institutions, but as we always see, the proposal to the Council is overturned by the veto power, so it does not make a difference,” Wendmagegn asserted.

In the past two years, the council has not passed any decisions on Ethiopia. The war in northern Ethiopia and the Great Ethiopian Renaissance Dam have been on the agenda tabled before its members for discussion. When a resolution was proposed, China and Russia, who have veto power, supported Ethiopia.

For Wondemagegn, even if the Security Council passes a resolution, it is difficult to implement it. If the Council decides to send troops to stop human rights abuses, there may not be many countries to contribute troops to a country as large as Ethiopia.

“Even if countries contribute soldiers and send them to Ethiopia, they will have to fight a war with Ethiopia because the Ethiopian government will not accept the decision. No one wants this,” he said.

Another human rights expert, who asked not to be named, explained that even if the UN Human Rights Council does not pass any decision as a result of this report, countries that want to take unilateral action can use it as a cause for their measures.

“Those like the US and the EU may use the report to suspend loans and impose sanctions,” the expert said, adding, “but this would only hurt the people affected by the war more.”

The Ethiopian Human Rights Commission also agrees with this idea.

“Decisions should be made to reward the people affected by the war and bring reconciliation, not where parties with differences of opinion are dragged into a corner,” said the Deputy Chief Commissioner for Human Rights, Rakeb Melesel, while underscoring that EHRC is ready to share its database if the Commission is willing to undertake another investigation.

The Ethiopian government is exerting pressure to block any attempts by the Commission to extend its mandate. “The Council should reject the report and oppose any attempt to extend the mandate of this Commission beyond December 2022,” the government emphasized.

Farmers reject the much-anticipated Bt cotton.

Cotton growers in Ethiopia resort to unauthorized GMO cotton illegally smuggled from Sudan. Bt-RR cotton seed is currently being cultivated in Afar, Metema, Benishangul Gumuz and Gambella regions after being smuggled via Metema, Humera and other border areas between Sudan and Ethiopia.

Once the first generation of open-pollinated (OT) is acquired, it can be sown for between three and five years, after which the seed cannot be recycled. Ethiopian cotton farmers are currently buying the smuggled cotton seeds and multiplying them locally at 10,000 birr to 13,000 birr per quintal.

Bt-RR originated in Brazil, and was largely cultivated in Sudan. Most other GM cotton seeds are non-OT, which means they cannot be used after the first year. As a result, the farmer has to buy the seed every year.

The cotton farmers The Reporter talked to underlined that the smuggled cotton seed is preferred mainly because it resists bollworm, which has been devastating the existing local cotton breeds. This is because a one-time chemical spray on the vegetation is also highly effective in eliminating all weeds except the cotton itself.

The productivity of the Bt-RR is between 10 and 14 quintals per hectare, slightly superior to the local varieties. But the Bt-RR is advantageous mainly because it beats the bollworm, and requires less pesticide.

“A number of farmers are now multiplying the Bt-RR seed and selling it to cotton farmers across the country. The farmer liked the seed, instead of the local existing varieties and the GM cotton approved by the government,” said a manager of a large-scale cotton farming company. He cultivated the new seed on 200 hectares in Amhara regional state.

Melkamu Telake, board chair of the Ethiopian Cotton Producers, Ginners, and Exporters Association, says farmers are resorting to smuggled seed as access to other cotton seeds depletes. “The government failed to provide the type of seed preferred by the farmer.”

After the Parliament legislated the GMO proclamation in 2015, the Biosafety and Invasive Alien Species Follow-up and Control directorate at the Environmental Protection Authority (EPA) and EIAR commercialized Bt cotton for the first time in 2019.

However, a number of commercial cotton farmers in Gambella have tried Bt cotton and lost interest after the first year. The first reason was that the authorized Bt cotton could not effectively resist the bollworm.

The other major reason was that the authorized Bt cotton, which is imported from India, is expensive costing USD 28 per kilo. As a result, the EIAR picked Indian-based JK Agri Genetics Ltd. to open a subsidiary company in Ethiopia and multiply the seeds in Ethiopia to avoid the forex problem required to import the seeds annually. However, this plan also bore no fruit, as the Ethiopian farmers rejected the authorized Bt cotton.

“All the cotton farmers in Ethiopia are boycotting the authorized Bt cotton. It did not effectively resist the bollworm. It necessitates the repeated application of insecticides and pesticides. We have to buy the seeds every year at an expensive price. Plus, our farmers lack the technology required to cultivate the authorized Bt cotton with the right agronomical practices. So the farmers are resorting to the smuggled variety, instead,” said Melkamu.

Mesele Mekuria, Cotton Development Director at the Ethiopian Textile Industry Development Center, also said the authorized Bt cotton did not work.

The productivity of existing cotton seeds in Ethiopia, which are Ggedera and DP90, dropped, especially after the varieties were in use for over 30 years and were unable to resist diseases. Currently, rain-based farming of traditional seeds offer anywhere between eight quintals and 28 quintals per hectare.

However, if irrigation is coupled with precise agronomical practice, the local seeds can offer between 45 quintal and 54 quintals per hectare, according to Melkamu.

“Big cotton farmers like Lucy in Afar, and other farmers in Arbaminch have achieved this level of productivity. But there are certain interest groups who are trying to enforce certain Bt cotton on Ethiopia. We need GMO cotton only after we achieve maximum productivity with the existing local varieties,” Melkamu said.

These interest groups, according to him, do not want the local varieties. “Global GMO patent holders are behind these interest groups. Once we start using such GMO varieties, we will be their slaves because the existing local varieties will be ousted in five years and we have to buy their seed every year.”

Yet, other cotton farmers argue that the EIAR has to take samples of the Bt-RR that are smuggled from Sudan, study them, and approve them for Ethiopian farmers.

The meager productivity of local cotton farming has been the Achilles heel for Ethiopia’s aspirations to become the manufacturing hub of Africa, mainly capitalizing on textiles, garments, and apparel.

Damage to health and education infrastructure in six regions of Ethiopia resulting from conflicts need a USD 3.6 billion recovery budget, according to a new Recovery and Rehabilitation Plan document released by the Ministries of Health and Education.

The ministries outlined an intervention plan for the five-year rehabilitation project that will be implemented in three phases. The recovery intervention plan is part of the “Response – Recovery – Resilience” project launched by the Ministry of Finance in March 2022.

The ministries assessed the damage that occurred in Tigray, Afar, Amhara, Benishangul-Gumuz, Oromia, and Konso zones of the Southern Nations Nationalities and People’s (SNNP) regions. The assessment and recovery plan were prepared by the government, with a technical assistance from the World Bank.

Education suffered the most harm. According to the recovery plan, the sector requires USD 2.2 billion to recoup lost learning and rebuild destroyed facilities.

The Ministry of Health’s plan proposed a USD 1.4 billion intervention.

As the assessment shows, the conflict destroyed 2,681 schools completely and another 4,158 schools partially in these regions. 38 Technical and Vocational Education and Training (TVET) institutions and three universities have also sustained varying levels of damage. The number of destroyed TVETs and universities in the Tigray region is not included due to a lack of data.

This destruction of the education sector has affected more than 4.2 million learners and close to 200,000 teachers and education staff, the report reads.

The number of people affected by the damage to the health sector is estimated to be close to 24 million people. The people in conflict-affected area have been “adversely impacted.”

The assessment showed that 3,217 health posts, 709 health centers, and 76 hospitals were partially or completely damaged in the six conflict-affected regions.

Among the six regions that were affected, the Amhara region suffered the most damage to the sectors. Out of the 3,217 health facilities that sustained damage, 69 percent of them are found in the Amhara region. Furthermore, out of 248 ambulances that were damaged or looted, 50 percent were in the region.

The region’s 4,020 schools have also been destroyed, accounting for 58.7 percent of the total damage across all six areas.

However, given the region’s penetration of health institutions, the damage to health facilities in Tigray is substantially greater. 82.9 percent of the region’s hospitals have been damaged. The same fate has befallen Tigray’s 76 percent of health posts and 50 percent of health centers.

In the health sector, out of the overall estimated recovery cost, USD 1.4 billion, the largest share, USD 501.19 million, is for health centers. General and specialized hospitals follow at a cost of USD 342.54 million.

In the education sector, USD 1.36 billion is planned to recover damaged primary and secondary schools in the six regions.

The recovery and reconstruction program will be implemented for five years in three phases, according to the documents prepared by the ministries. The program’s early recovery phase needs will be met within the first six months. Short-term demands range from six to 24 months, whereas medium-term needs range from three to five years.

According to the ministry’s Stakeholder Engagement Plan document, the implementation of the program will be led by a Federal Project Coordination Unit (FPCU) in the Ministry of Finance. Various sectoral ministries and other mandated offices are responsible for the implementation of the program.

In the Tigray region, where the ministries have no access, the recovery project is planned to be implemented by a third party. The Ministry of Finance signed a third-party implementation agreement with the United Nations Office for Project Services (UNOPS) last month.

The World Bank granted USD 300 million in May for the implementation of this project. While the government, which has just begun its fiscal year, has allocated 20 billion birr.

Abiy Ahmed’s (PhD) time as Ethiopia’s prime minister is not without difficulties. He even called himself “a Prime Minister with no time to even undergo a medical checkup” in front of lawmakers. Since taking over after Hailemariam Desalegn’s departure, Abiy has ruled a nation that has been plagued by economic distress, political unrest, and even a civil war that has lasted for more than a year. On top of the never-ending problems he dealt with, with most of the incidents occurring in the northern part of the country, there was another heavy task that challenged his leadership. That is the statehood question brought by ethnic groups living in the south.

A few months after taking office, Abiy was inundated with requests from the leaders of more than a dozen zones and woredas, placing pressure on his government to help them realize their desire for a regional state. Participation in the endeavor to achieve statehood recognition ranged from low-level bureaucrats to zonal leaders and officials in the federal government. Ten zones filed a resolution with the House of Federation (HoF) adopted by their separate councils to hold a referendum on statehood. Abiy was aware right away how urgent it was to fulfill the regions’ desire.

Soon after taking office, Abiy traveled to almost all of the South Region’s ethnically divided zones. It was an attempt to win political support as he rushed to replace the Ethiopian Peoples’ Revolutionary Democratic Front (EPRDF) at the time and establish the ruling Prosperity Party. But his administration’s stance on their desire for statehood was the main topic that dominated the debates at the zones. He promised to respond to their request, which by all legal criteria is legitimate.

However, it was easier said than done to keep the pledge. Sidama was the first regional state to be established following a referendum, with 98 percent of voters supporting the establishment of a new regional state. But civilians paid a price for the government’s efforts to push through Sidama’s desire for statehood, as enraged protesters set fire to the homes of many Hawassa inhabitants and forcibly evicted many others.

In particular, ethnic Amharas were targeted in all incidents involving statehood questions across the South Region. The Attorney General recently released a report that the homes of ethnic Amharas were burned to ashes, which led to the arrest of dozens of people on suspicion of being involved in the violence.

It appears the government understood the consequences of ignoring statehood questions were brought by Ethiopians to the south. Abiy formed a team of experts and high-level government officials two years ago to launch a study on the issue after realizing the consequences of disregarding statehood requests.

The team sent out three recommendations. The first option is to maintain the South Nation, Nationalities and People’s Regional State in its present configuration while making changes to the region’s appropriate number of political seats. The second suggestion was to establish the Sidama region while keeping other ethnic groups as members of the SNNPR. The third involved splitting the region into five, clustering the ethnic groups together.

The third alternative seems to be what the federal administration chose after the first two became unworkable due to rising animosity among ethnic group elites in South Ethiopia.

“I think it’s a step in the right direction, but caution should be exercised to avoid making the same mistake as SNNPR, which is now being dismantled due to growing resentment over resource sharing, political participation, and infrastructure development,” said Keyredin Tezera, assistant professor of Social Anthropology who participated in the study carried out at the request of the federal government.

Following Sidama’s victory for independence from the SNNPR, Kaffa, Sheka, Bench Sheko, Dawuro, and West Omo Zones, as well as the Konta Special District, joined to form the South West Region through a referendum. The local council members of five special Woredas – Amaro, Ale, Basketo, Burji, and Derashe – as well as the Konso, Gedeo, Gamo, Gofa, South Omo, and Wolayta zones voted last week to restructure their administrative units into a newly established regional state.

In a similar fashion, members of the Hadiya, Halaba, Kembata Tmbaro, Silte, and Yem Special Woreda local councils have begun the process of creating a new regional state. However, activists and political organizations active in the zones contested the action.

The Gurghe people, with whom the federal government wants to construct a cluster along with Hadiya, Silte, Kembata, Silte, and Yem, are among those who have objected to the concept of forming regions in clusters. The Guraghe zone has a population of approximately six million people and a land area of approximately 5932 sq.km. Its council was one of the zones that submitted a request to hold a vote on becoming a separate region.

Social activist, Misbah Kedir, is one of the ethnic Guraghes who have contested the federal government’s proposal to partition SNNPR into five cluster areas. He thinks it is wrong for the central government to “forcefully” incorporate the Guraghe Zone into the cluster.

“In addition to Guraghes, other zones that had voted to create a cluster region had also supported the motion after receiving an order from the federal government,” said Misbah.

Wolayita’s opposition wants to be heard too.

“First and foremost, the council, whether in Wolayita or other zones, does not have the power to accept such a resolution on behalf of the people because their term period ended almost seven years ago. Second, this is something that the cadres, not the people, want,” said Amanuel Mogiso, leader of the opposition Wolayita National Movement, which is active in Wolayita Zone.

Amanuel exhorts the federal government to pay attention to what the people want, comparing the situation to sitting on a ticking time bomb. “The Wolayita people have peacefully expressed a desire for their own territory. They need to be heard,” he added.

The politician urges the federal government to avoid meddling and let ethnic communities in SNNPR, including Wolayita, exercise their constitutional rights. “To reject their right to have their own regional state is unlawful,” Amanuel continued.

Jember Abdo, a legal expert, agrees.

“The state is turning into an enabler of violence. In the case of Guraghe, this is what I saw. The people exercised their right to form a region but the federal government’s response was to militarize their hometown,” Jember said urging the federal government to uphold the constitution.

There are economic reasons driving the pursuit of statehood.

“In order to obtain a permit from SNNPR officials, farmers and businessmen must travel hundreds of kilometers from distant areas in the Guraghe zone to Hawassa. And after the cluster region is established, they might be required to follow suit in order to obtain a permit from Hossana, which will likely serve as the cluster region’s capital city,” Misbah said.

Amanuel is worried too.

“The political structure is to blame for the underdevelopment of zones. When you have a significant budget and tax in a region, it is not the same,” Amanuel concluded.

Regardless of the final outcome of the campaign to achieve statehood for Ethiopians in the South, there are still many unknowns about the future of the region, which will depend on the government’s decision on how to manage the grievances of the ethnic groups it intends to organize into a cluster region.

Sergey Lavrov, Russia’s Foreign Minister, affirmed that his country is in favor of giving Africa a permanent seat in the UN Security Council. The Foreign Minister also concurred with Ethiopian officials that the Security Council should undergo reform in a bid to take into account the current state of the world.

Lavrov arrived in Addis Ababa on July 26, 2022 for a two-day trip, where he met President Sahlework Zewde; Demeke Mekonen, deputy prime minister and foreign minister, and other high officials. Lavrov also traveled to Egypt, Congo, and Uganda, before wrapping up his Africa trip by conferring with the diplomatic community at the AU headquarters.

“Ethiopia and Russia share similar stances on issues on the global and regional agenda. These approaches rely on adherence to international law, particularly the tenets of the UN charter and the respect for the sovereign rights of states,” said Lavrov.

During the 35^th ordinary session of the AU summit in February 2022, PM Abiy Ahmed (PhD) exceptionally raised the urgent topic of reforming the UN and securing a permanent seat for Africa in the UNSC.

As a result, the AU passed a resolution that requests “full representation of Africa in the United Nations Security Council, including not less than two permanent seats in the United Nations Security Council with all the prerogatives and privileges of permanent membership, including the right of veto.

The AU also proceeded to request the Committee of Ten Heads of State and Government to continue to intensify its engagement at the highest level with other interested and regional groups and key stakeholders, including the five permanent members of the UN Security Council, with a view to building on progress made in advancing, canvassing and promoting the Common African Position.

The AU’s quest for reform of the UN began in 2005 when African states approved the Ezulwini consensus and Sirte Declaration on the Reform of United Nations Security Council.

In 2010, President Goodluck Jonathan of Nigeria, told the UN General Assembly, “The exclusion of Africa from the permanent member category of the Security Council can no longer be justified. We urge the UN to quicken the pace of its reforms. Not only to better reflect the current global realities but also to ensure that it enjoys genuine legitimacy.”

Africa does not have a proportional representation in the global body.However, the consideration has become critical, as Africa is frequently impacted by decisions over which it has no say.

In particular, both Ethiopia and Russia have been haunted by the UNSC particularly since last year. In the past year, the UNSC discussed sanctioning Ethiopia in relation to human rights violations in the Tigray war. However, the considerations were vetoed by Russia and China. Ethiopia also paid back by refraining from voting, when the UNSC introduced emergency voting in March 2022 to condemn Russia’s invasion of Ukraine.

Demeke appreciated Russia’s “unwavering support during difficult times of need, particularly in the recent struggle to safeguard Ethiopia’s sovereignty.’

The major purpose of Lavrov’s trip to Africa, amidst a propaganda war with the west, is also to secure Africa’s support in similar UN voting scenarios in the future.

Gaining a permanent seat on the UN Security Council will position Africa as a balancing force between the power struggles of the east and west, as well as the rapidly changing global geopolitics. However, reforming the western-dominated organization might not be easy, according to scholars. But once the UN begins processing the AU’s request, Russia and China can play a decisive role in making Africa earn its place in the UN structure.

Over 60,000 foreigners have registered so far

Ethiopia’s Ministry of Foreign Affairs urged foreigners with expired visas and resident permits to get registered in 125 selected areas of registration established for this purpose.

Speaking at a press conference on Thursday, Ministry Spokesperson Meles Alem (Ambassador) has urged all foreign nationals living in Ethiopia without proper documents to be registered immediately before authorities start to take legal action as per the international law Ethiopia has signed.

Foreigners without any visa or residence permit, as well as refugees or asylum seekers requesting status and residing in Addis Ababa and its vicinities with or without an urban refugee permit, are also requested to register as of July 25, 2022.

According to Meles, within the last five days of the official announcement for registration, over 60,000 people have registered from countries including Canada, America, Eritrea, Congo, Italy, Syria, China, Turkey, Ghana, Burundi, Liberia, India, Bangladesh, South Sudan, and other countries.

The first phase of registration sites is installed in Addis Ababa and some Oromia administrative zones, and the second round of registration will be opened soon in regional states and the Dire Dawa City administration, the spokesperson told the reporter.

Registration is conducted under the auspices of the Immigration and Citizenship Service, through the Vital Events Registration Offices of all Woredas and the Immigration and Citizenship Service, as per its mandate given by a proclamation to register and administer legal permits for foreign nationals living in Ethiopia.

“We have started this to make sure that immigration work is proceeding as per the legal procedures,” said Meles (Ambassador), adding that there is no further intention of expelling or any other form of stunt.

The spokesperson has further called on foreigners to take advantage of this chance before officials start to take legal measures against those who failed to register as per the rule. However, the formal registration process will not be applied to the diplomatic community.

Over 180,000 foreigners are expected to be registered in Addis Ababa, Meles added.

In a similar presser, the spokesperson announced the cancellation of 162 million US dollars of rolling debt by the Russian government, which Ethiopia has borrowed since the Soviet Union period. According to Meles, Russia has changed the modality from debt to a development grant for purposes of modernizing the Melka Wakana Hydroelectric Power Station and upgrading Balcha Hospital’s technical capabilities.

Over 60,000 foreigners have registered so far

Ethiopia’s Ministry of Foreign Affairs urged foreigners with expired visas and resident permits to get registered in 125 selected areas of registration established for this purpose.

Speaking at a press conference on Thursday, Ministry Spokesperson Meles Alem (Ambassador) has urged all foreign nationals living in Ethiopia without proper documents to be registered immediately before authorities start to take legal action as per the international law Ethiopia has signed.

Foreigners without any visa or residence permit, as well as refugees or asylum seekers requesting status and residing in Addis Ababa and its vicinities with or without an urban refugee permit, are also requested to register as of July 25, 2022.

According to Meles, within the last five days of the official announcement for registration, over 60,000 people have registered from countries including Canada, America, Eritrea, Congo, Italy, Syria, China, Turkey, Ghana, Burundi, Liberia, India, Bangladesh, South Sudan, and other countries.

The first phase of registration sites is installed in Addis Ababa and some Oromia administrative zones, and the second round of registration will be opened soon in regional states and the Dire Dawa City administration, the spokesperson told the reporter.

Registration is conducted under the auspices of the Immigration and Citizenship Service, through the Vital Events Registration Offices of all Woredas and the Immigration and Citizenship Service, as per its mandate given by a proclamation to register and administer legal permits for foreign nationals living in Ethiopia.

“We have started this to make sure that immigration work is proceeding as per the legal procedures,” said Meles (Ambassador), adding that there is no further intention of expelling or any other form of stunt.

The spokesperson has further called on foreigners to take advantage of this chance before officials start to take legal measures against those who failed to register as per the rule. However, the formal registration process will not be applied to the diplomatic community.

Over 180,000 foreigners are expected to be registered in Addis Ababa, Meles added.

In a similar presser, the spokesperson announced the cancellation of 162 million US dollars of rolling debt by the Russian government, which Ethiopia has borrowed since the Soviet Union period. According to Meles, Russia has changed the modality from debt to a development grant for purposes of modernizing the Melka Wakana Hydroelectric Power Station and upgrading Balcha Hospital’s technical capabilities.

Special Forces of Somali regional state and a coalition of other regional and federal security forces have conducted an all-out counter attack to purge Al-shabab fighters that entered Ethiopia’s borders on Friday. The regional government deployed hundreds of Special Forces to conduct the operation.

“A number of Al-shabab fighters entered the Ethiopian border, after they conducted an attack at a time nobody expected. They first engaged with Somali Special Forces. And heavy casualties occurred on both sides. But we are clearing them out,” said an official in the regional government, who spoke to The Reporter requesting to remain anonymity since the federal government is also involved and information is to be disseminated from the center.

“We have also captured their fighters, and the operation will continue until they are cleared out from the area,” added the official.

The terror group first attacked two border towns in Somalia’s side on July 20, 2022, on the same day Somali regional state officials convened to evaluate its security forces performance.

After the first clash at Yeed and Aato towns in Ethio-Somalia border, the militants reportedly killed twenty Ethiopian forces including three civilians. The group lost 63 of its own.

The al-Qaeda linked group tried to enter Ethiopia through Afder zone in southern part of Somali region.

Apart from a strong presence by Ethiopian forces in the border areas, Ethiopia also deployed close to 4,000 troops in Somalia under the AU Transition Mission in Somalia (ATMIS), a reconfigured version of the former AU Mission in Somalia (AMISOM). Ethiopian troops maintain a stronghold in Baidowa.

However insiders question why Al-shabab is attacking Ethiopia at this moment.

“The attack is intended to divert the attention of Ethiopia. Al-shabab is conducting the attacks in coordination with the TPLF and other insurgents in Ethiopia,” said a security expert who focuses on Al-shabab.

Other insiders also link the rising Al-shabab attacks with the instability in Ethiopia. The restructuring of AMISOM and controversies shadowing the continuity of ATMIS, is also contributing to Al-shabab’s resurrection.

Over the past few months, Al-shabab’s attacks have evolved from suicide bombings to attacking military bases in Somalia, including an AU military base. Experts stress that the group is gaining momentum as Horn of Africa countries are occupied with domestic conflicts and the EU, the largest financer of AMISOM/ATMIS, is backtracking.

A few weeks ago, the newly elected Somalia President, Hassan Sheikh Mohamud said negotiations should be considered with Al-shabab, a rare gesture, which is becoming almost a shadow state.

However, the militant group in a statement said it fights to establish an Islamic state in the Horn.

In a continued conflict in West Wollega Zone, over 1,105 civilians are killed this year, including 28 officials who were shot in one day. The zone has also lost properties worth over three billion birr to extended conflict during the just ended fiscal year.

Reports of the devastating impact of the conflict presented to the Caffee Oromia, council of the Oromia regional state, which held its annual meeting over the week. Gammachis Dabala, administrator of West Wollega zone, told the council that both ethnic Amhara and Oromo are killed in his zone.

The regional government has repeatedly launched operation to eradicate the Oromo Liberation Front (OLF-Shene) group, which designated terrorist by the House of Peoples Representative (HPR) and still maintaining West Oromia as its stronghold. During the last month alone, the group has killed hundreds of civilians, according to Ethiopian Human Rights Commission (EHRC) reports. PM Abiy Ahmed called it “a massacre.”

Most of the zones of Oromia are currently under threats of the insurgent group, according to official reports. Loss of life, property damages, and closure of schools are also tolling across the regional state. In North Shewa alone, some 195 schools remain closed, while over 75,000 students were out of school, according to the report presented during the Caffee meeting.

Taye Dendea, member of the Oromia Prosperity party and state minister of Peace, was at dismay after attending the Caffee meeting. “Last year, only few woredas of Oromia were affected by conflict. Currently, eight zones of Oromia have security threats. We failed the people that elected us just last year. The Oromia Regional Government failed to fulfill its duty to protect the civilians. The damage up on our people is shocking. Externalizing the problem cannot be a solution,” he wrote on Facebook after the meeting was concluded on Friday.

The state minister also harshly criticized the budget allocation of the just started 2022/23 is not enough to fight the insurgents. Nearly 400 million birr is allocated for the regional security budget, which the state minister argues should be more than one billion birr. This accounts for less than one percent of 158.6 billion birr budget approved by the Caffee.

However, the state minister did not mention shortcomings of his ministry why the insurgent group is remaining at large.

Businesses that are registered in Tigray region as a federal taxpayer but are currently located outside the region will be paying their taxes at the Northwest Branch of the Ministry of Revenue in Addis Ababa.

The federal revenue that should have been collected in the region will be collected directly by the ministry. The tax that should have been collected by the regional government will be deposited in a trust bank account.

The ministries of finance and revenue are implementing this temporary procedure because organizations and individuals registered as taxpayers in Tigray are having a difficulty to continue their business activities in other parts of the country, according to Abaynesh Abate, the ministry’s tax declaration director.

Despite their desire to continue working in their current location, the taxpayers were unable to renew their business licenses, vehicles or construction equipment.

Abaynesh said that they could not obtain loans, bid on contracts or receive other government services. “Some of them even claimed that the house they rented for their business was in trouble since their business license had not been renewed.”

More than 100 complaints from Tigray’s taxpayers have been lodged to the ministry, and the number continues to grow. The majority are taxpayers who must pay taxes to the regional government.

Abaynesh says among the complainants, ten are Tigray registered firms that are managed by Commercial Nominees and pay federal taxes.

She explained that after the ministry informed the Ministry of Finance about the complaint in April, it allowed taxpayers to get a temporary tax clearance through a temporary procedure or register as taxpayers elsewhere.

In a letter written by the Ministry of Finance to the Ministry of Revenue last month, it acknowledged the regional government’s authority to collect the tax revenue in Tigray region.

The minister cited Article 96 of the Constitution to explain saying, “Since the income collected from individual businessmen and regional public enterprises is a regional income, it is clear that it is the regional government that can levy and collect tax.”

On the other hand, the letter explains that the tax collected from private organizations located in the region is the joint income of the federal and state governments, levied and collected by the federal government. But the income collected from federal public enterprises located in the region is the income of the federal government.

Nevertheless, since both taxpayers registered in Tigray are facing difficulties to conduct their activities due to the “emerging security problem,” State Minister, Eyob Tekalegn, in a letter stated that it is necessary to establish a temporary system.

The Ministry of Revenue, which has designated the North West branch in Addis Ababa’s Lideta neighborhood, will ensure that these taxpayers receive their tax clearance.

Abaynesh added that a request has been made to the Ministry of Finance to open a trust bank account where regional taxpayer revenue will be put.

“It will be held in a trust for later transfer to the region,” she explained.

According to Abaynesh, the ministry would only collect the taxes submitted by taxpayers because there is no means to check how much the region’s taxpayers owe.

“We don’t have any information to show how much they should be paying at that point. When the situation in the region stabilizes, it will be thoroughly examined” Abaynesh elaborated.

If taxpayers want to shift their workplace to their current address after receiving their tax clearance, registrations will be completed at the preferred address.

Under typical circumstances, changing a company’s address requires amending the company’s establishment document and submitting meeting minutes. Providing permission to change address is the authority of the regional government. All these requirements are not necessary expected to be meet in the temporary procedure.

However, even though both federal and state taxpayers registered in the state will be issued a tax clearance certificate from the Ministry of Revenue, they cannot sell their property. According to the Ministry of Finance’s letter, it is impossible to verify whether they have tax debt or not in the current situation.

Berhane Mewa is not only the former president of the Ethiopian and Addis Ababa Chamber of Commerce and Sectoral Associations, but is also a lifetime patriot in Ethiopia’s private sector struggles against state domination in the economy. Before he was forced into exile eighteen years ago by the EPRDF regime, he took up the struggle to create an independent chamber system and a real private sector in Ethiopia.

An industrial chemist by profession, Berhane came back to Addis to process a pharmaceutical investment license, to the tune of USD 22 million. He already has a plastic and rubber factory, which he established before his exile to the US.

Despite positive signs in the politics arena, Berhane argues the chambers system is still far from defending the private sector’s interests and contributing to the economy. Ashenafi Endale was granted audience. Excerpts:

The Reporter: What was at the core of your struggle for the Ethiopian private sector?

Birhane Mewa: I was forced to leave Ethiopia eighteen years ago. The government at the time was not happy with struggle in the Chamber, to create a strong private sector. I had no political interests. But after I left Ethiopia, I became a member of Kestedemena and Coalition for Unity and Democracy (Kinijit) political parties in North America. I was the secretary in Kinijit’s international leadership wing.

After Kinijit’s leadership were released from prison, I went back to normal life and started working as a business consultant, and then as a project manager. Of course I traveled to Ethiopia in between to attend my wife’s funeral. But now, I came to Ethiopia to process an investment license.

We are in the process of establishing a pharmaceutical factory in Ethiopia, in cooperation with Ethiopians engaged in the pharmacy business in the US. In general, we are here following PM Abiy Ahmed’s (PhD) call to the diaspora.

What is the kind of Chamber you want to see in Ethiopia?

The Chamber was first established as ‘the Addis Ababa Traders Association,’ during the Emperor’s era. Then it was re-established as Ethiopian Traders Council. It was free and active in advising the government, until Derg completely changed that trend. Derg made memberships mandatory and all businesses had to pay a chamber membership fees after they get their licenses.

Derg also shrunk the number of board members representing the private sector in the council, from eleven to one. At that time, nine of the eleven board members were general managers of state corporations; with only Wubshet Werkalemahu was representing the private sector.

After EPRDF took power, the general managers of state corporations left the chamber. At the time, I was president of the Ethiopian Private Manufacturing Association. So I became vice president of the Chamber to close the vacuum. And when Kebour Gena left, I became president of the chamber, through competition.

The fundamental objective of the Chamber is to advise the government before it introduces polices that affect the private sector and the economy. The second is to provide services for the private sector including trainings, information and arbitration. We were successful on both. Both the Addis and Ethiopian Chambers won various international awards, including the ‘best chamber in Africa’ award.

Nonetheless, the EPRDF was working hard to create divisions amongst, Addis Ababa, regional and sectoral chambers and associations. I worked hard to cut out such divisions and create a stronger chamber. We also managed to get back the chamber’s assets taken by the government. We also managed to access 100,000 sq. m of land for the chamber, on which the Addis-Africa exhibition center is currently being established.

Where is (should be) the exact line between state and private sector roles in the economy?

In principle, the private sector is the backbone of the economy, especially in a free market system. But during the TPLF dominated EPRDF regime; the government tried to replace the private sector by state affiliated endowment companies and state owned enterprises, which are still under party control. They enjoy access to finance, bureaucratic support, information, monopoly and other privileges. This has been stunting the growth of the private sector. I am not sure whether the situation still changed. Party affiliations still control the media, not only businesses and the economy.

Besides those parastatals, there are private businesses parasitic on preferential treatments, provided from the parties. Preferential treatment is still given for businesses, in accessing land, finance, foreign currency, and other privileges. A real private sector, which is self-created and hardworking, is very limited in Ethiopia.

The parties and government affiliated private sectors, still prevail, only changing its face. If you look at past private businesses currently, it is not hard to find a party or state support.

The right private sector should be represented only by the Chamber. It should be free, with no political interests, but defend the interests of the private sector. When we say ‘private sector’, it includes the street vendor and Gulit, to the factory and bank owners. The similarity amongst them is that they have a business license, and a common interest. There are various obstacles that hinder the chamber.

Ethiopia’s future depends on the real private sector. Foreign Direct Investments are also necessary but the domestic private sector is critical in terms of self-sufficiency, sovereignty and retention of repatriation. FDI’s can leave anytime.

Even in the USA, the private sector supports either democrats or republicans. Can a real private sector exist without any affiliation with the ruling party?

If you go to Mercato, everyone works for their own interests. They are not paid by the government but they pay taxes to the government. What the government can do is improve and equalize the playing ground.

Of course the private sector in the US supports parties. The difference is corruption is legal in the US. It is called lobbying and it is not a crime. It is also regulated. But in Ethiopia, parties establish affiliated businesses and keep taking money. The biggest problem appears when the parties themselves engage in the business. This is the biggest problem in Ethiopia. Nobody knows where the money from public enterprises goes to.

Political parties must exit from businesses and the economy. In the US, individuals and businesses giving money to parties, is publicly known, and audited. The tax authority also knows it.

Do you think the existing private sector in Ethiopia can be changed into a real private sector, or should we start over?

A real private sector is not something we create. What the government should do is create conducive environment for a ‘real private sector to emerge.’ It is the demand and supply dynamism that creates a real private sector. There are shoe shiners who have become millionaires. Did the government create them? Of course the government can facilitate support, but without political affiliation.

PM Abiy’s administration rolled out privatization and liberalization initiatives in the past three years. Do you think it is sufficient to re-balance the state dominated economy previously under the EPRDF?

There are positive signs but still some individual businesses are close to the government, instead of organized business communities under the Chamber. I do not think this is good. The government must recognize, capacitate and work with the Chamber. There are improvements regarding regulatory issues and public services. But still there is a chain of corruption in the government system. It is related to power and partisanships, which is a big obstacle that must be reduced. The government has good intentions. There are various issues studied and forwarded by the chamber and sectoral associations. Things will improve if the government reacts on those issues. If it does not start punishing corruption and avoid party affiliation and preferential treatments for selected businesses, the problem will get worse. It is the government that creates a corrupt private sector.

Corruption is also unavoidable when the public servants are paid meager salaries. The government must pay public servants sufficiently. So, corruption is high not because people are bad, or the officials are greedy, but the civil servant takes corruption as supplementary revenue.

The government also drafted a new proclamation to re-establish the Chamber. The draft proposes membership as mandatory, among others. How can a strong chamber be established? Recently, two chamber officials also defected to the US. Why is there always an internal feud inside the chambers structure?

There is a structural problem in the Chamber. It is intentionally created. Making memberships mandatory generates revenue for the chamber. But it hinders the chambers from providing quality service for their members. This was seen during the Derg regime. Immediately after the EPRDF came, it worked hard to weaken all institutions, including the chamber, teachers association, and others. The EPRDF made memberships willingly, to shrink the chamber’s revenue and finally close the chamber due to a lack of fund. But we managed to survive, by improving services and generating revenue from creative works.

Especially, the Addis Ababa Chamber became stronger, at the time, while there were some problems in the Ethiopian Chamber of Commerce. When I was about to leave, there were efforts to change the Chamber’s laws and the government wanted to re-design the Chamber, to fit to the politics.

The Chamber serves wherever there are private businesses, not government structures or political leaderships. But the government shadowed and dominated cities’ chambers, by chambers of regional states. These regional state chambers are under the control of party officials. The Ethiopian chamber also fell under the influence of party members. We tried to avoid those influences and somehow succeeded to maintain a Chamber that represents only the interest of businesses.

The proclamation tried to further divide the chamber across sectors, on top of the regional structure, dissecting the interest of the private sector. Kiosk and garage owners have different interests, but also have common interests. These specific interests should be solved under sectoral associations, and their common interest under the chamber. But what the government did is bundle the sectoral associations and the Chamber together. Businesses with different interests sat on the same table, and failed to agree. So, there is still a structural problem.

I have seen the new draft proclamation too. We are unfortunate the draft did not address the problem still. The chambers and the business community still did not reach a consensus on the draft. The Addis Ababa and Ethiopian chambers are in agreement and sectoral associations have also their won perspectives.

Chambers should work only on general issues that represent the common interests of all businesses and the economy at large, aided by sectoral associations formed separately, representing interests of businesses in specific sectors. Thus, the chamber and sectoral associations should be established separately. I do not know the status of the draft proclamation currently, but if it is ratified, it would take another generation to amend.

So, do you believe the Ethiopian chamber should be the all-encompassing strong umbrella?

Not necessarily. My point is the chamber system should be separate from sectoral associations. Whether at local, cities or a national level, chamber must be strong. But they must align. The issue of sectoral associations is completely different. For instance, leather industries have problems that can be solved both through the chamber, and their association platforms. This is the right way.

For instance, there was the Ethiopian Manufacturing Industries Association. It was challenging the government regarding manufacturer’s interests. Its strong momentum even empowered the chamber. Then the EPRDF practically dismantled it. It even prohibited the association from renting an office. The EPRDF regime never wanted such strong associations and chambers. The reason why the government overlapped chambers and sectoral associations is to deny them on common grounds.

If the draft is ratified, it only maintains the problem. Currently, the government’s system prefers individual businesses, than the organized private sector.

So the draft should be revised and discussed again?

The process of crafting the proclamation has problems from its very inception. The chamber members and business communities have no consensus on the draft. The Ethiopian, Addis Ababa, and regional chambers must sit down and discuss on the issue.

The Ethiopian government is trying to allure investments by the diaspora. If the diaspora invest and save in US banks, or in Ethiopia, which return on investment is attractive? Or do you think the government should design incentive packages for the diaspora?

Businesses in Ethiopia are more profitable than other countries. The reason the US government devised AGOA from the beginning, is because African businesses can be profitable. Even in terms of savings, the return in Ethiopia is higher than Europe or elsewhere. The problem in Ethiopia is not on returns, but convertibility. Repatriation might be difficult. Saving in Ethiopia by itself is profitable, let alone investment. There are so many profitable business sectors in Ethiopia. Many sectors are emerging, and not exploited yet.

The other problem is that the Ethiopian diaspora has lost trust in the government back home. So, the current government must reverse that perception, through transparency, commitment and service efficiency.

Thirdly, the diaspora needs information supply on feasible businesses and projects in Ethiopia. Then the diaspora can form share companies, joint ventures, PLC’s or other investment modalities. If the diaspora know feasible businesses and the laws, then they can invest. Currently, the diaspora is placing their money on the stock market and other businesses abroad. They can divert that money to go back home.

Especially, the profitability in the financial industry in Ethiopia is very lucrative; but the government should facilitate currency convertibility. Plus, most diaspora’s in Europe and the US left Ethiopia three to four decades ago. They are at s retirement age now. So if the health system in Ethiopia is improved, most diaspora’s would prefer to go back to Ethiopia.

The diaspora also wants transparent systems to complain in cases of corruption and bad services. There is corruption in Europe and the US. But it is political corruption not work corruption. Political corruption is trying to twist or influence introduction of policies, proclamations or directives. Work corruption is bribing officials, institutions, and public services. There must be a complaint window for this.

The west has been shifting away from Ethiopia and imposed sanctions. Substantial number of Ethiopians vote, especially in the US. Can Ethiopians and black Africans use their voting power to discard unfavorable officials or parties in the US or influence to reverse such sanctions?

The diplomatic system has a more crucial role in this. To be specific, the US faced unprecedented situation in Ethiopia. A government that refuses foreign pressure emerged in Ethiopia.

The US even used the UNSC to pressurize Ethiopia, meeting twelve times within six months. On top of the strong refusal of the Ethiopian government to surrender, the #nomore movement strengthened the support for Ethiopia, rallying Africans behind Ethiopia. The movement is stronger than election powers. The movement eroded US’s credibility in Africa, and in the world.

Even during calls that Addis Ababa will fall to the hands of insurgents, one million diaspora opted to come back home. I believe Ethiopia will regain its rightful place in the international stage.

Unlike any time before, the diaspora is on the same page now, regarding national issues. Before this, the diaspora’s were highly divided and turned against each other. The division created a negative energy. If the diaspora was united before, the EPRDF could have been long gone. The Diaspora and opposition figures abroad were used to strife, not unity.

Can we say that the US’s pressure is normalizing since the tension with China over the horn escalated?

Their strategy differs. The US wants to ensure its interests through political influence, while China does it through investment and economic empowering. The US’s and China’s struggles will continue, whether Ethiopia is there or not. China, Russia, Turkey, Iran and India, to some degree, are joining the friction now. They have certain interests with or against the US.

The US’s fear is not what China will do in Ethiopia, but the kind of measures Ethiopia takes. For instance, Ethiopia’s normalization with Eritrea and the alliance with Somalia is a threat for the US. When the US told Ethiopia to stop the war, Ethiopia rather turned a deaf ear. Ethiopia filled the renaissance dam, when the US opposed it. These are some of the bold moves against US interests.

These moves have nothing to do with China, but they are decisions emanating from the nature of Ethiopians. So, the confrontation between the US and China continues, while Ethiopia strides to protect and implement its national interests fully.

I do not think Ethiopia will completely shift its diplomatic ties towards China. Imperialism is always imperialism, but it changes its face. The US always wants a government that listens to them. If a government refuses to carry out their interest, they depose that government, including assassinations. In cases such as Libya, Iraq and Syria, the US’s footprints in the countries politics can be seen from afar.

The US put the same type of pressures that worked before, and in Ethiopia’s case, it has failed. But the pressure will continue. Ethiopia has passed a major obstacle. Yet, Ethiopia needs to sharpen its diplomacy more.

At what stage is your investment process currently? What are your future plans?

We are establishing the pharmaceutical factory in Ethiopia, in collaboration with highly professional pharmacists, scientists and business people in the Ethiopian diaspora. Finance, knowledge and vision are required to establish a medicine factory. If you have capital, you can buy knowledge, since it is a commodity.

Our vision is to manufacture medicine and medical equipment’s in Ethiopia and provide for Ethiopians. It is not even about profits. We wanted to improve the medicine supply shortages in Ethiopia.

We have been preparing for the past two years. We came to invest in Ethiopia, amidst the rhetoric that Addis Ababa is about to fall. Our team strongly believes in Ethiopia. Currently, we are processing the investment license.

How much is the investment?

The initial investment will take us between USD 20 million to USD 22 million.

What is your conclusion on the soundness of the Ethiopian economy, especially in post-pandemic and post-conflict endeavors?

My first impression when I came to Ethiopia after almost two decades was that all the negative narratives about Ethiopia and Addis Ababa are wrong. There is still an active economy. Across streets of Addis Ababa, day and night, residents are scrambling to buy from street vendors. This indicates to a huge demand in the economy. This is a living economy.

But it does not mean there are no problems in the economy. There is a forex shortage, industrial inputs shortages, logistics problems and others. Yet, the economy has a big potential, especially if public services are improved, corruption is eliminated and bureaucracy is improved.

Do you think the government should maintain protectionism?

The US and Europe are not afraid of protectionism. Why should Ethiopia be afraid of it? Ethiopia is eager to join the WTO. But Europe is still protecting its agriculture. The US is prohibiting import of wood, aluminum and other items, especially trump did everything to protect local industries. So, Ethiopia must also protect its industries.

After America banned Ethiopia from the AGOA, US companies left the Hawassa industrial park. If it is a local factory, they would not do so.

Before, the US’s private sector had no national interest, instead they go for profits. That is why US industries moved factories to China, in search of a cheap labor. But now, the US government is asking them to come back and create jobs in the US.

The country needs a nationalist private sector. The private sector cannot just seek profits and become a pure capitalist. It must contribute to the social wellbeing and development of the country.

Even FDI’s must be undertaken in a joint venture scheme. If it has a local element, the investment can be sustainable.

How can one balance profit seeking versus national interests? Scholars also say the psychological make-up of Ethiopians is not compatible for capitalism.

Corporate governance, labor unions and social responsibility can balance capitalism. National security should be a concern of the private sector. If there is no security, there is no transport, meaning there is no market. Drought should concern the private sector. These make the private sector become a nationalist by default.

One of the major tasks of the Chamber is to make businesses discharge their social responsibility.

Thus, your conclusion is capitalism can work in Ethiopia.

The old way of capitalism, which is seeking only profits, does not exist anymore. Of course, you are responsible for your shareholders and board members. At the same time, you have to be responsible to the society.

Why you are not investing in the banking sector rather than pharmaceuticals?

The government said it opened the banking sector for the diaspora, but still, there are unsettled problems. It said the diaspora had to invest in foreign currency. This is an obstacle.

But the major reason I joined the pharmaceutical project, is because it is a matter of professionalism. Manufacturing is difficult in Ethiopia. We have a big purpose to bring change in the medical supply shortage in Ethiopia. We will produce capsules and tablets. We will also export, once we address the domestic demand. The company will also establish an R&D wing, which will conduct studies for other firms. Most of the founders are also researchers.

Are you a chemical engineer by profession?

I studied chemistry. I also studied industrial chemistry at Bahir Dar polytechnic. I already have a factory in Ethiopia, which produces plastic and rubber. It is expanding now.

Berhane Mewa is not only the former president of the Ethiopian and Addis Ababa Chamber of Commerce and Sectoral Associations, but is also a lifetime patriot in Ethiopia’s private sector struggles against state domination in the economy. Before he was forced into exile eighteen years ago by the EPRDF regime, he took up the struggle to create an independent chamber system and a real private sector in Ethiopia.

An industrial chemist by profession, Berhane came back to Addis to process a pharmaceutical investment license, to the tune of USD 22 million. He already has a plastic and rubber factory, which he established before his exile to the US.

Despite positive signs in the politics arena, Berhane argues the chambers system is still far from defending the private sector’s interests and contributing to the economy. Ashenafi Endale was granted audience. Excerpts:

The Reporter: What was at the core of your struggle for the Ethiopian private sector?

Birhane Mewa: I was forced to leave Ethiopia eighteen years ago. The government at the time was not happy with struggle in the Chamber, to create a strong private sector. I had no political interests. But after I left Ethiopia, I became a member of Kestedemena and Coalition for Unity and Democracy (Kinijit) political parties in North America. I was the secretary in Kinijit’s international leadership wing.

After Kinijit’s leadership were released from prison, I went back to normal life and started working as a business consultant, and then as a project manager. Of course I traveled to Ethiopia in between to attend my wife’s funeral. But now, I came to Ethiopia to process an investment license.

We are in the process of establishing a pharmaceutical factory in Ethiopia, in cooperation with Ethiopians engaged in the pharmacy business in the US. In general, we are here following PM Abiy Ahmed’s (PhD) call to the diaspora.

What is the kind of Chamber you want to see in Ethiopia?

The Chamber was first established as ‘the Addis Ababa Traders Association,’ during the Emperor’s era. Then it was re-established as Ethiopian Traders Council. It was free and active in advising the government, until Derg completely changed that trend. Derg made memberships mandatory and all businesses had to pay a chamber membership fees after they get their licenses.

Derg also shrunk the number of board members representing the private sector in the council, from eleven to one. At that time, nine of the eleven board members were general managers of state corporations; with only Wubshet Werkalemahu was representing the private sector.

After EPRDF took power, the general managers of state corporations left the chamber. At the time, I was president of the Ethiopian Private Manufacturing Association. So I became vice president of the Chamber to close the vacuum. And when Kebour Gena left, I became president of the chamber, through competition.

The fundamental objective of the Chamber is to advise the government before it introduces polices that affect the private sector and the economy. The second is to provide services for the private sector including trainings, information and arbitration. We were successful on both. Both the Addis and Ethiopian Chambers won various international awards, including the ‘best chamber in Africa’ award.

Nonetheless, the EPRDF was working hard to create divisions amongst, Addis Ababa, regional and sectoral chambers and associations. I worked hard to cut out such divisions and create a stronger chamber. We also managed to get back the chamber’s assets taken by the government. We also managed to access 100,000 sq. m of land for the chamber, on which the Addis-Africa exhibition center is currently being established.

Where is (should be) the exact line between state and private sector roles in the economy?

In principle, the private sector is the backbone of the economy, especially in a free market system. But during the TPLF dominated EPRDF regime; the government tried to replace the private sector by state affiliated endowment companies and state owned enterprises, which are still under party control. They enjoy access to finance, bureaucratic support, information, monopoly and other privileges. This has been stunting the growth of the private sector. I am not sure whether the situation still changed. Party affiliations still control the media, not only businesses and the economy.

Besides those parastatals, there are private businesses parasitic on preferential treatments, provided from the parties. Preferential treatment is still given for businesses, in accessing land, finance, foreign currency, and other privileges. A real private sector, which is self-created and hardworking, is very limited in Ethiopia.

The parties and government affiliated private sectors, still prevail, only changing its face. If you look at past private businesses currently, it is not hard to find a party or state support.

The right private sector should be represented only by the Chamber. It should be free, with no political interests, but defend the interests of the private sector. When we say ‘private sector’, it includes the street vendor and Gulit, to the factory and bank owners. The similarity amongst them is that they have a business license, and a common interest. There are various obstacles that hinder the chamber.

Ethiopia’s future depends on the real private sector. Foreign Direct Investments are also necessary but the domestic private sector is critical in terms of self-sufficiency, sovereignty and retention of repatriation. FDI’s can leave anytime.

Even in the USA, the private sector supports either democrats or republicans. Can a real private sector exist without any affiliation with the ruling party?

If you go to Mercato, everyone works for their own interests. They are not paid by the government but they pay taxes to the government. What the government can do is improve and equalize the playing ground.

Of course the private sector in the US supports parties. The difference is corruption is legal in the US. It is called lobbying and it is not a crime. It is also regulated. But in Ethiopia, parties establish affiliated businesses and keep taking money. The biggest problem appears when the parties themselves engage in the business. This is the biggest problem in Ethiopia. Nobody knows where the money from public enterprises goes to.

Political parties must exit from businesses and the economy. In the US, individuals and businesses giving money to parties, is publicly known, and audited. The tax authority also knows it.

Do you think the existing private sector in Ethiopia can be changed into a real private sector, or should we start over?

A real private sector is not something we create. What the government should do is create conducive environment for a ‘real private sector to emerge.’ It is the demand and supply dynamism that creates a real private sector. There are shoe shiners who have become millionaires. Did the government create them? Of course the government can facilitate support, but without political affiliation.

PM Abiy’s administration rolled out privatization and liberalization initiatives in the past three years. Do you think it is sufficient to re-balance the state dominated economy previously under the EPRDF?

There are positive signs but still some individual businesses are close to the government, instead of organized business communities under the Chamber. I do not think this is good. The government must recognize, capacitate and work with the Chamber. There are improvements regarding regulatory issues and public services. But still there is a chain of corruption in the government system. It is related to power and partisanships, which is a big obstacle that must be reduced. The government has good intentions. There are various issues studied and forwarded by the chamber and sectoral associations. Things will improve if the government reacts on those issues. If it does not start punishing corruption and avoid party affiliation and preferential treatments for selected businesses, the problem will get worse. It is the government that creates a corrupt private sector.

Corruption is also unavoidable when the public servants are paid meager salaries. The government must pay public servants sufficiently. So, corruption is high not because people are bad, or the officials are greedy, but the civil servant takes corruption as supplementary revenue.

The government also drafted a new proclamation to re-establish the Chamber. The draft proposes membership as mandatory, among others. How can a strong chamber be established? Recently, two chamber officials also defected to the US. Why is there always an internal feud inside the chambers structure?

There is a structural problem in the Chamber. It is intentionally created. Making memberships mandatory generates revenue for the chamber. But it hinders the chambers from providing quality service for their members. This was seen during the Derg regime. Immediately after the EPRDF came, it worked hard to weaken all institutions, including the chamber, teachers association, and others. The EPRDF made memberships willingly, to shrink the chamber’s revenue and finally close the chamber due to a lack of fund. But we managed to survive, by improving services and generating revenue from creative works.

Especially, the Addis Ababa Chamber became stronger, at the time, while there were some problems in the Ethiopian Chamber of Commerce. When I was about to leave, there were efforts to change the Chamber’s laws and the government wanted to re-design the Chamber, to fit to the politics.

The Chamber serves wherever there are private businesses, not government structures or political leaderships. But the government shadowed and dominated cities’ chambers, by chambers of regional states. These regional state chambers are under the control of party officials. The Ethiopian chamber also fell under the influence of party members. We tried to avoid those influences and somehow succeeded to maintain a Chamber that represents only the interest of businesses.

The proclamation tried to further divide the chamber across sectors, on top of the regional structure, dissecting the interest of the private sector. Kiosk and garage owners have different interests, but also have common interests. These specific interests should be solved under sectoral associations, and their common interest under the chamber. But what the government did is bundle the sectoral associations and the Chamber together. Businesses with different interests sat on the same table, and failed to agree. So, there is still a structural problem.

I have seen the new draft proclamation too. We are unfortunate the draft did not address the problem still. The chambers and the business community still did not reach a consensus on the draft. The Addis Ababa and Ethiopian chambers are in agreement and sectoral associations have also their won perspectives.

Chambers should work only on general issues that represent the common interests of all businesses and the economy at large, aided by sectoral associations formed separately, representing interests of businesses in specific sectors. Thus, the chamber and sectoral associations should be established separately. I do not know the status of the draft proclamation currently, but if it is ratified, it would take another generation to amend.

So, do you believe the Ethiopian chamber should be the all-encompassing strong umbrella?

Not necessarily. My point is the chamber system should be separate from sectoral associations. Whether at local, cities or a national level, chamber must be strong. But they must align. The issue of sectoral associations is completely different. For instance, leather industries have problems that can be solved both through the chamber, and their association platforms. This is the right way.

For instance, there was the Ethiopian Manufacturing Industries Association. It was challenging the government regarding manufacturer’s interests. Its strong momentum even empowered the chamber. Then the EPRDF practically dismantled it. It even prohibited the association from renting an office. The EPRDF regime never wanted such strong associations and chambers. The reason why the government overlapped chambers and sectoral associations is to deny them on common grounds.

If the draft is ratified, it only maintains the problem. Currently, the government’s system prefers individual businesses, than the organized private sector.

So the draft should be revised and discussed again?

The process of crafting the proclamation has problems from its very inception. The chamber members and business communities have no consensus on the draft. The Ethiopian, Addis Ababa, and regional chambers must sit down and discuss on the issue.

The Ethiopian government is trying to allure investments by the diaspora. If the diaspora invest and save in US banks, or in Ethiopia, which return on investment is attractive? Or do you think the government should design incentive packages for the diaspora?

Businesses in Ethiopia are more profitable than other countries. The reason the US government devised AGOA from the beginning, is because African businesses can be profitable. Even in terms of savings, the return in Ethiopia is higher than Europe or elsewhere. The problem in Ethiopia is not on returns, but convertibility. Repatriation might be difficult. Saving in Ethiopia by itself is profitable, let alone investment. There are so many profitable business sectors in Ethiopia. Many sectors are emerging, and not exploited yet.

The other problem is that the Ethiopian diaspora has lost trust in the government back home. So, the current government must reverse that perception, through transparency, commitment and service efficiency.

Thirdly, the diaspora needs information supply on feasible businesses and projects in Ethiopia. Then the diaspora can form share companies, joint ventures, PLC’s or other investment modalities. If the diaspora know feasible businesses and the laws, then they can invest. Currently, the diaspora is placing their money on the stock market and other businesses abroad. They can divert that money to go back home.

Especially, the profitability in the financial industry in Ethiopia is very lucrative; but the government should facilitate currency convertibility. Plus, most diaspora’s in Europe and the US left Ethiopia three to four decades ago. They are at s retirement age now. So if the health system in Ethiopia is improved, most diaspora’s would prefer to go back to Ethiopia.

The diaspora also wants transparent systems to complain in cases of corruption and bad services. There is corruption in Europe and the US. But it is political corruption not work corruption. Political corruption is trying to twist or influence introduction of policies, proclamations or directives. Work corruption is bribing officials, institutions, and public services. There must be a complaint window for this.

The west has been shifting away from Ethiopia and imposed sanctions. Substantial number of Ethiopians vote, especially in the US. Can Ethiopians and black Africans use their voting power to discard unfavorable officials or parties in the US or influence to reverse such sanctions?

The diplomatic system has a more crucial role in this. To be specific, the US faced unprecedented situation in Ethiopia. A government that refuses foreign pressure emerged in Ethiopia.

The US even used the UNSC to pressurize Ethiopia, meeting twelve times within six months. On top of the strong refusal of the Ethiopian government to surrender, the #nomore movement strengthened the support for Ethiopia, rallying Africans behind Ethiopia. The movement is stronger than election powers. The movement eroded US’s credibility in Africa, and in the world.

Even during calls that Addis Ababa will fall to the hands of insurgents, one million diaspora opted to come back home. I believe Ethiopia will regain its rightful place in the international stage.

Unlike any time before, the diaspora is on the same page now, regarding national issues. Before this, the diaspora’s were highly divided and turned against each other. The division created a negative energy. If the diaspora was united before, the EPRDF could have been long gone. The Diaspora and opposition figures abroad were used to strife, not unity.

Can we say that the US’s pressure is normalizing since the tension with China over the horn escalated?

Their strategy differs. The US wants to ensure its interests through political influence, while China does it through investment and economic empowering. The US’s and China’s struggles will continue, whether Ethiopia is there or not. China, Russia, Turkey, Iran and India, to some degree, are joining the friction now. They have certain interests with or against the US.

The US’s fear is not what China will do in Ethiopia, but the kind of measures Ethiopia takes. For instance, Ethiopia’s normalization with Eritrea and the alliance with Somalia is a threat for the US. When the US told Ethiopia to stop the war, Ethiopia rather turned a deaf ear. Ethiopia filled the renaissance dam, when the US opposed it. These are some of the bold moves against US interests.

These moves have nothing to do with China, but they are decisions emanating from the nature of Ethiopians. So, the confrontation between the US and China continues, while Ethiopia strides to protect and implement its national interests fully.

I do not think Ethiopia will completely shift its diplomatic ties towards China. Imperialism is always imperialism, but it changes its face. The US always wants a government that listens to them. If a government refuses to carry out their interest, they depose that government, including assassinations. In cases such as Libya, Iraq and Syria, the US’s footprints in the countries politics can be seen from afar.

The US put the same type of pressures that worked before, and in Ethiopia’s case, it has failed. But the pressure will continue. Ethiopia has passed a major obstacle. Yet, Ethiopia needs to sharpen its diplomacy more.

At what stage is your investment process currently? What are your future plans?

We are establishing the pharmaceutical factory in Ethiopia, in collaboration with highly professional pharmacists, scientists and business people in the Ethiopian diaspora. Finance, knowledge and vision are required to establish a medicine factory. If you have capital, you can buy knowledge, since it is a commodity.

Our vision is to manufacture medicine and medical equipment’s in Ethiopia and provide for Ethiopians. It is not even about profits. We wanted to improve the medicine supply shortages in Ethiopia.

We have been preparing for the past two years. We came to invest in Ethiopia, amidst the rhetoric that Addis Ababa is about to fall. Our team strongly believes in Ethiopia. Currently, we are processing the investment license.

How much is the investment?

The initial investment will take us between USD 20 million to USD 22 million.

What is your conclusion on the soundness of the Ethiopian economy, especially in post-pandemic and post-conflict endeavors?

My first impression when I came to Ethiopia after almost two decades was that all the negative narratives about Ethiopia and Addis Ababa are wrong. There is still an active economy. Across streets of Addis Ababa, day and night, residents are scrambling to buy from street vendors. This indicates to a huge demand in the economy. This is a living economy.

But it does not mean there are no problems in the economy. There is a forex shortage, industrial inputs shortages, logistics problems and others. Yet, the economy has a big potential, especially if public services are improved, corruption is eliminated and bureaucracy is improved.

Do you think the government should maintain protectionism?

The US and Europe are not afraid of protectionism. Why should Ethiopia be afraid of it? Ethiopia is eager to join the WTO. But Europe is still protecting its agriculture. The US is prohibiting import of wood, aluminum and other items, especially trump did everything to protect local industries. So, Ethiopia must also protect its industries.

After America banned Ethiopia from the AGOA, US companies left the Hawassa industrial park. If it is a local factory, they would not do so.

Before, the US’s private sector had no national interest, instead they go for profits. That is why US industries moved factories to China, in search of a cheap labor. But now, the US government is asking them to come back and create jobs in the US.

The country needs a nationalist private sector. The private sector cannot just seek profits and become a pure capitalist. It must contribute to the social wellbeing and development of the country.

Even FDI’s must be undertaken in a joint venture scheme. If it has a local element, the investment can be sustainable.

How can one balance profit seeking versus national interests? Scholars also say the psychological make-up of Ethiopians is not compatible for capitalism.

Corporate governance, labor unions and social responsibility can balance capitalism. National security should be a concern of the private sector. If there is no security, there is no transport, meaning there is no market. Drought should concern the private sector. These make the private sector become a nationalist by default.

One of the major tasks of the Chamber is to make businesses discharge their social responsibility.

Thus, your conclusion is capitalism can work in Ethiopia.

The old way of capitalism, which is seeking only profits, does not exist anymore. Of course, you are responsible for your shareholders and board members. At the same time, you have to be responsible to the society.

Why you are not investing in the banking sector rather than pharmaceuticals?

The government said it opened the banking sector for the diaspora, but still, there are unsettled problems. It said the diaspora had to invest in foreign currency. This is an obstacle.

But the major reason I joined the pharmaceutical project, is because it is a matter of professionalism. Manufacturing is difficult in Ethiopia. We have a big purpose to bring change in the medical supply shortage in Ethiopia. We will produce capsules and tablets. We will also export, once we address the domestic demand. The company will also establish an R&D wing, which will conduct studies for other firms. Most of the founders are also researchers.

Are you a chemical engineer by profession?

I studied chemistry. I also studied industrial chemistry at Bahir Dar polytechnic. I already have a factory in Ethiopia, which produces plastic and rubber. It is expanding now.

Aklilu Wubet is a veteran in the banking industry. He joined Wegagen Bank on March 2020 as the Vice President of Corporate Service, having served in different capacities in many financial companies, including the Commercial Bank of Ethiopia, in the last 25 years. He was also the deputy CEO of Nile Insurance, Bank of Abyssinia and Lion Bank, and also served as a lecturer at Addis Ababa University.

The Reporter’s Samson Berhane sat down with Aklilu to reflect on his journey at Wegagen and the challenges ahead, as the acting president attempts to bring the bank back to its usual top status it has held for the last two decades. Excerpts:

The Reporter: You have joined Wegagen during a challenging time, when it faces decline in revenue from different sources particularly due to the tense political situation in the country. How are things going since you joined the Bank?

Aklilu Wubet: Banking is always challenging, especially in a world where resources are limited. And leadership is critical during a challenging time. Leading a company during its challenging moments is a great task and makes me happy. Especially, if you have strong team, challenge is a good thing. One thing you should also understand is that Wegagen is still a very strong bank, despite the challenges it has faced.

When I decided to join the Bank, I was confident that I would overcome all the challenges by working with a strong management and team the Bank has. The conflict has impacted all commercial banks. Peace is very important for the industry than any segment of the economy since banks deal with liquid resources. The impacts of the war, in particular, were severe on us because we are among the financial institutions with large number of branches in the areas affected by conflict.

When I joined Wegagen, my priority was to help the Bank withstand the impacts of the war. That requires being prudent and to closely work with regulatory bodies, investors and other stakeholders.

In the last 25 years, Wegagen was among the most profitable financial institutions in Ethiopia. Why was it not solid enough to withstand the shock brought on by the war in Northern Ethiopia?

To begin with, the Bank has been effective in withstanding the impacts of the war. Even though the profit is low, and has declined drastically, it is still profitable. It still has a large customer base and a huge amount of assets. Thanks to the strong base, which the bank is built on; it has been successfully coping with the conflict, even though more than a third of its branches are closed.

The profitability of the Bank in the last two decades has helped it build its asset base, enabling it to withstand the impacts of the war. The rules of the central bank and its strong regulations have had its contribution in enabling us to remain strong in such a challenging period.

The strong expense management that we have applied and the strong marketing system implemented by our management team has also contributed to the success of the Bank. If it was not due to such factors, the history of the Bank would have been ruined. But thanks to our efforts, we have defied the prediction made by some, who have forecasted that we will face a loss due to the war. But we are still in a good shape.

We have devised a strategy and are also undergoing restructuring, and increasing the number of vice presidents we have. We are still among the big players in the industry, hiring elite bankers.

According to industry insiders, the bottom line in the banking industry is profits and shareholders’ return. How did you come to the conclusion that the Bank is in a good shape, while its profit dwindled from one billion birr to 193 million birr?

Business is not only about making profits. Business is about being sustainable and staying competitive in an industry. The conflicts, coupled with macroeconomic challenges, have impacted the banking industry last year and banks would have profited much higher than they did, if there was peace.

Wegagen has declared a positive profit, while much of its branches are closed, and at a period when it was not able to collect loans given to businesses operating in war-affected areas. We even held a provision in case of loan defaults. We did not use a penny from the capital invested by shareholders, despite being in the midst of series of challenges. Overall, our objective was to make Wegagen the bank of all Ethiopians, by making it solid. I believe we have been successful in doing that.

There are critics that say Wegagen is a victim of an undiversified ownership structure which exists in the banking industry. Even though Wegagen is not the only financial institution established based on affiliation or along ethnic lines, some say its recent underperformance is an outcome of lack of diversification in terms of shareholders and customer base. Do you agree?

There are those that say banks are established based on affiliation.

Is that not the reality?

I cannot be sure because I have not had a chance to look through the list of shareholders of each commercial bank. In case of Wegagen, the story is different. Wegagen is wrongly misunderstood. If you see its shareholders, no bank is as Ethiopian as Wegagen. Its shareholders are highly diversified. Many big investors from different ethnic backgrounds have a stake in Wegagen. Name any investor and they are a shareholder of our bank. If you see the board, it is highly diversified. The same is also true if you see the management.

Did you bring that change?

No. I was the vice president 13 years ago at Wegagen and it was the same back then.

Okay, but in case of customer diversification, the reality is opposite to what you have said since the Bank’s profit declined drastically, when a third of its branches closed in one region. So is it not obvious that your bank did not work on diversifying its customer base?

Not only in Tigray. We also have many branches in Gambella and Somali than any other private banks. Of course, we have many customers in Tigray but that does not mean our customers in other areas like Addis Ababa are from the same region. We have over 2.5 million customers, way higher than the adult population eligible for banking services in Tigray. That shows how diversified our customer base is.

How about loan disbursement?

It is the same. More than 75 percent our loan portfolio is in Addis Ababa. However, in terms of deposits, the northern part of Ethiopia is known for being a big source. If you go to Mekelle, many commercial banks have many branches there. Some have more than seven or eight branches and the reason is obvious. This is because there is a good saving culture there. But that does not mean we have to work on the business mix because it is important to manage risks.

Then how did your non-performing loans surge because of the conflict if your borrowers are diversified?

We have provided five billion birr in loans to our customers in Tigray. We don’t know whether it can be paid or not because of the conflict. But that is enough to increase our non-performing loans. The whole industry faced similar problems because of the same reason. We held provisions in case of defaults. If it was not due to the higher provision we held, our profit would have been over one billion birr. That would be added to our income in the future, if we recover our loans. This means that we are investing in our future and if things go smoother and peace prevails, we hope things change drastically.

How is the liquidity position of Wegagen Bank? How capitalized is the bank?

We have a strong capital base. It used to be one of the largest in the industry, though some overtook us recently. Understanding its importance, our shareholders decided to raise the Bank’s paid-up capital to six billion birr before the end of the new deadline set by the central bank. We are also thankful that we don’t have a major shareholder because that gives us room for the management to do its job.

Regarding liquidity, when the central bank raised the reserve requirement from five to 10 percent, many feared that our bank would be among those that cannot meet the new threshold. But we are among the few banks that have fulfilled the requirement first. Our liquidity is now over 17 percent. However, that does not mean we are not facing liquidity shortages, because the whole industry is experiencing similar problems due to the sluggish growth of deposits.

Shareholders want to know when the bank would reach pre-war levels in terms of profitability. When do you think that would happen?

There are two assumptions. The first assumption is that the war would stop, peace would prevail and the government puts its energy towards the economy, a scenario which would benefit the banking industry. If peace prevails, our closed branches would be opened. We will be fully operational and our deposits would surge.

The second assumption is that if the conflict continues, we will operate with our existing resources and branches that are active. New banks are joining the industry. So I am sure we can perform better even with our active branches. We have already devised a strategy to mobilize more resources. We are hopeful that we will return to pre-war levels by the next general assembly.

Founded in September 2017, Eshi Express is a pioneer and one of the successful startups in tech-based delivery businesses, in an emerging business frontier in Ethiopia. Tigabu Haile, co-founder and CEO of Eshi Express sat with Ashenafi Endale of The Reporter, to talk about his business journey.

Excerpts:

The Reporter: What was the business pitch behind Eshi?

Tigabu Haile: If you buy an avocado in Yirgalem, it is around five birr per kilogram. But in Addis Ababa, it is around35 birr. So, we believed that Ethiopia needs an efficient logistics system in the supply and logistics service. Even in Addis, we do not see companies that provide end-to-end payment systems, sourcing and delivery services.

Sending packages in Addis is expensive. There are players like DHL, the Post Office and individual motorcycle owners. But Eshi can provide the service up to 50 percent cheaper than the market.

Basically, Eshi is a logistics company. So, how do you manage your fleet? What are the types of services you provide?

We have three types of services. We have Express service, in which we deliver any package in Addis within 90 minutes. The second type is delivery in half a day. If you order in the morning, we deliver in the afternoon. We charge 90 birr anywhere in Addis. The third category is delivery in 24 hours, which costs 70 birr anywhere in Addis.

Our main operation is in Addis. We use vans, pickups, motors and other types of vehicles. Most of the Ethiopian population is in the regions. We believe the logistics problem in the supply chain can be best addressed if we expand to regional states. Currently, we have been in the piloting phase in Adama and Hawassa, since last year. We will reach other regions in the next two years.

Do you own the whole fleet of vehicles?

We deployed the hybrid model. Around ten motorcycles and a van are owned by Eshi. But owning many vehicles is not feasible, so we stopped purchasing vehicles. We launched a technology six months ago, that enables any individual vehicle owner to register to our platform and deliver packages. Our model is called ‘from foot to fleet’. People can deliver on foot. Especially when we have big events, mass publications and other large deliveries many individuals deliver on foot.

How can these individuals or private vehicle owners access your platform? Is the technology similar to a taxi hailing platform?

It is almost similar but slightly different regarding registration system and insurance policies. Huge packages might be damaged in transit by individual vehicle owners. So, we always require courier insurance or insurance for goods in transit, for any private vehicle who works with Eshi.

How many vehicles that are not owned by Eshi are working with Eshi?

Right now we have more than 25 vans, pickups and different vehicles. There are also around fifteen motorcycles.

How many packages does Eshi deliver per day? How do you evaluate the demand?

The demand of the service is huge. There are thousands of delivery demands daily in Addis, while it is in the hundreds of thousands in the regions. The hard task is to make people use Eshi just once. Then they cannot stop using it.

Right now, Eshi delivers close to 115 packages per day. In the next three years, we plan to deliver thousands of packages daily.

How do you see the competition from other players in the market?

There is no really established company we see as competitors. There are legacy players like the DHL, Ethiopian Postal service, and individuals who have motorcycles. It is difficult for many startups to emerge and become competitors in this business.

Online payment, e-tax, e-commerce, delivery and packaging are involved in the business. How are these all done as one business?

Right now online transactions can happen but there are no e-receipts. It is impossible to make online transactions now. Payment is possible for internet and mobile banking. But if you cannot provide e-receipts, you cannot have a complete e-commerce transaction. There are shops that have an online presence. They just show their packages on their sites.

Does Eshi own warehouses or source from other suppliers?

Eshi collects the packages from companies who have warehouses. Receipt is issued traditionally. So, e-commerce is a work in progress. Eshi is the instrument that provides the logistics service. We do not sell any stuff online. Shopping happens between the customer and e-commerce companies. Once the order is placed and shopping done, either the customer or the e-commerce company orders Eshi to deliver the goods.

The number of e-commerce companies has increased since the COVID-19 pandemic. Has online delivery orders increased too?

E-commerce is taking off in Ethiopia and the government is also nearing to ratify the e-transaction law. All Shops will have an online presence. The outsourcing culture in Ethiopia is immature. Most companies want to do the e-commerce and delivery businesses by themselves. One company, especially startups, cannot handle both at the same time. So, after trying both for a year or two, they fail or specialize only in one.

Currently, big global e-commerce players are coming to Ethiopia. Probably they will launch in the next six months. Eshi has entered agreements with these global players, to do the delivery part. E-commerce companies should focus on what they can do best, because they cannot do it all, with limited time, energy and resources. We want to support their job, from the delivery side.

We will have many package drop-off points soon. If the customer is not at home when the delivery arrives, the drivers can place the packages at those points and the client can take it at anytime. This way, we are planning to drop many deliveries within one kilometer radius. This reduces our cost. That is why we charge 50 percent cheaper than the market. One delivery vehicle can cover many shops, pharmacies and supermarkets within an area.

Does Eshi plan to deliver beyond Ethiopia?

Ethiopia will operationalize the Africa Free Trade Agreement (AfCFTA) soon. Intra-Africa trade will boom in the near future. Eshi plans to become a Pan-African Delivery Company within the next three years.

Lack of automated addressing is a major bottleneck to delivery businesses in Addis. How are you solving it?

Absence of digital address system is a major problem for social services, health, banking, census, elections, apart from delivery business. Address is critical. If you do not have an address, you do not exist. Due to the lengthy communication between our delivery dispatches and clients, and usually missing locations, Eshi is losing resources, time and energy. The customer experience is also bad, because it is annoying when delivery personnel call repeatedly to find the address.

Currently, we have a project in the pipeline, named Eshi Locator, with our technology partner. It gives a code to each house’s. The codes are regenerated, when our partner localize using Google technology. We will imbed Google generated codes into our technology. It will take some time. Right now we are using Google maps, to locate the customer. But this has accuracy problems. Many things should improve to solve the location issue. Eshi Locator will be the solution.

What about using GPS locations or networks, if the customer uses a smart phone?

There are four mechanisms to order on Eshi Express. Customers can order on our website, use an application in Play Store, or call on one of our call centers. For Customers who have mass orders, like event organizers, big corporate or ecommerce companies, we have a separate technology platform, which can receive bulk orders and integrate it to our fleet system.

How much is the profit?

We cannot say it is profitable, even after staying four years in the business. At least we have survived, because we could also fail. The global data shows, less than two of ten startups celebrate their fifth year of establishment. Initiating and running a startup is very difficult. Access to capital is one of the biggest problems.

Was Eshi an angel investment?

Initially, Eshi was founded by me and my partner, who has similar business ideas with me. Eshi started with 1.3 million birr. We saved up the capital. We have also advisors. Last year, the Addis Ababa Angel Investors Network invested in Eshi. Delivery business is a capital, technology and skill intensive venture. You need to hire highly talented people. You have to scale-up fast. We hope the profit will come soon, once our delivery capacity grows.

So the angel investors are shareholders now. How much did they inject in the company?

We have an agreement not to disclose the amount. They injected the capital and immediately became shareholders. We gave them equity share worth their capital injection.

So return on investments has not come to fruition yet?

It will take time, especially with startups like us, in which you have to hire huge staff. No question, we are solving one of the top five challenges in Ethiopia. Lack of efficient logistics in the system is a major reason behind the rising inflation in Ethiopia. Food is being wasted because it cannot reach the market. For instance, there is surplus in the southern part of Ethiopia, while it is extremely scarce in the northern part of the country. That is because we do not have a robust logistics system.

Eshi still needs more cash injections to scale-up its capacity. Delivery is not only about packages, it is about the stories behind the packages. For instance the national blood bank of Ethiopia is one of our customers. We deliver blood every day. We collect blood from donation centers to the national blood bank. People are living because of that. NEBE is also among our customers. We did almost all deliveries in the past national election. We are behind the success of many big achievements. We are becoming instrumental in delivery in Ethiopia.

How many institutional customers do you have?

Currently it is close to 35. For instance, we deliver laboratory results for hospitals, on a daily basis. Embassies, hotels, optical shops, are some of them.

What are the incentives provided by the government for delivery companies, such as allowing duty free import of vehicles?

The government is not providing any support or incentive for delivery companies. There were no private courier service providers in Ethiopia, for long. So, only the Post Office and the DHL were known in this business.

For instance, driving motorcycles has been banned under the State of Emergency since some individuals might use motorcycles for crime. But Eshi had hired many staff, branded the motorcycles and there is no way motorcycles registered under delivery companies can be used for crimes. After all, we are delivering critical packages like blood and other essential services.

Secondly, there is an extreme lack of clarity among government institutions, regarding delivery businesses. Especially, the tax authorities are creating major obstacles to delivery companies. The government has no clear policy on delivery businesses, let alone support incentives. The delivery sector could not grow in Ethiopia, because the government has failed to understand it as a newly emerging sector.

There is the Ethiopian Couriers Association, to which Eshi Express is the board president. The association is trying to change the grim fate of the sector. We have submitted a letter to the government, asking the ban on motorcycles of delivery companies to be lifted. But the response from the government is slow.

Motor cycles cannot move after 6PM. So, we are forced to stop taking orders after 4PM. Otherwise, we cannot deliver last minute orders until the next day. This is especially affecting food delivery courier companies, because there orders are largely during dinner times.

What is the government’s response to the associations’ letter?

It has been three weeks since the association submitted the letter. But the government says it is still being considered. The letter was submitted to the Addis Ababa traffic management office. The city transport bureau has also failed to respond.

A new logistics regulation allows up to 49/51 partnership with foreign logistics companies. Is Eshi considering a joint venture with foreign companies?

JV is allowed for logistics companies engaged in sea, air and land transport. Ours is light package and fast delivery logistics. So JV is not allowed for us.

How much does the absence of e-receipts affect your business? How does Eshi cover the costs, if delivery is defaulted?

Online ordering, online payment, and e-receipts are not active at a national level in Ethiopia. Ethiopians consider online shopping, or e-commerce, as a luxury service reserved only for developed countries. That is acutely wrong. Delivery services extremely benefit developing countries. The purpose of e-commerce is to cut expenses and reduce prices. Companies do not have to open shops everywhere. So, it cuts out rental costs. End user customers also usually visit as many shops, to find a reasonably priced good. With e-commerce, you can find any items at your fingertip. You can order a delivery company, saving your time, energy and money.

The progress slows in Ethiopia, because the digitization pace is slow. But the Parliament is currently working on the e-transaction proclamation. The draft document has been under review for a year now. The Ministry of Science and Technology crafted the document and the Council of Ministers has passed it on to the Parliament. It was said that it would be ratified before the current Ethiopian year enters. But I think it is delayed because the government is busy due to the war.

But even after the proclamation is ratified, is there the technology that interfaces with the payment facilitator, end user, delivery companies, shops, tax authority and other regulators?

Eshi has end-to-end technology that enables the ordering and tracking of goods. The technology also enables us to publish the transactions in excel or PDF file formats.

E-commerce companies also have a similar technology. Ethiopia has all the basic ingredients to kick start e-commerce. We have the laws, graduates, and emerging e-commerce companies. The service quality will improve gradually.

Does Eshi use other payment mechanism like mobile money, tele birr and others, apart from e-commerce companies?

So far, our transaction is largely cash-based. But we are integrating with Fintechs like tele birr, CBE birr and others.

The starting price for delivery of a kilogram of package is 20 birr. It increases by12 birr per additional kilometer and three birr per additional kilogram.

How do you evaluate the competition with other emerging delivery companies?

It is difficult to say there is stiff competition. There are delivery companies that participate in bids with us. A lot of institutions like banks float bids for their bulk delivery contracts. There are only close to six active players.

The DHL, the Ethiopian Postal Service and Balderasu are active in Addis, while there are other startups emerging in regional delivery services. The DHL has no interest in the domestic delivery business in Ethiopia, leaving the market in Addis for us. Even in Europe, DHL works with local companies, specializing on the international market rather.

Close to 100,000 packages are delivered in Addis Ababa every day. Eshi, which delivers 115 packages per day, is comparatively better performing, than other players. Yet, the share of delivery companies is completely insignificant, relative to the demand.

All of close to six delivery companies in Ethiopia, including DHL and the Post office, are delivering less than 6,000 packages per day. The market is untapped.

The delivery demand in regional states is much higher than Addis. We have assessed the demand and mapped delivery services in 100 cities in Ethiopia. There is close to 200,000 package delivery demands in these cities.

Who is filling this demand now?

This demand is bridged traditionally. The Postal Service has some market share, but mostly; people send packages via cross-country buses. But this method of delivery has two major problems. First, it has no insurance if the package is damaged and second, the bus owners charge as they wish. Cross-country busses have no standard pricing for delivering packages.

Eshi is 100percent insured. When a client orders Eshi to deliver a package, the customer declares the value of the package. If it is damaged, Eshi refunds 100percent of the value stated.

Do you work with all insurance companies?

The local insurance industry is underdeveloped, thus, local insurance companies usually do not accommodate our insurance packages. So, we cover the insurance fund by ourselves. Eshi has been incurring cost due tothis. But now, we are communicating with insurance companies. All other delivery companies operating in Ethiopia do not have such insurance coverage, except for Eshi.

Is Eshi using its own vehicles for the piloting phase in Adama and Hawassa?

We deploy our own vehicles to deliver high risk packages. But usually, we use private vehicles which have insurance coverage.

Which sectors have high demand for delivery services, is it exporters, households, or wholesalers? And Ethiopia is ranked low on the logistics index. How can delivery companies improve this?

Our business is last mile delivery. We deliver from shops to end users, or consumers. Last mile delivery is the most difficult business in a given economy. One is due to a lack of precise addressing technology. It is also the most expensive logistics system. So the demand could be consumer goods, medication, and invitation or gift cards.

Last mile delivery also creates job opportunities. Millions of youth can deliver goods door to door. So, it is the best logistics sector for job creation. If we could make the delivery price cheaper, it can activate the economy, and affect millions of lives positively. It is a phenomenal sector.

By how much rate is Eshi growing from a startup to a large enterprise?

Our package delivery business size is growing at close to 10percentper month. It is not an impressive growth but we are making good progress.

We plan to grow by 15 percent on a monthly basis. Comparatively, Eshi is growing faster, because most of the delivery companies operating in regional states are highly affected by the conflict in Ethiopia.

How much does Eshi deliver in Adma and Hawassa?

Our delivery in these towns is just a couple of packages per day, for now.

But Blood Bank, the NEBE, Goh Betoch, Nile Insurance, Ramada hotel, hello market, and Ethswitch are some of our major institutional clients across the country. We do cash-up-on-delivery for our customers. We also provide full insurance coverage, which no delivery company does in Ethiopia. We also have warehouse for e-commerce companies.

Does Eshi directly buy goods and deliver?

Usually customers order e-commerce companies to supply the good. Then the e-commerce company orders us to deliver the packages to the customer who has placed the order. Hence,Eshi does not purchase the packages. The package is purchased by the e-commerce company. Since the customer cannot pay online, we collect the payments and give it to the companies, usually on a weekly basis.

If we directly engage in buying and delivering, it will take a huge capital. The e-commerce companies have the packages and the digital presence. I believe e-commerce should be much cheaper. Some e-commerce service providers give up to 15 percent discount, but the business is just taking up in Ethiopia. It is at very early stage.

Eshi does not want to play the role of e-commerce companies. If there are 40 e-commerce companies in Ethiopia, we do not want to become their competitors. Rather, we want to deliver their packages. But if there are packages not found in e-commerce warehouses and if Eshi can find those goods, we can supply it directly to the customer. Under this circumstance, we receive orders of packages worth less than 2,000 birr.

English Version News

Suzuki vehicle prices explode, shaking up the automobile industry

Yoseph Asfaw, a mid-level manager of one of the branches of Bunna Bank, was excited when he learnt he was eligible to take out a two million birr interest-free loan, courtesy of the performance his branch achieved last fiscal year. He did not hesitate to take the opportunity. After a few weeks of deliberation about what to buy with the money, he decided to purchase a vehicle. His choice was the 2022 model of the Suzuki Dzire, the most sought-after automobile in the car market. He was asked to pay 1.5 million birr.

“Are you sure I will recoup the money within a short period of time,” Yoseph asked the car retailer.

“Trust me, give it one month, and the price will surpass two million birr,” the retailer replied.

The trader was right. The price of Dzire 2022 has shot up to 2.2 million now, a development that helped Yoseph net a profit of 700,000 br in just a month. “You cannot get this money by saving or opening a trade store. And not surprising at all, given the volatility of the market,” said the banker, adding, “I don’t want to sell it as this is a treasure whose value appreciates every second, and the most profitable venture without adding value.”

It is not unusual to see the price of vehicles spike in Ethiopia. Cars are believed to be a big treasure, the same way apartments or houses are. A car costing less than USD 2,000 in neighbouring countries, the Toyota Vitz, costs nine times more in Ethiopia. The high tax on old cars, which could reach 500 percent, was used to justify the hike. Though the same is true for old cars now, the story is different in the case of new vehicles, a category given to automobiles produced within three years of imports.

Three years ago, the government introduced a new tax law to encourage the imports of new cars while discouraging the old ones. Such a reform was meant to make new cars cheaper, though it was a target that never materialized. A case in point is the Dzire 2022, an automobile imported through a duty-free scheme and flooded the market, along with other brands of Suzuki, including Espresso and Swift.

Toyota is still the dominant player in the vehicle market, though traders say Suzuki is now commanding the lion’s share, probably as high as 60 percent in the last two years. It is partly because the cost of new Toyota vehicles is higher than in the past, as older ones were less costly. For the same reason, Suzuki is the most preferred brand for importers now because the lower the cost, the lower the amount of foreign exchange importers needs to get.

“We get the forex from the parallel market with a premium, as banks barely cover the cost of the imported cars. Suzuki has become a preferred option for many importers as it is less costly and brings a better return with a higher profit margin than Toyota, which is expensive and requires a tiresome process to get the forex needed to import it from countries like Dubai,” said an importer.

Last year saw a spike in demand for new vehicles, largely due to the huge amount of finance availed by banks to borrowers eligible to take a loan to buy automobile. During the third quarter of the last fiscal year, 330 million birr was imported, twice what was imported in the preceding quarter. It is also 20 percent higher than what was imported during the same period in 2020/21. The increase is the outcome of the growing demand in the market, according to retailers. But that comes with a cost.

“The demand is way higher than the supply. We are receiving orders more than what is available in our stock,” said Ezra Hailemariam, marketing manager of Tamrin, one of the major market players in the car market and known for importing Suzuki brands.

The change in the global market has also contributed to the spike in price, according to Ezra.

“Over 90 percent of Suzuki cars are imported from India, which is not producing much now due to a shortage of inputs because of the tension between China and Taiwan, which is the major supplier of semiconductors for the factory in India,” Ezra added.

According to a senior company official, Maruti Suzuki said “it could not produce 51,000 units in the April-June quarter owing to the ongoing chip shortage situation.”

India’s largest carmaker, which sold 1.4 million vehicles this year, underscored that the semiconductor shortage is a challenge in planning its production activities.

“The electronics component shortages are still limiting our production volumes. In this quarter (Q1), the company could not produce 51,000 vehicles,” said Maruti Suzuki India (MSI) CFO Ajay Seth in an interview with a local media in India.

The scope of the fighting between government forces and militants of the Tigray People’s Liberation Front (TPLF) along the border of the Tigray region has widened with both sides acknowledging that the conflict has spread to more areas in addition to the area where it initially erupted. The fighting between government and TPLF forces resumed on August 24 after a five-month lull. Though combat had been heaviest around the southeastern border of Tigray, TPLF militants have pushed into the neighboring Amhara and Afar regions, sending residents fleeing. Clashes on the ground and air raids over Tigray have poured cold water on the efforts underway since June to find a peaceful solution to the 21-month war that began following an attack on federal army camps based in the region. The warring sides have accused each other of firing first and shattering the months-long relative calm that has been prevailing in the northern part of Ethiopia following the federal government’s announcement in March of a truce to allow humanitarian aid to be delivered to Tigray.

The federal government has also blamed what it calls the west and Ethiopia’s “historical enemies” for using the TPLF as a Trojan horse to advance their evil design on the nation. Ever since the administration of Prime Minister Abiy Ahmed (PhD) commenced a military operation in Tigray in November 2020 in response to attacks on the Northern Command of the Ethiopian National Defence Forces (ENDF) the country has been subjected to unprecedented pressure at the hands of Western governments, the U.N., mainstream media, think-tanks and rights groups. The U.S. particularly has sided with the TPLF, slapping a slew of sanctions on Ethiopia and withdrawing its benefits under the United States’ tariff-free African Growth and Opportunity Act (AGOA) while it gave the TPLF a slap on the wrist. Furthermore, the U.S. and its allies at the U.N. Security Council have tried over a dozen times to formally admonish Ethiopia but failed thanks to the vote of China, Russia and India. Apart from exerting undue diplomatic pressure, the West has also been waging an information warfare against Ethiopia through a disinformation campaign undertaken by the mainstream media, think tanks and so-called rights advocacy organizations. Its end-game, as some analysts plausibly argue, is to engineer a regime change or if that does not work to coerce Prime Minister Abiy’s administration into accepting to the demands of the TPLF.

It’s not only over the Tigray conflict that the West is pressurizing Ethiopia though. The filling and operation of the Grand Ethiopian Renaissance Dam (GERD) has been a bone of contention between Ethiopia, whose highlands supply more than 85 percent of the water that flows into the Nile River, and the lower riparian states of Sudan and Egypt. In 2020 the U.S. tried to force Ethiopia into signing a binding agreement on the filling period. The Ethiopian government declined to sign-off a U.S.-drafted agreement regulating the filling time of the dam, which Egypt insisted should be completed over 12-21 years, saying it has the right to fill the dam at its own pace and would do so in no more than seven years. Although Sudan initially supported the building of the dam, since then it has taken Egypt’s side on the ground that filling the dam without the agreement of downstream countries imperiled its national security. Again the Security Court, at the behest of Egypt and Sudan, convened on several occasions to consider a resolution calling on Ethiopia to cease filling the GERD’s reservoir and pushing for a binding agreement between the three sides on the operation of the dam but failed to adopt it.

The West’s motives driving its pressure campaign on Ethiopia, its long-standing regional ally, are purely self-centered and zero-sum. It is wary of Ethiopia’s pursuit of an independent foreign policy, which may very well frustrate the accomplishment of its strategic goal in the Middle East and Africa. First, Ethiopia’s apparent reluctance to do toe the West’s line has been perceived to make it harder to protect the interests of Egypt—the cornerstone of its Middle East policy. Second, its attempt to thread a needle as animosities between the West and China ramp up is not appreciated by the West, which feels threatened by Beijing’s growing clout on the global stage. Given Ethiopia has been a beacon of black Africans’ struggle for freedom and could inspire continental resistance to neo-colonialism, the West might deem that forcing Ethiopia to forsake China is instrumental in containing the influence of its top geopolitical rival in Africa.

The West better realize that the essentially undemocratic and unipolar global world order that had prevailed over the last several decades following the end of the Cold War is ebbing. As a country that has never been colonized and is home to a fiercely patriotic people, Ethiopia will never cave in to the West’s demands. Needless to say this requires on the part of the federal government to develop and implement a robust diplomatic policy aimed at nullifying the threat posed by its historical enemies through a variety of tried and tested mechanisms. Some of the steps it can take in this regard include forging a compromise with its adversaries where possible and failing that to foil their destabilizing policies and measures. Ethiopia has the capacity to find a resolution to the political crisis engulfing it. Any nation or organization which has its interest at heart should stop meddling in its domestic affairs and instead support it in seeking enduring solutions.

The abrupt eruption of fighting between government forces and militants of the Tigray People’s Liberation Front (TPLF) along the border of the Tigray region this Wednesday has left Ethiopians apprehensive and disheartened. The resumption of active hostilities shatters the months-long relative calm that has been prevailing in the northern part of Ethiopia following the federal government’s announcement in March of a truce to allow humanitarian aid to be delivered to Tigray. Predictably the warring sides have blamed each other of provoking the hostilities. The Ethiopian government has accused the TPLF of striking first, saying it had “destroyed the truce”. In a statement it issued on the same day the Government Communications Service said, “Disregarding the numerous peace options presented by the Ethiopian government, the armed wing of the terror group TPLF, pushing with its recent provocations, today committed an attack” around southern Tigray. The TPLF though has said government forces and their allies had launched a “large scale” offensive towards southern Tigray early Wednesday after a months-long lull in fighting, adding its forces were defending their positions in the southern front.

The lead up to the current round of conflict portended the escalation of the now 21-month civil war. War drums were repeatedly being beaten with all the sides in the conflict issuing statements pointing to the outbreak of an impending war. The TPLF said on several occasions that the peaceful path to resolve the situation was not working and that it was considering “other options.” The government of Ethiopia on its part accused the TPLF of engaging in extensive military mobilization in preparation to restart the war and called on the international community to condemn the terrorist-designated organization and dissuade it from its ill-fated move. The government of neighboring Eritrea, whose troops have been operating in Tigray since the war began, also pointed the finger at TPLF for plotting to launch attacks on the country to reclaim lost territory.

Since November 2020, the bloody war has exacted a heavy humanitarian toll and ravaged the nation’s economy. In addition to the tens of thousands killed and injured, millions more were displaced, psychologically traumatized and left needing emergency food assistance. Social and economic infrastructure has been totally or partially damaged, including schools, universities, health institutions, and other facilities in the Tigray, Amhara and Afar regions. The economy has taken and continues to take a battering. Its growth, which stood at around 10 percent annually before the conflict, has contracted by half; scores of industries have been damaged while some investors have suspended or totally quit operations, resulting in a surge in unemployment; the undoubtedly huge sums of foreign exchange the war has eaten up has contributed to its dearth at levels rarely seen before and to driving inflation higher. Although it’s difficult to quantify the true cost of the war, the destruction is sure to have cost Ethiopia billions of dollars.

The renewed conflict comes as efforts underway since June following the establishment of a government-appointed committee tasked with starting peace talks hit a snag. The government’s announcement in late July that it was ready to hold talks with the TPLF “anytime, anywhere” and the TPLF’s expression of its willingness to ending the war through peaceful means raised the prospects of peace. The apparent readiness of the two parties to engage in peace talks was hailed as an important initiative locally and by the international community. However, both sides have laid down preconditions that they say must be met prior to the commencement of talks—the declaration of a formal cessation of hostilities in the case of the Ethiopian government and the resumption of basic services to Tigray by the TPLF. They also disagree on who should lead negotiations, with the government demanding that the African Union oversee the process but the rebels insisting that outgoing Kenyan President Uhuru Kenyatta should chair it. While we are not apportioning blame here it’s disappointing to say the least that war has broken out again due to the inability of political leaders to do whatever is necessary to prevent it.

War is generally regarded as something that cannot guarantee a win-win solution to political conflicts. This said some contend that war is not necessarily the worst option as long as it fulfills certain considerations that lend it moral acceptance. Critics, however, argue that all war is essentially indefensible regardless of how justifiable the cause behind it may be. They also attempts to justify a particular type of war as being just serve to rationalize violence instead of constraining it. Philosophical differences aside, many agree war is a failure of imagination. Ethiopians have had enough of the internecine conflicts that they have endured for centuries. The blame squarely lies with political leaders and elites bereft of the desire to settle differences through constructive dialogues. In any kind of armed conflicts it is innocent civilians who bear the brunt, not their architects. That’s why the Ethiopian government and the TPLF need to immediately stop fighting and thrash out a durable peace accord at the negotiating table. Let’s not go back to square one!

Hopes of a negotiated political settlement to the war that erupted in northern Ethiopia in November 2020 following the attack on the Northern Command of the Ethiopian National Defence Forces based in the Tigray region by the forces of the Tigray People’s Liberation Front (TPLF) have been high ever since the Ethiopian government established in June a committee tasked with holding peace talks. The government’s announcement in late July that it was ready to hold peace talks with the TPLF “anytime, anywhere” and the TPLF’s expression of its willingness to ending the war through peaceful means, albeit the fulfillment of certain preconditions, led many to believe that peace was finally within Ethiopians’ grasp. The apparent readiness of the two parties to engage in peace talks was hailed as an important initiative in bringing a conflict that has exacted a terrible toll on the country and its people to an end.

Efforts to start the peace talks seem to have hit a snag lately though. First, this week the Main Peace Committee—the committee the Ethiopian government established to explore the possibility of talks with the TPLF—declared while announcing it had drawn a “peace proposal” that the resumption of basic services to the war-stricken region was contingent up on the creation of an enabling environment once a formal ceasefire is concluded. Meanwhile, the TPLF immediately dismissed the committee’s statement as “obfuscation”, blaming the Ethiopian government for openly defying “their oft-repeated promise to take measures aimed at creating conducive environment for peaceful negotiations”. It further accused it of “taking provocative actions against [Tigrayan] forces” and warned that “it will be solely responsible for the eruption of a second round of war that will lead to the total destruction of the country”.

The condition laid down by the Main Peace Committee in a statement it issued, namely that the declaration of a formal cessation of hostilities is a prerequisite to resume the provision to Tigray of, among others, electricity and telephone services belies the Ethiopian government’s recent unambiguous assertion that it was committed to hold negotiations without any precondition and as such represents a step backwards. While the committee has legitimate security concerns regarding the safety of federal government employees that need to be deployed to Tigray in order to restart the basic services, it should also be mindful of the fact that the continued disruption of the services only serves to exacerbate the plight of ordinary Tigrayans, not the leadership of the TPLF. It needs to demonstrate in deeds its avowed commitment to alleviate the suffering of citizens in the conflict-affected parts of the Tigray, Afar, and Amhara regional states. On its part the TPLF must stop beating the drums of war in the realization that throwing around belligerent statements is counterproductive to peace-building endeavors and just prolongs the ordeals of the very people it claims to stand for.

A host of hurdles stand in the way of the proposed talks. TPLF forces still occupy parts of the Amhara and Afar regions they invaded. Similarly, the Amhara region has ruled out negotiating over the fate of areas its forces wrested from Tigray soon after the war erupted, arguing they were forcefully incorporated under the Tigray region in 1991. The continued presence of the Eritrean troops in some of the territories they occupied in Tigray poses a challenge that complicates negotiations. Moreover, disagreements over who leads the mediation process—the African Union (AU) as the Ethiopian government insists or Kenyan President Uhuru Kenyatta, the preferred choice of the TPLF—can torpedo the entire process.

Trying to bring about a complete end to the fighting in northern Ethiopia followed by a political settlement which leads to a lasting peace is an arduous task to say the least. Nevertheless, no price is too high to pay for peace. Now is the time for the warring parties to show a genuine determination and commitment to peace. The deep-seated antagonism between the two sides understandably makes it difficult to strike a peace deal. Engaging in dialogue and making the necessary compromise requires more courage than continuing the war. Embarking on a peace process should not be about total victory for one party and a defeat for the other. It is about achieving an outcome in which all the protagonists and more importantly the people of Ethiopia emerge victorious. For the sake of Ethiopia and its people the Ethiopian government and TPLF must recommit themselves to peace.

The rule of law is a mechanism, process, institution, practice, or norm which strives to ensure that no one is above the law, everyone is treated equally under the law and held accountable to the same laws, there are clear and fair processes for enforcing laws and human rights are guaranteed for all. Ethiopia has the sad distinction of being a nation with a checkered track record when it comes to upholding the rule of law. Among the different metrics by which a country’s overall rule of law performance may be measured, Ethiopia has particularly fared badly in assuring order and security as well as respect for fundamental rights. The act of turning back some people travelling from the Amhara region en route to the capital Addis Ababa constitutes a clear example of the latter.

For over three weeks now security forces in the Oromia region have been preventing citizens travelling by cross-country bus from the North and South Wollo zones of the Amhara region to the capital through Oromia from getting to their destination if they do not carry a residence ID of Addis Ababa. Federal government officials claim operatives deployed by the terrorist Tigray People’s Liberation Front (TPLF) were recently arrested while trying to infiltrate Addis Ababa using residence IDs and administrative seals it had looted when it occupied some parts of the Amhara region, adding the measure is part of a security operation aimed at thwarting the evil designs of the terrorist group. True, a government’s primary responsibility is to protect the safety and security of citizens. Nevertheless, care must be taken to ensure that the manner in which any operation to ensure law and order does not trample basic liberties enshrined in the constitution.

One such right is freedom of movement. Article 32 of the constitution stipulates that any Ethiopian or foreign national lawfully in Ethiopia has, within the national territory, the right to liberty of movement and freedom to choose his residence, as well as the freedom to leave the country at any time he wishes to. The Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights, and the African Charter on Human and Peoples’ Rights — the international instruments Ethiopia has ratified and in conformance with which the fundamental rights and freedoms specified in the constitution must be interpreted — also afford protection to this right. Absent a duly declared state of emergency, there can be no justification for the indefensible prevention of Ethiopian citizens from enjoying their freedom of movement on the ground that they pose a potential security threat.

Aside from flouting the rights to liberty of movement, the action of the Oromia security forces has other troubling ramifications. First, it creates a perception of discrimination and ostracization in the individuals victimized by the travel restriction. Moreover, the fact that they are unable to travel to their intended destination entails damaging economic and social consequences for them. This is liable to sow the seeds of resentment and down the line to political conflict. Second, it encroaches on the federal government’s constitutionally granted power to regulate major roads linking two or more regional states. Such intrusion into the federal government’s exclusive preserve sets a bad precedent for other regions. In short it spells danger for the integrity of the constitutional order and the rule of law.

Freedom of movement is a fundamental right all levels of government must respect. Any perceived security threat its exercise may pose should be handled in a manner that does not result in the violation of the right and subjects innocent citizens to inconvenience. There can be no sugarcoating the fact that the act of preventing certain classes of people from travelling to wherever they want is an unequivocal infringement of not only freedom of movement, but also the right to equality. As such it is incumbent on the federal, Oromia and Amhara regional governments need to hold consultations on ensuring that everyone travelling from the Amhara region via Anwar Soussa has been the Managing Director (MD) of Safaricom Ethiopia since July 2021. He was the Managing Director of Vodacom DRC and the Chairperson of Vodacash (M-PESA), a position he has held since 2017 until joining Safaricom Ethioia. During his tenure, Vodacom DRC made major strides in operational performance, crossing the USD half a million in service revenue mark for the first time in 2020. The Reporter’s Samson Berhane sat down with him to understand his new beginnings in Ethiopia.

The Reporter: First, tell us about your journey in the telecom sector.

Anwar: I have been in the telecom sector since 2006. But I started in the technology sector since 1996 in Montreal, Canada. I joined Safaricom Ethiopia, the project, when I was in Vodacom in Congo. I was a CEO there. My experience perfectly suited for this type of operation.

Safaricom has been preparing for more than a year to launch service. Why did it take so long? What were the problems that you have faced while doing so?

I don’t call it a problem. I call it a challenge. Initially, when we come into the market, the idea was to launch using ethio telecom infrastructure. That agreement took longer than expected to finalize. As a result, we choose to build our own towers. We did not want to wait. To build towers, you have to find land, import materials like steel and find cement as well as hire sub-contractors. That means you need more time than the initial plan. That is the real reason why it took longer than expected to launch service. Now, we signed a deal with ethio telecom and things are gonna move faster.

Tell us about the detail of the deal. I heard you are going to pay in both local currency and USD to lease the infrastructure of ethio telecom.

I am going to keep the deal private because that is between us and ethio telecom. But there is a dollar component. The reason is, as well all know, there is a forex shortage in the market and to prepare a site for us, they are required to import materials from abroad. We recognize that. We agreed to make the component in dollar for them to make the site ready for us.

So, the negotiation is now over?

Ethio telecom has been a very good partner. The CEO, Frehiwot, has been gracious in terms of engagement with us. Everything is proceeding well. The delay was due to operational issues. How many juniors were available? How fast we can get steel? How fast we can upgrade the site? All of these are operational issues.

When you launch service in Dire Dawa, you have used your own infrastructure.

That’s correct. When we launch service, initially, we are using our own infrastructure. But as we move forward, we will be sharing infrastructure of ethio telecom and build our own in the meantime.

Is there any change in equity contribution of shareholders in Safaricom Ethiopia? Some say, there is. Is that true?

No, there is change.

As Safaricom is listed in the stock market, a change is expected when something new happens. Have you seen any change recently after you launched service?

I don’t think it is possible for you to attribute any change to a certain element. The reality is the World’s stock market has been very volatile over the past six months. There is a war and a global recession coming in. Certain things happening are way beyond the control of a certain company or what we do here in the ground.

What should Ethiopians expect from Safaricom? Many hope Safaricom will come up with a better quality of service with a lower fare.

The pricing move from ethio telecom last year was very strong. They brought down massively. I am not sure if it will be possible to bring down price from what is in the market now. However, in terms of quality, my expectation is that the quality overall in the market will improve. And the reason I say that is because we are setting up a new network and ethio telecom, or the competition, will not stay still, I expect they will bring the best game in the table. Quality of service, both in technological level and in customers’ service, will be improved massively. How customers’ complaints are going to be taken care of? I think these are areas where you see a major improvement.

The price that you are charging is almost similar with ethio telecom. Do you think you can be competitive in the market, while charging the same price, as people expect a lower fare from you?

The price for voice is one of the most aggressive in Africa. And I don’t think there is a room to drop voice prices. So do I think we can be competitive? Yes, I do. The most important thing we want to flag is that we don’t want a price war with ethio telecom. If we start a price war, that means they will automatically react. There is no way there is going to sit by and see us dominate the market because our price is cheaper. I think that will a detrimental impact on the market, not only on us. I don’t think you see a change in terms of price.

The infrastructure deal took more time than you anticipated. The global market is not helping too. Did you make any change in your financial targets, considering the challenges you have faced since you secured the license to operate in Ethiopia? For instance, do you still think it is possible to achieve breakeven within five years, as outlined in your initial plan?

Yes, I do think so. I think the biggest challenge is the global inflation. The price of fuel is increasing. The same is true for cement and steel. All these things are going to be more expensive. I think this element of the business will be very challenging. Yet the plan is still to breakeven within four or five years. But we have to pay attention to the cost.

You are investing heavily in infrastructure development. And can you tell us how far you have gone thus far?

We will continue to invest with the money that we allotted when we started the business. Some places are easier. Addis is easier than the regions. This is because there are a lot of buildings to put on the antennas. So it is simple to deploy in Addis than other areas.

If it is easy, why did you first launch service in Dire Dawa?

That is a small town. It requires fewer sites. It is easy to optimize. The network rollout was very fast.

How long it would take to launch service in Addis?

Six weeks. We believe there is a massive opportunity in the capital, in every element. I have been working in 12 countries. I never had been in a country where a single company dominates everything. The market will be split.

Is there any place that you want to capitalize on, especially an area where ethio telecom has a little presence?

That is a nature of businesses. You grow until there is no place to grow.

How long it would take for you to be independent from ethio telecom?

I don’t think we want to be independent. The reason I say that is because old days where everyone builds its own infrastructure are gone. You have to share infrastructure. That makes more sense because that does not have any impact on your competitiveness. Why do you build a fiber where there is a fiber? That will be a waste of money.

There has been a social media outcry against your recruitment process. What is your reflection on this?

To be honest, I think it was not only on the recruitment process but also on the language we are using. It was also about distributors and how we are allocating distributors across regions. It was also about the religious mix of what we have in the office and what we have employed everywhere. There were a bunch of requests the activists raised with us. So, we did not respond immediately because we were supposed to understand whether these are true or not and see ourselves if there are problems. To be honest, I don’t think the problems are as acute as people are saying. What they did say is to be careful. For instance, if we go to Oromia, we have to use Afan Oromo. We have to pay attention to laws. We have put signs saying coming soon. It was us not being sensitive. We met guys behind the campaign. They were very moderate. None of them want to hurt Safaricom. They want what we do to be fair. They did not make extraordinary demands. That’s why we are comfortable to engage with them. I understand we have to be sensitive to the history, the culture and the current politics without going too far. It has to merit-based. Everybody coming to the company should be the best of the best. We have received a lot of advises from the government. All of them said “you must choose the best but be careful.”

Do you think it is possible for Safaricom to apply meritocracy in light of the current situation in Ethiopia?

I think there has to be a meritocracy. The qualification of the candidates has to be there. There should be no compromise. However, as we choose candidates, the priority must be given to the people within the region. It is not appropriate to start shifting from one region to another. Not because of other issues but language considerations are critical. People have to speak the language of the area where they are working.

Now let us talk about mobile money. I know you are in the process of launching M-Pesa here. Do you see any progress from regulatory body in introducing a legal framework to govern the sector?

The legal element is going fine. I think it is gonna be available very soon. Our shareholders are engaging with the government. From operational perspective, things are going well. We have put the app in place. We have put configurations in place. Everything is in a good shape. In technically perspective, we will be ready to launch service in the next three months.

The approval process of the bill may take another three months. Do you think that will have an impact on your plan?

No. We got so much to do. We have 25 cities to cover. We have massive network to build.

Do you think you can repeat the success of M-Pesa in Kenya here in Ethiopia?

Absolutely. Kenya is particularly amazing story. Wherever we launched M-Pesa, we were successful and we are leading the market. So we don’t see any way it is not going to be successful in Ethiopia.

Ethio telecom is already advancing in the mobile banking market. Are you expecting fierce competition when you launch M-Pesa?

I do expect very strong competition. They have done a great job in recruiting customers and strengthening the network.

From what I have observed, ethio telecom is taking an advantage of its link with public offices to facilitate payments in the public sector? Have you get any promise from government officials whether you will get the same opportunity when you launch M-Pesa?

We are talking them to now. There is no one said we are not going to get this opportunity. Yes, they had a one year head start. They have done great job in services they have launched. Yet I believe we can catch up.

How is the war in North Ethiopia affecting you?

We have a huge amount of work to do. I think it will slow us down in certain areas but we will continue doing our work in other areas. But everyone is sad to see the resumption of conflicts.

Are things in place to launch service in North Ethiopia, particularly in Tigray, if the war ends?

We will be ready as soon as communications are stored and get the blessings to go back in. We want to reach all over Ethiopia.

My last question is on repatriation. Many international companies usually complain about the difficulty of repatriating profit in Ethiopia. Some say it takes over a decade. How is your plan in that regard?

Repatriation is not a big issue. The issue is finding dollar to buy equipment after the investment window closes. After our money runs out, we need to get forex to buy equipment. Regarding repatriation, we knew the issues when we came. If it takes 10 years, it takes 10 years. We gonna be here longer than that. Of course, we want to repatriate but we are here for long term.

Oromia without fear that they will be turned back before getting to their journey’s end. Given upholding the fundamental rights laid out in the constitution is vital to assuring the very survival of Ethiopia as a cohesive polity, overstepping the constitution in the name of containing elements bent on wreaking havoc cannot and should not be tolerated. That is why it’s imperative to put an immediate stop to the blatantly unconstitutional violation of freedom of movement and see to it that it’s not repeated ever again. Goitom Tsegaye is deputy chairperson of Arena Tigray, an opposition party popular in Tigray. He has been voicing his concern over the war in Tigray since it broke out almost one and half years ago. The second time the conflict started, Goitom found it heartbreaking. He thinks that in carrying out the eagerly anticipated negotiations between the two warring groups, the African Union did not fully fulfill its obligations to the organization. The Reporter’s Selamawit Mengesha sat down with the opposition leader to get more of his perspective on the recent resumption of hostilities.

The Reporter: Let’s start with the war that erupted anew this week. Before the battle resurfaced, there were talks of a peace agreement. Is there still hope for negotiations?

Goitom: It is heartbreaking that the dispute has resurfaced this week. Since it began, there is a potential that it will continue, although much will be lost if it does.

War’s casualties are well known, and hopefully we have a government that cares enough about its people to put an end to it. They should have learned from their previous mistakes and avoided them, in my opinion.

Both parties demanded that mediators be appointed. What was the reason the two parties couldn’t agree on who should undertake the mediation?

Essentially, I believe there is one thing we should all remember: everyone must be fair and impartial while looking at things.

In a war, not everyone carries a weapon, but what we’re seeing in Tigray is people lacking necessities such as banks, water, transportation, telephones, and electricity.

We were taught to believe that these services were destroyed during the war and that the government was unable to repair them, but it is now clear that this was not the case all along.

According to the Tigray regional government’s discussions with the EU, the federal government is leveraging these necessities when it could simply provide them to the people; it’s using them as a weapon of sorts.

War has laws, but the warring side is separate from the people. The people of Tigray are also Ethiopian citizens; hence the administration is harming its own people. Personally, I believe it is not the best way to proceed.

I believe that the federal government should have learned from its failures from the beginning. I don’t think initiating a full-fledged war with the TPLF was the best course of action. Instead of attacking, it should have been defending.

It was not a prudent move, especially with other powers involved. What I mean is that the items the Tigray regional government is requesting from the federal government are essentials for the people.

Both parties bear responsibilities for doing the right thing by the people. I’m not sure why it’s framed as a difficult choice. It is for the people of Ethiopia; hence the government should have established a consensus for its people by now.

To return to the subject of the negotiations, the government already pledged to begin them without any preconditions. However, the offer was to negotiate solely with the TPLF, without including Amhara, Afar, or even Eritrea. Do you think these groups should have been taken into account during the negotiations?

I believe the government’s strategy was flawed from the start. We’ve observed unlawful acts such as Tigray transferring land to Amhara with the assistance of other forces, so what has the Amhara area lost from Tigray?

We’ve heard on several times, particularly in the case of Welkait, that the region is attempting to reclaim their land. Is it even their land is the question?

The structure of the regions, in my opinion, is fairly apparent.

I say this because there was a region called Show that later became part of the Amhara and Oromo region, a place called Bege Medhir became part of the Tigray and Amhara region, and if Welo became part of Afar, Tigray, and Amhara, then there is really nothing new that happened between Tigray and Amhara, unless there is a belief that if I am living here, there is no one else there, which in that case makes comprehension difficult.

Ethiopia and its land are inextricably linked, so stating the land was mine and I want it back makes no sense to me. Questioning the demarcation system is understandable, just as arguing “using language as a way of defining regions is wrong,” but claiming land in the same country is not.

Ethiopia’s land is reserved for Ethiopians. Sitting and talking with Tigray and the federal government makes sense because the government is clearly offending Tigrayans and requires mediation.

Because Eritrea was involved in the attack, having Eritrea participate in the talks makes more sense than having the Amhara region participate in the talks.

Understanding this, I believe, is critical.

As a representative of Tigray, Eritrea and the federal government should have discussed Bademe and other issues. However, in actuality, the federal administration has not been representing the people and territory of Tigray.

Negotiations have been attempted by international groups. We’ve seen people like Obasanjo come to the country and make attempts, and many people were optimistic that the talks would take place. Do you believe the conflict resurfaced because those bodies failed to carry out their duty properly? Or do you believe they carried out their responsibilities correctly?

I believe we should have taken the initiative.

Both the federal government and the Tigray regional government should have demonstrated interest in the negotiations from the start; only then could other groups assist in getting the talks started.

According to my knowledge, they did not fulfill their obligations, particularly the African Union. Aside from creating articles and laws, I do not feel the AU has a consistent and capable ability due to one of their articles; Article 2H, titled humanitarian integration.

Although the article has been ratified, the Union lacks the resources to put it into action. According to that provision, the Union has the right but not the resources to intervene in cases of humanitarian rights breaches.

For example, the AU did nothing to address the Tigray situation; there were words but no action. For these reasons, I didn’t have high hopes for the AU. It still has a long way to go, in my opinion.

Other international organizations with influence and power have their own military intervention regulations as well. The west has previously attempted to exert pressure on the administration, but international organizations such as the EU and countries such as the US are preoccupied with other matters such as the Ukraine-Russia war.

They have the ability, but their focus has been diverted away from Africa. They, too, lack consistency, as evidenced by their actions in Ukraine. As a result, I don’t believe they’ve done their part

They have the power and capability, and yet here we are.

Who do you believe is to blame for the re-ignition of the war? Could the difference in negotiation beliefs be the cause, or do you believe the absence of the Welkait and Humera concerns is a contributing factor?

As I stated at the outset, if we refer to the Oromia area, we need to know which cities and counties comprise that region. That is, the problems of Tigray and Welkait should not be a problem. I cannot argue that the requirement should not be met because the federal government granted the land without Tigray’s approval and is now requesting that Tigray accept it.

People who lived there before are now refugees. People are unable to use their own funds because banks are closed. All of these difficulties should be considered as prerequisites.

It’s not difficult to grasp, even for the federal government. People are hungry, so shouldn’t that be addressed first as a prerequisite before any negotiations begin?

I cannot accept the idea that there are no prerequisites. Negotiations would be conducted with a boot on the people of Tigray if those demands were not met.

I don’t have any information on who restarted the war. To be certain, I would have to live there. I am like everyone else, listening to all sides’ arguments.

What will the people of Tigray face if the fighting continues? You’re already aware of the issue. What do you think about the present humanitarian crisis?

I don’t believe that anything positive can come from conflict.

War will take innocent lives, destroy property, and deplete the economy, and what could be worse than that? Tigrayans are at a significant disadvantage.

They are under attack from their own government, former foes such as Eretria, and adjacent territories such as the Amhara region. It’s painful to see how something that should have been resolved amicably has turned into an injustice against the people of Tigray, which is also an injustice against the rest of the country.

Hopefully, people will realize this soon. I’m sure there will come a day when our empathy will be tested. Ethiopia will pay a high price as a result of the conflict. In the war, there are no winners, but all are losers.

Do you believe the constitution can deescalate and resolve the conflict? What are your thoughts on the matter? Is it possible to resolve the disagreement based on the current constitution and the new statute established by the federation under which regions could decide directly to be regions?

There aren’t enough people organized to hold a referendum. Furthermore, Tigray has no representatives in the House of Federations. How will Tigray make its case? Who will be Tigray’s representative?

At this stage, it would be child’s play; the most serious offenses have already been committed. Atrocities in violation of the constitution have occurred. International agencies have branded it ethnic cleansing, and some have even called it genocide.

So this is pretty strange. On paper, the constitution is just and fair, but its implementers are not.

Is it truly conceivable to exclude Eritrea from the war in the future if Eritrea’s government refuses to withdraw its troops? Will their departure solve the problem in any way?

I believe we must consider how they got to be involved in the war.

Did the federal government request that its troops participate? Was the Parliament able to represent them? I mean, there are multiple options, right? Who delegated authority?

These points must be addressed first.

It would be pointless to question something that has no legal foundation. Was a formal agreement reached between the Ethiopian government and President Esaias? If so, what were the terms, and where are the documents?

Is it even conceivable for an Ethiopian Prime Minister to pull out such a deal out of the blue? He cannot. To begin with, it must go past Parliament.

As a result, the question of whether Eritrea should withdraw has become extremely convoluted, with numerous loose ends.

We have observed that since the beginnings of the war, a large number of Tigray-born residents living in various cities throughout the country have faced discrimination and harassment everywhere they go. They couldn’t return to Tigray due to the war, and during this time, everybody from Tigray or of Tigrayan ethnicity was in a plight. That had been subsiding to a degree in recent months, but now that tensions have resurfaced, what does this mean for Tigrayans living around the country?

This is a clear problem. Kibrom authored a book and was detained because of his ethnicity; he traveled to Afar and got into a lot of problems; I’m using him as an example, but there are many others like him.

What is the UN peacekeeping mission doing now? To be honest, I don’t think it was even this horrible during Derg’s reign.

Innocent people are openly mistreated based on their race, with some even losing their lives as a result. Tigray is not being represented by the government, and this must change. It must reflect on its previous activities.

We are on the verge of a major crisis, which must be examined thoroughly.

It is unacceptable to feel unsafe and to face severe discrimination in your own country because of your heritage. There was a glimmer of hope. As you stated, the current circumstance may pass as it always does, but it may leave wounds and scars that will not go as readily.

Do you believe Ethiopia will be restored to its former glory in the future? What is the hope in a situation when many already believe Tigray is no longer a part of Ethiopia or that it would have a referendum? Do you believe Ethiopia is one of them?

It depends on the next steps we take.

As far as I am aware, Tigray is still a part of Ethiopia. Even Eritrea would have been a part of Ethiopia if not for the Adwa war and its consequences.

Right now, looking at the government’s actions against the people of Tigray, such as refusing to reopen banks, the internet, and transportation, it appears that there is a power that does not want Tigray to be a part of Ethiopia, which is incorrect. The China Foundation for Poverty Alleviation (CFPA) is a non-governmental, non-profit organization that was established in 1989 as one of China’s largest charity organizations dedicated to poverty alleviation.

The foundation, among other things, provides healthcare and nutritious food to vulnerable populations, with a focus on mothers and children; supports education programs; provides scholarships; builds infrastructure; and distributes stationery to help communities thrive.

The Ethiopian Civil Society Organizations Authority registered the Foundation in 2019, and it has been actively working since 2015 by collaborating with local and international non-governmental organizations on various projects such as school feeding, clean water, women’s economic empowerment, and refugee support. Sisay Sahlu of The Reporter spoke with Emma XiaocenXuang, the country director of the foundation’s Ethiopian office, about some of the project activities in Ethiopia.

The Reporter: It is unusual to see the Chinese government involved in such areas, particularly in poverty alleviation. What are the goals of establishing this foundation?

Emma XiaocenXuang: This is the basis of a total charity organization founded in 1989.

The Chinese government’s fund for social enterprises provides 99 percent of its funding. In China, the foundation works in the fields of health, education, rural development, and livelihood. We are now investing in similar international engagement areas.

In Ethiopia, our official implementation agreement began in 2015 in collaboration with Ethiopia’s First Lady, Roman Tesfaye, specifically to begin school feeding in Addis, in over 43 schools.

We were collaborating with a local organization called E-network at the time, but they changed the name to Hailmariam and Roman Foundation. We were officially registered as a civil society organization in Ethiopia in 2019 after working with this foundation for about four years.

We started the registration process in 2017, but the government changed, so we put it on hold. We restarted in July of 2019.

What is the foundation’s international experience?

In 2005, we began working as an emergency aid provider, and in 2015, we officially began in Myanmar and Nepal as our first steps in Asian countries, with Ethiopia becoming our first African destination.

We began our project in Ethiopia and Sudan in 2015. However, we chose Ethiopia as the location of our regional office.

The Chinese government has extensive experience in poverty alleviation. What is the secret to their success? Are there any suggestions?

One component of the foundation is poverty alleviation. The People’s Republic of China has a very strong system, and China is very good at mobilizing all of the parties involved, such as companies, non-governmental organizations, the public, the government, schools, and research institutions, to engage in poverty alleviation.

All of those parties are working within this system, and there are numerous methods and areas for collaboration in the education and nutrition sectors. We incorporated the school feeding system into children’s basic rights and the education system, not just the Zero Hunger plan.

We also give quotas to poor areas, particularly at China’s two best universities, Tsinghua and Peking. According to policy, we provide a quota for the poor. This is because if you want to end poverty, you have to invest in education.

Similarly, we must construct a very strong housing system to ensure that all citizens receive the full package so that they won’t have to stress over things like, “Oh, I’m sick right now, so I’m going to the hospital and spending a lot of money, since the government is covering most of the cost.”

Both the government and non-governmental organizations offer benefits like insurance.

For instance, I was born in China. Both the government and my company provided insurance for me. However, I believe that identifying the poor is the most difficult task because doing so is the first step in providing aid to the underprivileged.

In this regard, the Chinese government created a system that can store all of a person’s information on a card that serves as an ID card. You can discover a person’s complete information using this card.

A person also has a complex set of criteria and evaluation standards.

If you have an income of up to 2300 Chinese RMB, that means you are getting out of poverty, and the next step is to observe and follow-up for a few years until you make steady progress out of poverty.

If they are in an accident or become ill, they will be forced to return to poverty and their names will be added to the poverty list again. So this is a national system implemented with strong leadership and complex evaluation criteria to identify, follow-up, and evaluate the entire system.

How can we balance the demands of the expanding population with the available resources? Is there any advice, particularly with regard to the food system?

You know, it could be the geographical location, but if you look at China, we have a very large land area. Even the climate in the north and south is vastly different. People in the south, for example, prefer rice as their main food, whereas people in the north prefer wheat. The majority of Ethiopians consume Enjara.

I believe it is about food diversity and nature’s gift. I couldn’t find any seafood in Ethiopia. Everything is imported. So, in comparison to geography and location, it is the gift of nature that I want to emphasize.

The second point to mention is that China has made substantial investments in its agricultural sector. We simply devised a number of methods for producing more food while working with limited resources.

For example, there is a well-known Chinese man who developed a type of improved seed by changing the genetics and received an international award. In the same situation, this new seed can produce more than ten times the yield of the original local seed.

Thus, we put more time, effort, technology, and other resources into our endeavors. The northwest region of China is characterized by extremely dry land devoid of any water. In order to effectively use rainwater for farm work during the dry season, we constructed a water sailor.

The other thing we do is drip irrigation, and we make good use of all the available resources. There are just too many aspects to it for me to list them all now.

When the land is distributed in pieces, the government in some places tries to use the entire land and bring all of the necessary equipment to do the farming all at once, saving money, time, and human resources while producing more products.

What can Ethiopia learn from Chinese agricultural practices in order to make better use of its resources?

The most important industry is agriculture. Ethiopia is also dependent on it.

I noticed teff is a main product, and it appears that farmers are having difficulty making a living from it. I recently traveled to the Amhara region, Somalia, Oromia, and other parts of the country. I noticed how friendly and hardworking the people are.

Their farming equipment, however, only uses cows; such farming was abandoned in China more than 30 years ago.

When I see this practice, I think to myself, “Is it possible for Ethiopia to develop without using adequate technological instruments?” And I believe it is preferable to bring more technology and do it more efficiently.

I want to be modest. I sometimes admire how they learn this from their ancestors and local wisdom, even knowing the direction of the wind and when it might rain.

However, because I am not an expert in the field, it is difficult for me to speak out without conducting an assessment and a survey. In China, there are numerous agricultural universities with a large number of professors and college students working in the sector.

They are professionals who are learning from both abroad and at home, and they provide an excellent representation of Chinese planting culture. Farmers are constantly being introduced to new cultures, technologies, and skills. We also organize farmers into groups to teach them how to plant properly in order to produce more products.

Another experience is that you are aware that individual farmers are extremely vulnerable and lack the clout and knowledge to bargain with the market and the upper chain. They only sell the original fruit for a very low price. They put in a lot of effort and got very little in return.

There is something in China known as a “cooperative” or “organization.”

It is a unified organization made up of all farmers, and the farmers choose just one or two people to lead their organization and send representatives to determine the prices of all products.

They bargain to determine the market price, and if they work together and make a profit, they split it.

The majority of Chinese practical and recognized engagement in Africa mostly takes the form of investments, loans, and credit provision. Humanitarian commitment to Africa is little known, particularly in comparison to the Western world. What prompted the Chinese government to get involved in such foundations and poverty-relief efforts?

The first point I’d like to make is that the China Foundation is a non-governmental, non-profit organization, and we take great care when discussing political issues. We are always neutral and on the side of the vulnerable.

My personal observation is that, initially, international aid is provided all over the world, particularly after World War II. So there is a tradition, and 40 years ago, China suffered greatly and received significant assistance from Western and other developed nations.

They invested heavily and brought some goods to China. You know, for example, for people like me, I have received an English education from the UNDP.

China was the first recipient of aid, and now that the country has matured and can no longer ignore these countries, it is time for China to accept responsibility.

So, doing business is one thing, and taking on social responsibility is quite another. There is no conflict, and we must proceed.

You earn money and support your people there, but you must invest locally to support the local community, which is natural. Here, we share common sense and concepts with both the government and the general public.

But, you know, because we only recently developed our economy to support the Chinese public, the concept of social responsibility is something that comes from a good heart. China has done a lot to eradicate extreme poverty, but poverty still exists, and people are becoming wealthy in a very short period of time. We sometimes solve the poverty problem, but we still need to work on the nutrition problem.

We can’t solve it quickly because it’s a long-term process.

However, the Chinese government is always concerned with the need to do something for the locals, and they encourage businesses to assist the locals and take more responsibility. It also encourages companies to invest abroad while also taking on social responsibility.

The funds for this foundation did not come from the government; rather, they came from the South-South cooperation initiative.

How much money have you put into Ethiopia?

We used USD two million this year, but depending on the project, the fund may grow if the situation allows us to move forward.

What have you done in Ethiopia thus far?

We want to do a lot of things, but some of our plans have to be put on hold, not only because of the COVID-19 outbreak, but also because of the conflict in Ethiopia.

We are now investing in education, especially in school feeding, panda bag, wash, and solar light projects. But school feeding is the first thing we’ve focused on because we believe the children deserve it and that it’s a basic human right.

In addition, we intend to construct the school kitchen and provide cooking supplies for the students.

We have received funding for it, but we have yet to make a decision.

The city of Addis Ababa has adopted the full standard of cooking that we developed based on Chinese experience combined with the first lady’s local experience. Initially, it was 40 birr for two meals (breakfast and lunch) per child.

We recently visited the Oromia region and plan to visit the Amhara region; we simply want to share our limited resources’ experience, models, and any other relevant information.

Our main goal is to create a model and share it with the government and other non-governmental organizations (NGOs) that want to get involved and contribute to the local community.

Do you believe this school meal can be sustained?

Of course, we will conduct an evaluation, and once we see how the school feeding program is working, we will not suspend it for at least three years. We need to ensure that once the program is running smoothly, we can extend it for more than three years.

But our aim and goal is to keep this school feeding program running from kindergarten to grade eight, and that is how we will proceed.

However, if the government says, “We have money and we don’t need you anymore,” we suspend it and shift our focus to other sectors.

Addis Ababa has started the program, but if you look at mothers’ cooking, you will notice that they only use three stones in the pot to cook the sauce, which consumes a lot of energy and is bad for their health.

They must get up early and are paid very little. As a result, we are attempting to provide more integrated and comprehensive support, such as building and maintaining the kitchen as well as providing cooking materials.

We commissioned some Chinese construction firms to create the design, which we have already implemented in one school.

It is a pilot project, and if it is useful and effective, we will undoubtedly expand it. However, the first step is to obtain electricity in order to provide modern cooking materials, which can also save energy.

How are schools chosen for this project?

We communicate and collaborate with the government, and they know which areas and schools require the most attention. We will go there on the ground and compare one school to another based on their recommendations.

Are you planning anything else?

Yes, there is a Panda Bag project that aims to provide kids with school bags that contain more than 100 school supply items, such as lunch boxes, water bottles, hygiene items such as soap and toothpaste, and all the necessary materials for the students.

Every year, we conduct an assessment by asking children, teachers, parents, and members of the local community what kinds of items they most need and which items they do not want.

We need to make more adjustments if any item is more needed. We make every effort to avoid any political or religious content in this gift. The donation was made in collaboration with the Ministry of Education.

We will send the entire quota to the Afar and Amhara regions this year because they are affected by the conflict.

What exactly is the challenge?

Of course, there are numerous challenges. Each project has its own set of implementation challenges. We have to buy the panda bags from local factories when we need to provide them to the children. We talked, argued, and bargained about the price and shipment from China with them during this process, because we couldn’t find the item in the local market.

Actually, we made it easier for you to invest in it in the local market, but you couldn’t find the right quality.

And something that worries me is that when we try to collect some items from the local market, I notice that they are coming from India or Turkey, and I believe that if we need to invest in the local market, we should get the materials from here, because buying imported materials is very expensive.

Of course, not this year. We paid nearly one million birr per year for the damage in the previous three years because we did not receive the tax-free letter. However, we received this letter this year. This entry was published on August 1, 2010. Yohannes Benti (PhD) began his career as a chemistry teacher for a high school in West Oromia in 1992, the same year he got his degree in chemistry from Addis Ababa University. He has been the president of the Ethiopian Teachers Association since 2009, having been elected three times. He is the lobbying group’s longest-serving leader, having ruled over it for more than a fifth of its existence.

He immediately became an active member of the Association. Before getting his master’s degree in Educational Planning and Management from Addis Ababa University in 2005, he earned a second bachelor’s degree in law from a private university. While running the Association, he got a certificate in Advocacy and Citizen Management from the Coady International Institute in Canada and a PhD in Educational Policy and Leadership from Addis Ababa University in 2019.

The Association has 700,000 members at all levels. For the past six months, university instructors have been protesting about inadequate remuneration and other difficulties, but the government appears to have mainly ignored them. They have even vowed to strike in the coming month if the administration does not present a satisfactory solution.

Yohannes is the president of the association that represents each university’s associations, as well as a member of the Board of Education International, a 32-million international union organization. The Reporter’s Samuel Bogale sat down with him to discuss the concerns of lecturers and the education sector.

The Reporter: What compelled university academics to issue an ultimatum as they request the government to make an adjustment on salary and work grade? Can you tell us what they asked, and why they didn’t get a response?

Yohannes Benti (PhD): The query from university lecturers is on Job Evaluation Grading (JEG) and its implementation, which the government decided to impose for all civil servants in 2019.

There were approximately 65 salary scales among civil servants when the government agreed to reduce these scales in 2010, but it was later reduced to 22 scales in 2019 and applied immediately.

Since 2016, the Association has represented both general education and university teachers in the study to implement the JED on civil servants.

We detected a problem with the scales and wages of general education instructors when it was brought to us for comments in 2019, soon before implementation. We later requested an adjustment to increase their grades from the Ministry of Education, which then met with the Civil Service Commission.

During the process, the requirement for university instructors was disregarded.

What substantial modifications were made to the pay scales for general education teachers but not for university lecturers?

The highest work grade for teachers, regardless of experience, was only six. When the JEG was established, we asked the government to help them improve their grades, and they eventually made it to grade nine.

These are the salary adjustments that university lecturers did not have the opportunity to make. High school teachers with a bachelor’s degree currently earn more than 12,500 birr per month, or 1,400 birr more than university lecturers.

The higher the grade point average, the better the salary.

What has been the reaction of university instructors since then?

They have been complaining during our series of meetings since its deployment in 2019, and have even requested back pay.

Last year, the associations at each university formally developed a list of approximately 14 questions. Our association was then part of a committee that made the requests to the then-Ministry of Science and Higher Education, which was later dissolved before responding to our queries.

The petitions have since been passed on to the Ministry of Education, which is now the regulator of Ethiopia’s universities.

They had complained not just about the JEG and salary scales, but also about overtime pay, consultancy fees, housing allowances, and tax-related difficulties.

Housing has long been a demand of the teachers, and the government has always claimed that it is taking action. So far, how has it been?

Since the implementation of a directive in 2016, teachers have been given preference for housing at their places of employment, either by building on a plot of land or by purchasing condominium homes in cities like Addis Ababa.

University academics are excluded from this due to claims that they were receiving housing benefits, and their universities may be in a better financial position to have their own buildings and house the teachers. However, some city administrations, such as Addis Ababa, have already started offering housing subsidies to their general education instructors.

For teachers, a home is not just a place to live but also a place to work. Regions like Oromia have long been doing outstanding work in providing teachers with houses by giving them land to build on. In Addis Ababa, some 5,000 instructors were also given condominiums.

For the obvious reason that many other people of the community also urgently require homes, the housing question does not receive a prompt response. However, up until the end of the previous year, roughly 110,000 teachers received land on which to construct homes, along with a few condominiums.

The government was recently warned by university teachers to respond to their inquiries or face a strike by the end of September. What is the position of your association on that?

Discussions can help solve issues. Such actions have a significant negative influence, thus we don’t advise them. We should keep asking and be open to the strong arguments we hear while at work.

The administration views raising the scale and compensation as a difficult task, given the current economic climate. The Association also understands the situation.

The homogeneity of pay across various universities is one of several other issues that are currently being addressed. Our Association is attempting to mediate disputes between the government and educators. Both the things that the nation can change and the things that should be put on hold should be done.

Threatening with prerequisites is useless. We condemn that.

The government has been supportive of general education teachers at primary, secondary, and vocational schools, including acts such as granting land for them to build their homes.

We will continue to request the same perks for university instructors.

The government recently announced that universities will have autonomy, beginning with Addis Ababa University this academic year and expanding to ten universities in two years. What are your thoughts on this development?

The proclamation for university’s autonomy has been in existence for a long time. It is unclear how it would be used at all universities at this point, but they are starting with Addis Ababa University and expanding to other campuses. That is something that universities would like as well.

Several teachers work at schools, primarily private ones, despite not having completed the teachers’ training program, also known as the Post Graduate Diploma in Teaching (PGDT). Who are the association’s members and who are the teachers?

Any educator working at any institution is eligible to join. A teacher is someone who possesses the necessary credentials, such as the necessary training, education, and capacity. The worldwide standard is also being followed in our nation.

Not everyone who attended school for a certain field of study is qualified to teach. Additionally, it is essential to possess the required pedagogical skills. Teaching abilities and expertise should be present.

You can’t teach English because you studied it. This isn’t just a problem in private schools.

Do government schools hire teachers who have not received PGDT training?

Sure. When schools experience a teacher shortage, one option is to train applied science graduates in PGDT and hire them in schools.

Initially, the goal was for these graduates to be trained and deployed, but due to an acute shortage of instructors, they were authorized to begin teaching immediately.

This is an issue in both private and public schools. After much deliberation, the government decided to require instructors in both private and public schools to complete the PGDT program.

The requirement that teachers need to fulfill after completing PGDT training has actually been a part of government legislation for quite some time. This training is offered by a small number of universities to all teachers, domestic and foreign. Private schools will be required to pay for their own staff training.

Teachers in universities and in general education are unemployed in northern Ethiopia’s conflict zones. How is your organization supporting these educators?

University professors from the universities in the Tigray Regional State would be able to register online and request reassignment, according to a statement from the Ministry of Education.

Even while we know that some lecturers accepted the risk and continued to work, there may still be individuals in the area who are unable or reluctant to do so.

We have a list of the teachers who were displaced in relation to general education teachers. We are giving a small sum to a few of them as a sign of solidarity.

Our request for assistance in reassigning 43 instructors was made to the Ministry of Education and even the Ministry of Finance, but we heard back that neither the Ministry of Education nor the Ministry of Finance oversee any elementary or high schools.

We will continue to support them while putting pressure on the government to transfer them to any school and location around the nation.

How is the Association, a significant player in the education industry, reacting to the most recent changes and new rules?

The education reform research, which began in 2016, was the catalyst for reform. The public then debated it in 2019 prior to its implementation. University education was expanded to four years, and a national high school graduation exam was administered in grade twelve. In Ethiopia’s justice sector, Tamiru Wondmagegnehu is a colossal figure. He has been working for fifty years and has witnessed four regimes in addition to becoming a walking library. He has a master’s degree in legal studies and international law.

He started out as a judge under the imperial regime and eventually worked his way up to become the vice president of the Supreme Court, Special Court, and High Court under the socialist Derg regime. However, he was detained along with three other Supreme Court justices when the EPRDF seized power.

Following his release from prison, he founded the Tameru Wondm Agegnehu Law Office, which rose to prominence in the nation. Ashenafi Endale Of The Reporter sat with Tamiru to talk about Ethiopia’s legal system.

The Reporter: What similarities and differences can you find between the legal system, the institutional makeup of the judiciary, and its operations under the imperial rule, the socialist Derg, the EPRDF, and the current administration?

Tamiru Wondmagegnehu: The Ethiopian legal system can be divided into four periods: before 1900, between 1900 and 1941, between 1941 and 1974, and since 1974.

Since Derg, we have been ruled by autocrats akin to the French Revolution. Under these regimes, the courts have been altering their characteristics and duties.

Ethiopia’s triumph at Adwa falls under the first category because it is known around the world and has received attention. Four diplomatic consulates started operating right away in Ethiopia. Ethiopia became the only nation of color to be acknowledged under international law.

Following the 1648 Westphalia treaty, Europe came to the conclusion that there was no other nation state than Europe and decided to establish a European nation state. Therefore, only European nation-states were subject to international law before 1900.

According to international law, Muslims and Blacks in particular were not eligible. That is why Europe began its colonization of the western hemisphere, including its policy of rushing to conquer Africa.

No international law imposed sanctions on Europe. They consequently run ferociously to satisfy their need for resources and markets. Ethiopia was the only African nation at the time to have created its own state boundary.

In circulars he sent to England, Germany, France, and Italy, Emperor Menelik described and mapped Ethiopia’s active boundaries. Ethiopia did not draw its border with other African governments, but rather with European invaders. At the period, as to this day, Ethiopia was surrounded by European colonial governments.

What modifications were made to the foundational rules of justice by the regimes?

Fetha Negest, a 500-year-old written code of justice in Ethiopia, was created under Zerayacob’s rule. However, the zufan chilot (the king’s court) was the only institution at the top until 1900. All the officials of the kings judge matters according to their ranks.

Foreigners began to enter Ethiopia after 1900, and Fetha Negest was no longer useful for adjusting to modern rules. The first cabinet was founded in 1900 by emperor Menelik.

The emperor was under pressure from the foreigners, particularly the French ambassador, to create a consular court. Foreign judges were therefore permitted to sit as judges alongside Ethiopian justices after 1900. The consulate court operated from 1900 until 1941.

Emperor Haileselasie I disliked the consulate court system when he returned from exile in 1941. Thus, in 1941, he issued the Negarit Gazette’s founding proclamation for the first time. The second Negarit, which announced the development of a modern legal system in Ethiopia, was released that same year.

Haileselasie gave the order for English professionals to set up police and court institutions in Ethiopia, which were established at the supreme, upper, Awraja, and woreda levels.

The head of the Supreme Court was a foreigner. Experts received their education elsewhere. However, all of the judges on the supreme and higher courts were foreigners. This persisted up until 1965, when Niguse Fithawok, the first Ethiopian, assumed the presidency of the Supreme Court.

The final judge during the emperor’s reign was Hailessilase. After the emperor was deposed, there was a void. Thus, in 1987, the cassation bench was formally constituted.

I served as one of the justices on the cassation bench during the Derg administration.

Derg didn’t interfere with the system of civil courts. However, the government formed the military court system in addition to the already-existing civil court system. It never presented its cases before a civilian court; instead, it either executes its victims immediately or takes them to a military court.

Judges were therefore shielded from political interference.

The judges were fully removed when the EPRDF came to power. It stocked the legal system with cadres and individuals who could advance EPRDF interests. This persisted up until the 2018 inauguration of the present administration. There are several things that the present administration is working to fix.

What aspect of Ethiopia’s legal system is most lacking?

The practice of law is not based on reason but rather on experience. Justice must be acrobatic, just like life. Every judge gains knowledge from the rulings of earlier judges. Of course, some claim that this only applies to “common law” and not “civil law.”

Ethiopia adopts a system of “eclectic law.” This indicates that the principles were taken from several legal systems. Ethiopia’s legal system, however, is a little unclear.

On the one hand, we have the civil law cassation bench. However, a cassation bench’s ruling becomes law, and all courts below the bench must follow the sentence. The model is now comparable to common law.

The Ethiopian justice system has been disrupted by this difference in legal systems. Continuity refers to the use of prior judgments as standards for upcoming cases. Continuity is crucial.

Continuity provides predictability and confidence, two important advantages. Your win-loss ratio must be accurately known before you file a lawsuit. All of the stepping stone articles are already familiar to you. The courts would be unable to accomplish their jobs if every case required an interpretation of the law. A predictable life cannot be ensured by a judicial system like this.

In both the United States and Europe, attorneys provide clients with percentages indicating their odds of winning and losing. Ethiopia is the only nation without consistently applied laws. The main flaw in Ethiopia’s justice system is this.

The court systems and Ethiopian Bar Association must cooperate on this.

The Ethiopian justice system’s organizational structure is the second significant shortcoming. Ethiopia’s legal system was totally centralized, like one sun, one sky above everyone, prior to the EPRDF.

Ethiopia was divided by the EPRDF into nine different states, and that number is currently rising. There was discussion about how to reorganize the legal system after the EPRDF came to power and Kifle Wodajo was selected the leader of a group of specialists.

Some contend that, like prior governments, the justice system must be centralized. But the head of the Indian Supreme Court, Bagwati, present to offer advice, contended that Ethiopia cannot afford a decentralized court system. Others, however, believe that since the EPRDF formed a federal government, it must be decentralized.

Finally, the regional states and nine distinct court systems with nine supreme courts were approved by Parliament.

Ethiopia became the second nation after the US to implement a decentralized judicial system.

Under the US Supreme Court, there are 52 supreme courts. Because of this, America is the nation with the most lawyers. It is a new jurisdiction every time you enter a US state, thus the lawyers have to learn numerous laws in one nation.

The American federal structure is imitated by many countries, including Germany, but not its legal system. A decentralized court system was rejected by Nigeria, India, and many other federal governments because it was too expensive.

A decentralized court system appears advantageous at first glance. However, it is also expensive in terms of resources, both human and governmental. All we can do is hope and pray that Ethiopian leaders will be able to change this and unify the legal system.

How can the two main bottlenecks be eliminated at this time?

The constitution ties everything together. Ethiopia’s judicial system, however, can be centralized despite the fact that the structure is a federal one. India and Nigeria are two prime examples.

Currently, if a lawyer in Ethiopia wants to practice in many regional states, he must obtain a license from each of the regional states. However, if Ethiopia’s justice system is centralized, all of the regional states use the same article. A single license allows a lawyer to practice law across the entire nation.

In comparison to a federation, Ethiopia’s legal system is more like a confederation of states. Such a system is unique to the US, and only they can afford it.

Ethiopia is a small nation when compared to the size of America. Therefore, a decentralized justice system is not needed. It is incredibly difficult to reform and modernize Ethiopia’s judicial system. There may still be ineffective judicial systems in remote areas of the nation even after creating a centralized one.

How can the present border disputes with neighboring nations be resolved given that Ethiopia’s boundary was shaped by colonial powers?

England, France, and Italy all had boundary accords with Emperor Menelik. However, agreement does not imply demarcation. Ethiopia naturally agreed with England but not with Sudan. The current issue with Sudan stems from this.

The Prime Minister of Sudan, Alnimeri, and Haileselasie got along well. Just before the emperor was ousted in 1972, they were about to start demarcating the border. I hope Sudan and Ethiopia will start the delineation process right away.

Emperor Yohannes pleaded with England in the 1870s for assistance in keeping Masawa under control. Even though Yohannes assisted them in rescuing English troops in Sudan who were being surrounded by Mahdists, England refused. Meles Zenawi voluntarily gave over Assab a century later.

This is a huge contradiction.

But the situation with Sudan is becoming increasingly complicated.

As long as the 1972 agreement is in force, it can be resolved. The issue is that the borderlands’ value has increased recently. Ethiopia’s biggest issue is the absence of a succession plan whenever a new regime takes power.

Haileselassie came to an accord and was about to draw the line with Sudan. Sadly, Derg surpassed Hailesselasie. Derg, however, started over after stumbling everything the emperor had begun.

No Ethiopian administration adds on the successes of the preceding administration. Whether it be with the legal system, politics, development, or anything else, this is the root of practically all of Ethiopia’s problems.

Others have suggested Ethiopia may be able to reach the Red Sea via Ras Dumera, a thin free line that runs between Eritrea and Djibouti border.

Africa is home to fourteen landlocked nations. There is no other nation, however, that is as big, and as populous, as Ethiopia. The thirteen African nations that were already landlocked begged the UN to intervene before Ethiopia became landlocked.

Aid couldn’t get to these landlocked African nations. Even when a machine is replaced by a different brand, spare parts still come in. Because perishable goods take longer to reach the landlocked countries, importing them was unimaginable.

In order to negotiate between the African states, the UN tasked Yusuf Ahmed, at the time Ethiopia’s transport minister. This occurred under the Derg, shortly after which Ethiopia became a landlocked country.

A Kenyan academic once stated that Africa shouldn’t have more than 20 ports-accessible nations. He claimed that because even tiny governments are permitted to be countries, landlocked nations are created, dividing Africa into 55 countries.

However, the AU is introducing a very efficient procedure to grant all African nations access to ports. This will become a reality once the African Continental Free Trade Area (AfCFTA) is completely operational.

Of course, until Ethiopia uses them, the ports in Djibouti, Eritrea, Somalia, and other countries on the horn of Africa stay inactive. Masawa Port was undoubtedly a crucial tactic in WWII, acting as a stepping stone for the allied troops’ advance into Eastern Europe.

Currently, Ethiopia is attempting to enter Berbera port, which is positive.

Haileselasie made every effort to integrate Eritrea into Ethiopia in order to get access to the port. Assab port is obviously useless if there is a blockade of any type at the Suez Canal or Babel Mandab. Ethiopia is better off using Berbera port. There is nothing anyone can do because Berbera is the gateway to the ocean.

How can Ethiopia’s efforts to secure ports be impacted by Somaliland’s de facto status and lack of recognition?

The issues in the Horn of Africa can only be solved by peace. The horn has a sizable population. The chaos persists if this force is not used to development. Countries in the Horn of Africa must work together for the benefit of all.

The fewer jobs we produce, the more unstable we become.

Why do young people join OLF-shene, TPLF, or other armed organizations when they could get a respectable job, a home, a car, and vacation packages? Everyone wants to see equal development because they want to see their own country prosper.

Progress can lead to peace.

Due to the absence of an independent African state at the time, Haileselasie was banished to England. For that matter, there was no state.

Many people agree that Africa’s instability stems from the distribution of the same ethnic groups among its various states. Can African countries redraw the borders that colonial forces drew and reestablish nation states?

Ethiopia was at the vanguard of African decolonization in 1963, when the Organization of African Unity was established in Cairo. The main issue when the UN decided to decolonize was how to recognize and define the borders of African states. War was imminent amongst Africans if they had to trace frontiers back in time.

The UN and OAU ultimately opted to keep things as they were. In other words, borders and states begin at the location of the colonial boundary.

Each nation in Africa has territorial claims. We can’t, however, go back in time and fix it.

Ethiopia once ruled a sizable region, including the modern-day nation of Yemen, during the administration of King Kaleb in the fourth century. But we can’t claim it now.

The answer is that by uniting Africa through the AfCFTA, the AU’s economic integration agenda can eliminate the need for political frontiers.

Of course, Ethiopia is the nation that will be most negatively impacted by the status quo. The Congo, a sizable nation abundant in natural resources, was about to become landlocked. However, they were able to enter the Atlantic Ocean by Kabinda that was incredibly small. By the way, Congo provided the uranium for the bomb dropped on Japan.

A little opening between Djibouti and the Eritrean border allowed Ethiopia to reach the Red Sea. However, nobody is willing.

A serious hunger broke out during the Derg, and Nordic nations wanted to send aid cargoes. However, there was no way for the supplies to reach Ethiopia. Nobody would have protested if the Derg had taken one of the ports in the Horn of Africa at the time by force.

Ethiopia’s survival will depend on how its ports are handled in the current context of rising import volumes and growing population. It will either receive a peaceful response or a harsh one. Ethiopia must have a port, if only to use the congested route between Eritrea and the port of Djibouti.

The Ethiopian government also has to improve diplomatic connections with the surrounding nations so that they will consent to us establishing our own port.

Do you believe that Ethiopia’s conflict and ongoing instability are a result of the country’s power structure?

Ethiopia’s primary issue is underdevelopment as a result of missing out on the Enlightenment, the Industrial Revolution, the Agrarian Revolution, and the Technical Productivity Periods of the middle Ages.

According to Gibbon, who lived two hundred years ago, “the Ethiopians slumbered for over a thousand years, oblivious of the world by which they were forgotten.”

Of course, since we remained closed, we were not colonized. The mountains of Ethiopia were impenetrable to any force. Due in part to the progress that colonizers sparked, several African nations outperformed us.

Ethiopia nevertheless continues to be rich in resources and treasures. The only nation in Africa with a written past and its own alphabet is Ethiopia. 80 percent of Ethiopia’s bibles were completed and authored in the sixth century. At the time, the western bible was still in its infancy.

Additionally, Ethiopia was crucial in the spread of Islam and Christianity. Ethiopia was the destination of the first Hijira, not to Meca and Medina.

Unfortunately, because we were isolated for a millennium in between, Ethiopia’s civilization did not maintain its early impetus. We woke up when the world is already way ahead of us. We were still plowing the ground with oxen and yolk when Ethiopia awoke once more.

Youth in rural communities no longer have access to land for farming as a result of the land policy. Therefore, everyone is moving to the cities. Not only are Ethiopian towns crowded, but the proportion of farmers is out of proportion to the country’s growing consumerism.

Unemployment is widespread. There is a shortage of farmland. Ethiopia’s current issue stems from this. For the first time, PM Abiy Ahmed is attempting to spread large-scale agriculture to lowland areas in addition to the rain-based, often small-scale farming in highland areas.

What do you think of the administrations ongoing judicial system reform?

We voluntarily submitted to Ethiopia’s complicated legal system. One institution cannot bring about justice system reform. Huge amounts of public resources are being used by the decentralized justice system.

Ethiopia cannot support a decentralized judiciary when dozens of regional entities each have their own legal framework. This has to be combined.

Abiy recently complained to the parliament about how corrupt the legal system and police are. A few judges have been furious. It is well known that some judges accept bribes. Even judges of the top court experience this.

It is incorrect to hold the PM responsible in a legal system as tainted as Ethiopia’s. Though it is a challenging undertaking, we must find solutions to fix the issue rather than pointing the finger at one another.

The Court has the most authority in any nation that wants to advance. The future of the nation, business, and daily life depend on the Court.

What big setback do you believe has occurred since PM Abiy came into power? Was the transition peaceful?

We must research the causes of our ups and downs. Ethiopia has not done a very good job at nation-building. There are distinct state borders in Europe. However, the societies are very interconnected and quite similar. They are similar in terms of culture, languages, and universities. But the Ethiopian society has been segregated from one another, living in separate cultural enclaves.

Social media is currently dividing our society even more and pitting everyone against one another. Nobody is accepting accountability. We have much work to do in order to build a civilized society.

Ethiopia’s unemployment and unrest don’t surprise me because I am aware of our incapacity to provide quality labor and excellent jobs.

Five years ago, nation-building and good governance were the social movement’s top demands. Today, the issue has expanded to include the state’s continued existence. The student movement during Haileselasie began with a “class struggle” and concluded with ethnic politics in a similar manner. Why do political groups in Ethiopia consistently fail to achieve their goals?

Due to the students’ limited exposure to other ideas and the “class struggles” popularity in Cold War-era politics, the students’ movement adopted it. However, the class battle diminished and gave way to an ethnic conflict, which Meles Zenawi pursued.

Many Ethiopian academics today, particularly those in the diaspora, believe that ethno-nationalism poses a threat to the state’s very survival.

This indicates that the nation-building process in the country has been derailed by ethnic identity politics, which is having an impact on both the nation-building process and the state’s very existence.

Nationalism is not necessary for Ethiopia. The United Kingdom, France, the Netherlands, and even Italy are examples of nation states. The US, however, is not a nation-state. Europeans make up half of the American population.

One hundred years ago, Ethiopia became a nation-state. However, due to a number of criteria not being met, Ethiopia was unable to become a nation-state.

Many academics, particularly those from Addis Ababa University, continue to vehemently inform the media that Ethiopia needs to become a nation-state.

Talking about nation states now is a farce. Instead of a nation state, Ethiopia needs to be a patriotic state. Everyone in their own ethnic group is patriotic. Every Ethiopian, including Oromo, Kembata, Amhara, and everyone else is a patriot. That is what the United States is.

Everybody is present in America, including Latinos, Chinese, Indians, French, and Blacks. However, they never give up on the United States, which is their nation. Although they are patriotic states, they are not nation-states. To advance a patriotic state, we must work together.

In Gojam, there is no such thing as a pure Amhara. Every ethnic group has ancestors from different ethnic groups. Only our names reflect our racial origins.

Ethno-nationalists and ethio-nationalists swing back and forth in Ethiopia’s politics all the time. This constantly sparks conflict and a struggle for dominance. How can we transform it into a nation of patriots?

The constitution may impose restrictions on it. It can be written into the constitution if everyone agrees to it. Otherwise, Ethiopia will experience civil conflicts and revolutions.

Many people concur that the majority of Ethiopia’s issues can be resolved if the present constitution is altered. Do you agree?

It should be altered, in my opinion. Both educated and uneducated individuals are condemning PM Abiy for sticking with the current constitution. The constitution is frequently compared to an Ark. If the public does not believe in the law, it is just a piece of paper.

Therefore, if a carefully considered constitution is substituted, Ethiopia’s issues can be resolved.

Human rights advocates and even government representatives claim Ethiopia’s judicial system, especially the court system, is unprepared to handle cases involving human rights violations. They advise Ethiopia to start accepting the jurisdiction of extra-national judicial systems as a result. This means that Ethiopia must recognize the authority of regional and international tribunals over any violations of human rights.

Does doing so undermine Ethiopia’s sovereignty?

Only when the executive, judicial, and legislative branches operate in accordance with the check and balance principle can Ethiopia’s justice system be said to be in operation.

Judges are only answerable to the law. Because I criticized the Derg’s military court system, I was removed from my court position. Since 1948, Ethiopia has fully embraced the rule of law. Judges must, however, exercise their authority.

Courts have full authority to resolve any dispute, with the exception of arbitration disputes. Ethiopian courts have the authority to adjudicate matters involving violations of human rights, particularly at the high courts and Supreme Court.

The establishment of a different type of court system in Ethiopia must be spelled out in the constitution. For human rights matters, we can set up special benches, but we cannot establish a separate court or division.

The UN human rights commission is currently requesting entry to the country in order to examine human rights abuses that occurred during the Tigray war. The agreements and treaties were approved by Ethiopia. What would happen if Ethiopia resisted?

We have observed that the west consciously wants to harm Ethiopia in numerous instances. Since the founding of the League of Nations, this has been the case. Sanctions are being imposed on Ethiopia.

Mussolini would not have been able to attack Ethiopia if only the US had imposed gasoline sanctions on Italy. Because the US continued to supply fuel to Italy at the time, Mussolini resumed the invasion.

Ethiopia was brought up thirteen times in UN Security Council discussions last year.

International law thus serves as a vehicle for both justice and abuse.

The US regularly uses the UN to impose sanctions on nations it wants to destroy.

Never should Ethiopia yield to outside pressure.

Ethiopia has ratified a number of international human rights accords and conventions. By the way, Theodore Roosevelt’s wife was the one who first proposed the 1948 Universal Declaration of Human Rights (UDHR).

It forbids the use of cruel or inhumane punishment. Ethiopia had a death penalty at the time. The emperor delayed ratifying the UDHR rather than repealing the death penalty law. Ethiopia, however, is the first country in Africa to sign the deal.

Politics is at play right now, not just a general worry about human rights abuses. Before authorizing foreign investigators and acknowledging their jurisdiction, it is imperative to exhaust all domestic options. Extra-national venues may be taken into consideration if there is no statute allowing human rights victims to appear in court or if the court is unable to uphold the law.

America commits to defending democracy. Democracy is the majority’s way of ruling. Therefore, by simply agreeing, the majority can flip the truth on its head.

Can the Chief Justice of the Supreme Court call the executive to inquire of him or her? How are checks and balances made?

The Chief Justice of the Supreme Court lacks any judicial or executive authority. The president only serves as the court’s speaker. The president only responds when asked.

By the way, a judge on the Supreme Court is distinct from a judge in a lower court. The author of ye’ ewunet Mirkuz, and a lawyer, Wondimu Ibsa was born in 1947 in Arsi. Having survived the 1969 revolution, he joined Wez League and then started teaching. In his career as a former politician, Wondimu had gone through several challenges as a former politician before becoming a lawyer. He survived the 1969 revolution in Ethiopia and was arrested in the famous Maekelawi for 150 days. When he decided to become a lawyer, his first task was serving political prisoners facing terrorism charges. Lately, he is more known for sharing his political views on main stream media outlets. The Reporter’s Selamawit Mengesha sat down with him, as he reflects on current affairs and his journey in politics of Ethiopia.

The Reporter: can you tell us a bit about yourself?

Wendemu Ibsa: I was born in what is considered a large family. I had 17 sisters and brothers and my father had 47 children from 3 different women. When I was growing up the schools in Arsi used to encourage us to learn Amharic. And some people associated it with racist remarks but it was purely to help us learn other languages.

I was amongst the students who survived the 1969 revolution, I was in ninth grade and I remember crying to my mom when soldiers would beat us senseless. When the ‘edget behibret’ campaign started, the Ethiopian People Revolutionary Party (EPRP), wez league (ወዝሊግ) and All Ethiopians Socialist Movement (AESP) were wreaking havoc across the country.

I joined senay leke’s party Wez League. Students whose average was above 90 were selected to give after class courses back then, for which I was selected. I started working as a teacher starting from 1969 to 1971 with a 180 birr salary. Through all of this, we were running the revolution on the side.

I’ve went from having my parent’s religion to having no beliefs but I eventually got baptized at 40 years of age and became an orthodox Christian. I then worked as a money collector at the church for four years.

I was also detained in the famous ‘Makelawi’ for 150 days, when EPDRF took power in 1983.

I’ve also worked as a supervisor and a director in Hawassa. As a lawyer in Adama, I joined the Oromo Federalist Congress in 1998–2002. In 2006, when more than half of OFC members, including Merara got arrested, I decided to give my services as a lawyer. Back then, lawyers used to charge more than 300,000 birr to represent people accused of terrorism, because representing people accused of terrorism could label them as terrorists as well. Knowing this, I offered my services at makelawi for free, and since then I have represented 600 people accused of terrorism.

When I was serving free of charge, I faced a lot of opposition from people including my family. I remember a judge telling me that I can’t defend people charged with terrorism anymore, but 17 of my colleagues had already decided to represent those accused of terrorism.

Prime Minister Abiy Ahmed (PhD) has said they will not arrest anyone without due diligence, yet we are seeing a lot of people arrested abruptly and detained for several days without cause. What do you think changed?

“We don’t arrest without due diligence,” is just a political way of speaking. Currently, the parties in Ethiopia including the incumbent follow a party politics system, meaning it is the top executive’s playground. A political party stands for justice for those that are with it or against it. The parties in America, the republicans and democrats, are political parties, while Prosperity Party, Ezema, ABEN, Enat, amongst others, look like they are trying to shift from party politics into political parties.

A lot of Ethiopians were involved in the green legacy campaign. But out of the 53 parties, not more than 10 were involved. Why weren’t the rest involved? The legacy is not for the PM but rather for generations to come. They could have contributed to something that made a difference but the only objective of party politics is to obtain power.

When Abiy said that, it was in the essence of party politics. To whom does the PP belong to? Is it for the prosperity of the city, the rural area or the farmers? It should have been called “Ethiopia’s prosperity political party.”

Political parties care about the country, its people, history and culture. Even if political parties try to gain power they still stand for the people. The Civil Code, which has been in action since 1952, says that people can be arrested based on suspicion with or without a court ruling. Back in the feudal days, it was only allowed to arrest suspects from 6 in the morning till the sun sets but not after even if they were guilty. Police can surround him but they can’t arrest him, no matter who the person is. If Abiy does not practice this law, then the EPRDF and Derg’s plague hasn’t quite left his system yet.

The practice that is becoming normal these days where they hold people in prison for eight or nine days is not acceptable by law. Statements like “We don’t arrest without due diligence” are said with a political intent. Politicians and political parties think about what to say to get more applause instead of thinking what would actually benefit the people.

What is the cause for the killings of innocent people in Ethiopia? Who do you think is responsible for these acts?

The instability in Ethiopia has its roots dating hundreds of years back, back when colonizers had their eyes on Africa. The victory at Adwa was not just a victory against Italy but against the whole of Europe. Ethiopians used to unite to defeat these outside forces. When the west found out the secrets to Ethiopia’s victory happened to be in our unity, they needed to dismantle this unity through civil wars and parties. These parties who have a budget from the west have the sole purpose of creating conflict and rift between ethnicities.

Controlling the source of income was also a measure used by the west since the country is dependent on donations. After the 1945 World War, Japan was forced to adopt a strong military system. Within 30 years, Japans capacity was just as good as the UK, after changing the policies they were forced into. The donations are an indirect attempt at colonization.

The crimes we’re witnessing today is a result of years of planning by the west. There is this thought process circulating where people think their ethnicity came first or that it is better.

Even banks organize themselves based on ethnic lines; they have the “divide” mentality. People that are losing their lives are Ethiopians and there is no need to classify them based on ethnicity. Being proud of your ethnicity only validates Ethiopia more, because our ethnicities are found within Ethiopia.

If we take the religious approach on how humans originated, it started with Adam and Eve. They were human beings and not Amhara or Oromo. We are Ethiopian’s first then ethnicity follows; so, to refer to the atrocities in Wollega as atrocities committed on Amhara women is accepting the narrative pushed by colonizers.

Amhara’s policy is Oromia’s policy and vice versa; we can only salvage Ethiopia when we stand all for one and one for all. Being Oromo, Amhara or any of the other 80 ethnicities is natural but claiming one is superior over the other is immoral.

How do you think this can be mitigated?

Parties and politicians that stand for terrorism should be dealt with to make way for the people to have an active role. The government feeds 1.7 million students in Addis Ababa and its surrounding. It provides books, uniforms and bags. The only thing families worry about is providing the dinners. This is not something to overlook. When I say this am not saying prosperity party or Dr. Abiy are without flaw, all governments have flaws.

The community’s outlook on laws and courts is relatively better than it was before. Do you think this has anything to do with the organizational change? If there is change since most organizations are individualistic, how can that be mitigated and continue long after the individuals have left?

Prosperity Party asks organizations to help it achieve democracy. A strong military can only be formed when there is a strong organization. Law enforcement is the government’s duty while respecting the law is everyone’s responsibility.

In a meeting amongst 1000 lawyers in Oromia held by the Oromia Lawyer’s Association, a lawyer said “there are no courthouses in Oromia, or judges. The only place where judges and courthouses exist is at the Oromia Supreme Court.” But there are Oromo judges and courts in Ethiopia. If we’re accounting for injustices, then every other supreme court could come into question. The acts of a few lawyers and judges that are deeply intertwined in ethnocentric beliefs do not dictate the profession as a whole. Even the PM has no right to misjudge the profession because there are honest judges and lawyers.

What should be done to promote accountability? Would people who have violated human rights be questioned in the court of law?

The current atrocities are due to terrorists, whether they are Oromo terrorists or Amhara terrorists. Both cultures have their own way of justice that involves forgiveness. The involvement of the elderly is needed.

Political parties are creating a better life for their children while condemning the innocent. Those responsible for these acts of terrorism shouldn’t be judged in court. All the region’s religious leaders and elders should judge and reconcile things themselves.

The newly formed National Dialogue Commission plays a vital role for this, but political parties have been skeptical since its inception. If all Ethiopians come together, it will help the national dialogue to be successful. As politicians put it, the dialogue is not one carried out between parties but one that involves farmers that make up 85 percent of the population. As of now racist politics and ethnocentric politics have spread.

The current problem will not go away easily. It will take several years of working together.

There is a noticeable change in courts after Meaza Ashenafi took power, but there are also a lot of problems at the same time. Just like how a teaspoon of poison could ruin a barrel of water, the acts of a few taint the entire institution.

How can we stop the problems in all the regions of Ethiopia? How can the region’s questions be answered while maintaining peace?

The people should give information as a way of solidarity with the government. The 547 representatives at the Parliament represent 120 million people. For a parliament member to talk about their own ethnicity alone is really shameful, they are not there to represent the Wereda that put them there but to represent the people of Ethiopia.

If there are people in Parliament that spread fake news, then prosperity party is negating its own progress. There are a few that are openly opposing the death of fellow citizens. When a citizen is hurt in wollega, there should at least be an opposing brief against it from the Parliament. If prosperity is leading the country, a region’s Special Forces should be able to help another region’s army. The defense force alone cannot save the country.

Rophnan Nuri, commonly known as Rophnan, is a prominent performing artist, musician, DJ, singer, songwriter and an audio engineer that blazed a trail for Ethio-infused electronic and house music. The Artist made a name for himself as DJ Rophi before releasing his first album, Reflection, in 2018. The album made him the first ever artist to release an electronic music LP in Ethiopia, becoming an influential figure locally and internationally.

Mixing traditional sounds with futuristic undertones and a powerful lyric, he dedicated his debut work as a voice for his generation. His work earned him multiple awards, featured with world famous groups like Major lazer, and collaborated with the Zambian rapper Chef 187 on the coke studio stage. He also held a successful country wide tour for a year and half.

His work and demeanor has earned him a feature on Forbes Africa’s 30 in the creative category, making him the first Ethiopian to feature on the list.

He recently released a successful album “3” earlier this year, which he followed up by “6” this past week. The two albums, which were released after his deal with Universal Records, offer incredibly produced music directed at the youth.

Rophnan announced the final album of the trilogy will be released before the end of 2022. Yosthena Aynalem of The Reporter sat down with Rophnan to talk about the mystery that is Rophnan Nuri.

The Reporter: let’s start from the beginning. Can you tell us about your upbringing and how you got into music?

Rophnan: Funny enough, it did not start out with music for me. Yes, I have known and loved music all my life but my journey did not start there. I am a singer but I am not just a singer, or just a writer. I am a recording artist that engineers and produces as well, but I am also a DJ. I think when you’re all of these things your journey must start with one thing. For me, it was recording.

I started recording sounds from a young age and little by little I went from recording to learning the guitar, DJ’ing and then singing. It all unfolded gradually to make me the artist I am today.

I remember I started recording my mom when I was 10 years old. That was my first experience of getting into music. Because to me it wasn’t just music, I thought everyone had the same relationship with sound and music as I did. Through time, I came to realize that not everyone was drawn to it the same way. At that age, I used to perform in front of students and they would love it, but I thought that was normal at the time.

I started recording my mom out of the love I had for her, I would use tape recorders that I make from scraps; I have always been a physics head because it helped me know the world better. I would always make things up from run down electronics or collect parts like dynamos; I have always been that kid.

I always wanted to keep a record of my mom’s voice in my tape recorder, so I’d play it on repeat until my battery dies and that was a 10-year-old me falling in love with sound and frequency. From then on, I started recording my little brothers, my neighbor’s kids, and my friends.

It became my way of keeping a photograph or picture of some frequency, those records painted pictures in my head that ensued emotions in me just like a picture would. I have recorded my mom till my last conversation with her, she is not here anymore, but I’ve kept her voice till our last conversation, so I have basically recorded my mom for 21 years.

So, how exactly do you experience sound?

I always see colors when I think of sounds, even when I am asked to do commercials. I will always ask them what their theme color is so I have a sound for that color. Every color in the way it’s painted or crafted has the same pattern in music because in order for something to exist it needs pattern. Music and creativity have a pattern of their own. A very good example for this is the project I did in Dorze in my first album, it was literally the pattern of their denguza (Welayeta Traditional Cloth) that inspired the music, and it is a mixture of black and red patterns.

So, the pattern on this attire is that when one color goes in, the other goes out, their song is the same way, so you can represent the color in different voicings and you have a pattern which is a harmony and the Dorze people are one of the most harmonious people and that is one of the things I learned from them.

Harmony is everything. It is embedded in their music, their day today life, culture; they know how to sing and be in sync within. That is how I see sound no different than pictures or any creative work.

What classes have you taken to master your craft?

Endless practice and my experiences were my lessons. I remember building my first studio with Abu-Walad biscuit box and Miyota DVD microphone when I was 13. I continued performing in class rooms and jamming, and I have also been listening to FM Addis 97.1 from the first day they opened. Eventually I started working there for three years later on in my life.

I think I was 10 or 11 when they started and from that moment on, my whole teenage time was spent listening to a lot of radio. Radio became a huge part of me, sound was everything because my experience is my mom’s voice but I started hearing her voice through other moms. Even when I travel and record, I know that tone, it has the same spirit.

A sound does not lie. That is why mostly my music is based on tone and notes. These are my inspiration when I make my music especially when I am trying to go deeper in the culture and get something out from it.

At what point did you start DJ’ing?

I started DJ’ing or I would say playing in mini media at the age of 15. I got introduced to computers at the same time and realized there is a thing called “software,” which allows me to record vocals and play with instruments that are already recorded, make patterns out of them and make music. So, I started doing that when I was 15.

What most people don’t understand is the reason my recordings are clear is because I’ve been recording for 21 years. I am more experienced than most people who are in my age group. I have been producing for 17 years now and I just turned thirty-two. So the reason why my production is this good and I am getting better every day is because I have been doing it for a long time. You have to understand that this recording, this clarity and this skill doesn’t come easily. You have to work on it and you really have to put your time.

When I turned 17, I actually started DJ’ing. I got introduced to a DJ mixer. I put out my first mixtape when I was 16, remixes of songs at that time, whether Amharic or English, I literally did what I used to do in the classroom and changed it into a record.

I already had recorded data in my head and the computer allowed me to turn that into a recording so I started DJ‘ing that music. It was a way to put my music out. It became the best platform for me instead of being a guitarist, a vocalist or anything else. DJ’ing was the first introduction for me to put my music out and then it goes on to working in Radio.

I used to play my mixtapes on the radio when I was 18, 19 or 20 and that gave me the platform to be famous. After that, I put out my second mixtape and then I continued producing even more, production has been there since I was 15 till now.

When I turned 21, I stopped putting out mixtapes after the third one because I wanted to do an album of my own. It took seven years of my life in the studio, worked day and night, 16 hours a day, every day, while DJ’ing at night and paying rent. That circle went on for seven years straight and then Netsebraq was born.

I went from 21 to 28 years old doing nothing but producing, learning how to write, learning to sing better, learning how to record, buying new better equipment, working on myself and my craft. It took everything out of me.

That is why Netsebraq sounds the way it does, it was crafted from scratch and I found a new sound for my generation the world has never heard of, a new sound for my country and for the industry and that took time.

I found myself in music, in a new way of writing, progression, of sounding, recording and all this took time. It was not just a project. Its impact can be seen through DJs coming into the mainstream, singers to find themselves. I hope I am not fooling myself when I say this but, I think Netsebraq proved to artist to be themselves and to sound like themselves. It brought free thinking to this industry but it didn’t happen overnight. It was something that was crafted for a long time.

When was the first time you Disk Jockeyed professionally?

I started doing my own Day Party’s after high school in college where I started throwing parties for people in my own age group and a lot of people came to my sessions. Back then, there was no platform you can use like Tik Tok so people just attended my parties using flyers and a lot of people showed up because of the mixtapes I used to release. At those parties’ attendees didn’t pay attention to the music, just how it made them feel, they don’t really understand the craft.

Out of the whole experience, what has been your favorite part?

Definitely my first album release party, because I had been working none stop before that and when reflection happened, I was famous in most cities as a DJ. I would go to Arba Minch and pack a place of 2000 people, as a DJ I was doing really well. I was making good money and had good exposure as well, especially on the last year before Netsebraq.

Netsebraq brought me to the stage as a singer, song-writer plus a DJ. The DJ part has been subtly following me. But my first album release party was a very special moment for me. It was three months after the album had dropped and the place was packed, people were at the gates lined-up because the place filled up early.

All of that happened within three months and it was very historic. An up-and-coming artist, who is a DJ, selling out a concert was not common; it was unheard of then. For me it was a moment I will never forget, because I remember the energy that night. I had never seen an energy like that in my life, that made me think to myself “oh wow, I have made it this far.” Seeing people sing along to songs that I wrote felt surreal, something I created spoke to them enough for them to know it by heart and that truly astounded me.

To answer the question, the release party truly stands out for me, especially when I was playing the piassa song. I remember time freezing, my friend and fellow DJ, who I grew up with, was back stage with tears in his eyes because of how amazing it was. We used to walk back home after DJ’ing because the first two years of my career, I didn’t have enough money to even pay for my taxi-fare home, so we walked to places instead. I dropped opportunities my family offered me to go to the US, I dropped out of Piloting school after completing almost everything, and I then joined computer school.

And were your family supportive through all this?

Well, my brother wanted me to go to Pilot School, he was ready to pay for it and arrange everything. I went and did everything, I didn’t think I would get in but then I ended up getting in. When I did, I went to my mom and told her that I made it in, that I could follow this path and that I didn’t think it was for me.

The only thing closer to music for me at that point was computers and I would rather go and study that. And she was very supportive, she said ok and that I should be careful. My family had always been supportive of my aspirations which I am forever grateful for.

I remember when I finally got the deal with Universal Records, the first thing I did was to tell my mom and record her in the process. She was always willing, she never turned me down. She was always there for me, had she said no to me backing out of pilot school back then, I would not be where I am today. Rophnan, as a musician would have never existed. I am forever indebted to them for that.

My father on the other hand used to always tell me “Whatever you do, sell it.” He never told me what to pursue or to stop music just that I should do what I love and whatever that is I should sell it. He raised all of us like that, if you love something learn how to sell it, so you’d learn to perfect it and love it even more. Selling it would give you the money, time and opportunity to grow it and polish it into something better.

If I never sold my first mix tape, even if my first salary was just 500 birr, I wouldn’t have had the resources to support my endeavors down the line. Money is money no matter how small it may seem; it will serve as a stepping stone. I am not saying to just do it for the money but you have to account for your time with something; gain something from it, no matter how small it may seem because your time is the most valuable thing you have.

You are currently amongst one of the top artists in the country, yet you are very private, not very active on traditional media but you’re also active on social media, why is that?

I wouldn’t say I am private, because I am always posting. People know what I eat, what the studio looks like, where I work out, when I’m working. If you ask an average person who follows me on social media what I do, they’ll tell you that “he eats healthy,” I go to gym at midnight.

But as for media, I usually don’t go out unto media because I don’t really have anything to say. I have been away from media for around two years now and that’s mostly because I didn’t believe I had anything substantial to say and I don’t want to come on and lie, so I chose not to say anything.

I am the kind of person who likes to understand people’s truth and delve in to it. I believe a lot of truth is subjective and I am open to hearing other people’s truth but I know that a lot of people don’t see it that way.

What I consider my truth might not be what people want to hear. So, if I were to come out on media and say what people want to hear and not my truth, it would be a lie. I never want to lie to my fans; that is disrespectful. I would rather communicate with my people through social media and show them what I hope would inspire them, show my craft and take them through my creative process. And when this album comes out, it wouldn’t be alien to them because they saw the work that went into it through my social media posts.

I would rather communicate through that because who am I to comment on things I don’t know and understand.

I know and understand that everyone also has their truth that they’re exposed to and I am nobody to negate or support that. Until we all find a common ground of saying I respect your truth as much as you respect mine, I don’t see the importance of going out in public and creating controversy instead of looking for a solution because we can see that nobody is listening to anybody anymore.

Everyone is looking for voices and opinions that confirm their truth instead of openly listening to everyone unbiased. So, of course I am private, because I have nothing to share that my fans don’t already know. I am just as confused as everybody else and if I can’t help, I would rather listen and try and learn about everyone’s pain and truth.

And to me, music helps me do that.

Interesting, steering a bit off topic, you’ve mentioned you regularly attend the gym at midnight, why do you do that?

For me, it’s more mental than physical, because I don’t want my studio to be the hardest thing that I do in my day. Because the hardest thing is always seen in comparison, the hardest part of your day is the most dreaded part no matter how much you love it.

To not lose the love, I thought I would create something more challenging for myself. Now for me, the studio will continue to be more exciting because it’s not as hard as getting up at midnight and going to the gym. Contrary to what most people would think being in the studio is very tiring. You sit there for hours and hours daily; the not knowing of what will come out of each session creates a lot of anxiety as well, so when I add the midnight gym on top of that, I would have a much harder thing to do, which pushes me to like the studio better.

I needed that push because I had to finish three albums in two and a half years. It took a lot out of me and not just me but it took a lot out of my management as well. To deliver three albums in this time frame was really hard. Normal working hours don’t quite cut it.

Back in the days, it was really hard for artists to make a living off of music but the tides are changing now and artists like you are making a difference in that. What do you think propelled that change from your part and your peers as well?

I know it is getting better comparatively but it is not on the trajectory it needs to be at. There are still artists that are not earning their fair share but I think YouTube democratized so many things. It gave the power to artists to some extent. What got better is not the payment but the exposure. Artists get to be discovered in a quicker, better way.

As for back in the day, if the person who worked at ‘hire treat’ did not like you personally no one would know your name. Now, we’re exposed to more artists because we have access on our own terms. Young artists have better platforms now and bigger exposure where their music gets the chance to be discovered by many.

For me personally, I am rooting for all of us. When I hear an artist getting paid a million birr or dollars for music, it makes me ecstatic whether I like the music or not. It makes me so happy because the industry is getting paid this much, which is a win for all of us. It would mean fewer artists who are unable to support themselves and their family through their craft.

At least they would set a standard of artists earning a good life. I think what is happening is there is the YouTube market that is supporting local artists. Even if the public isn’t directly paying for the music, they are exposed to it at least. There are platforms that would support artists even more like Awtar but people barely use them.

When people buy the music, the artists will directly benefit from that so I encourage listeners to get their music from platforms like that. I think that is the main market but for now, YouTube works wonders for the industry.

What are your thoughts on people saying Ethiopian music died after the golden age? Some might say today’s music is more diverse and the time for it is now. What is your input on that?

Whoever says the time for Ethiopian music is now, I just want to say that I appreciate you all. Because a lot of people discourage what the industry is right now, saying it could never amount to what it was back then. The way I see it, if you grow up listening to any type of music, even if it’s just whistling, you’re going to have an attachment to it because it would be nostalgic.

It is hard to compare today’s music to something that has been part of people’s memory for 40 plus years. There is a lot of memory attached to it that can’t be compared. It is like expecting a new born baby to win a race against a 40-year-old, if you were to give 20 more years to the new born they will definitely win against a 60-year-old.

So, if you give us time, we too will have that nostalgia factor that would make us amongst the classics in people’s mind. Every generation has a favorite and it mostly has to do with the memory attached to it. I think it has more to do with nostalgia rather than production, quality. The golden age music was well produced, very powerful and well written too but I don’t think they need to be compared with today’s music.

Today’s musicians are very creative. They too have things to say, they too are well written; the people making the comparison probably grew up with those songs and they might not understand today’s music. Not understanding something does not make it lesser.

Considering artists back then, even the greats, did not put out a lot of albums or singles when compared to today’s artists who put out music more often. Why do you think that is?

I think it was very hard to put out albums back then than these days. But artists suffer to put out albums these days as well. There are easier platforms to make and sell your music on but I think artists are still suffering in a sense that studios are not easy playgrounds to play on.

The industry still does not really pay creatives; studios, composers and writers are not paid the right way. So, until that day comes, don’t expect too much creativity because creativity is also run by the freedom of time that you can make music.

If I am not getting paid well, I’ll just do something to pay my rent. Something that is easier. That is why getting paid can make a difference. When I say this, people might automatically say in the 60s they were not paid but they did so many things, no they were hired by the government.

These writers were hired by the Ethiopian National Theatre, Ras theatre, Cinema Ethiopia, and all those bands in mazegaja were hired and they were workers who were paid a monthly salary especially during the time of Haile Selassie I. That’s their actual job. They were workers who went in at 2 o’clock and left at 8. Most of us are self-employed so that also has its own impact on what you’re going to do and what you’re going to deliver to the art because you can abuse that freedom as well.

In general, I don’t agree with the comparison and I don’t think it’s fair. My generation is putting out a lot of good stuff. Think about it, if you call your days the good days and things were so well in the 60s and everything was nice, then why you would expect better things from me then, while you understand I’m living in a worse time.

So, coming to the new album, you said earlier that you were into physics; does that have anything to do with the 3, 6, 9 and the universal numbers?

Yeah, I mean you have to understand the Orthodox Church has a big explanation over this because it has a lot of knowledge about the world and the universe and everything from ancient times, but also those teachings were spread throughout the world in different ways and one of the people who understood this in early times was tesla.

He brought this idea of these three numbers being the key to unlock the universe and to understand the whole thing. If you understand things from the perspective of frequency, vibration and energy, you’d understand the world in a much better perspective.

Instead of saying me, me, you will start to say us; instead of just boosting up your ego and saying, man is everything in this world. You will understand the relationship of man in the world. And then you will protect the world.

What I’m trying to put here is for my generation to see things from a bird’s eye view. Let me put it this way, everything that we use today, phones, computer, internet, technology, all these things that we kill each other for is made by the people who understood this, these higher understandings of the world. Because how can a person make a phone that can do miraculous things without understanding the world holistically. I think the perspective that we have about ourselves and the universe is distorted and that’s why we’re very tribal and biased.

The bottom line is, I think the understanding we have about ourselves and the world should change or should be in check.

So, what I try to do with this 3, 6, and 9 is to show people that there is a higher perspective of looking at yourself, the world, how it goes and how it functions. If you understand that, everything becomes lighter, everything becomes a shape that will be understandable by the next person.

The names are inspired from that. So, when people say, oh, it’s three, it’s six, it’s nine, it’s like you’re engaging with these numbers, raising curiosity amongst listeners to look into these numbers, which will hopefully raise a question in people’s head so that they can have a better understanding of the world.

It’s always much better to look at yourself within the world. What I mean by that is like, yes, you are you, but you are in the world so know the relationship you have with the world, and then you’ll have a healthy thought, instead of saying what did the world give me? You’ll understand and you’ll start to say, what did I give to the world, what are the things that I said this morning? Most of us we’re just living inside our head, we don’t really live.

How has the experience been with Universal Records?

Well, I’m learning a lot from how the world moves, how it works, how everything is intentional; intentional in a sense that the world is moving faster. It was like going from being a small fish in a tank into a small fish in an ocean, it’s so big and sometimes it’s challenging but exciting for the most part.

I’ve seen a lot of people working day and night to make things go the right way. For me, it starts from my management company, Dots, all the way to universal music Africa and the whole team who have worked tirelessly to make things go smoother for me. I am very thankful.

The one thing I’m most thankful for is getting to release 6 at this moment, because according to our deal with the record company, I wasn’t supposed to release it now but we demanded it because I felt my generation needed it. There are songs in the album I really want to put out at this moment because my generation needs it.

They’ve been willing to compromise on things for me and understand that I’m coming from a different side of the world that they never existed in. So, it’s been challenging for them and I can understand but they they’ve been nice to me, I feel like I’m in great hands to join the world.

Other artists like Aster and Gigi have signed to international companies and represented our country. Hopefully, I’ll be able to get to do that as well. I’m following in the footsteps of giants. I hope I deliver something worth a while. Honestly speaking, to join the international world has been a dream come true.

Do you still get to work on crafts that are still true to yourself?

Of course. They do not affect my craft, rather they just help. That’s what people don’t understand. People thought they’ll make me do things their way, if that was the case, I would have never signed anything.

They’re here because they loved what I do. So, why would they touch it? But they will help me delve in deeper. They want me to experiment in our cultural music more and they also allowed me to stay here. I’m still based here; I’m producing my music on our soil. I’m still intact with the people. I’m still a part of the community.

The future is exciting. I have a full control over my artistic freedom. They don’t bend my music into anything, they even provide me with more freedom and guide me through the lines, and present me with better opportunities.

What is the perspective of 6 and what does it mean?

Yeah. So 6 means a perspective of a six-year-old. When we were at that young and impressionable age, our intentions were clear and our ego was not built the way it is now. We were not stiff. We were eager to learn and we had a better understanding of the world.

I think in order to become a better generation, we have to learn how to become young and find our inner child. To tap into my inner child, I went to kids. I went to orphanages and just spent time with the kids, communicating with them, asking them to paint me stuff.

I’ll give them words and learn their perspective. For example, I’ll ask them for testify. Like, what do you think about the word testify? And they’ll just paint me stuff. Through the genius of my graphic designers Fanuel Leul and Tsegaw Tesfa, we were able to incorporate those paintings on the album art.

I also wanted for those six-year-olds to see themselves being represented, so that they can have better guts, that our traumas cannot hurt them, for them to have a thicker skin to say no to us, if we are ever to push our biases onto them.

I want my generation to be purposeful in not passing that trauma to the young. I am hopeful this would empower them both. We are alien to kids because our biases have molded us somehow. They don’t quite vibe with us that much. When they hear their voice in my album, they’re automatically engaged through the things that I say and to the songs that I put in there. It will eventually become theirs. So, when they grow up people will not manipulate them, the way we have been manipulated.

What can we expect going forward?

“9” is coming out in December and somewhere between then and now, we’re planning on having a festival celebrating all my music with fans.

It’s going to be a series of beautiful engaging events, and till then I hope everyone enjoys 6 and gets the message.

The TPLF is the enemy of Ethiopia and the people of Tigray point blank. The government says that it would make peace with the group but as Ethiopians we can’t forgive that party even if the government fulfils its diplomatic responsibilities. I did not say the people of Tigray, rather just TPLF.

The role of Ethiopia’s government should be identified; the election board should not be giving out certificates for parties that work with terrorists. If they get a certificate, then the TPLF would need one as well.

The country is on the precipice of prosperity now. Our current state could be depicted as a nine month pregnant women ready to give birth on any day. It is always darkest before dawn, Ethiopia’s people come together even stronger when there problems pile up.

We should be careful with parties that try and create the gap between ethnicities.

How can the government enforce a justice transition? What should be included?

Justice transition means the world did not get civilized through a revolution, but rather through reforms. Reform means averting the negative impacts and carrying on already started projects.

Justice transition implies those that refuse forgiveness and acceptance from the recently started national dialogue and the people that are being accused. Each one of the perpetrators will not be brought before court but instead will have to reconcile their differences in the regions customs, which is according to justice transition.

This is the outcome of the reforms. A new education law is now being drafted, in addition to changes to the education policy. These and other innovations in teacher education are greatly appreciated.

The Association applauds the improvements and supports the next developments.

In the last three years, for example, the panda bag arrived in Djibouti and stayed for more than a month, and we were required to pay tax. We would not pay that money if the Ethiopian government was facilitating faster. We occasionally lose bags or items in a warehouse where we keep the bags.

It’s pointless for me to go over what happened. It is all well known that we simply need to take our time and evaluate everything before coming up with a way to mediate it.

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Ethiopian Reporter Political News

Officials at the Ministry of Agriculture are worried about the global fertilizer scarcity as the nation becomes unable to endure the increase in the price of the agriculture input owing to the conflict between the Ukraine and Russia.

The global fertilizer crunch continued as the country sees a growth in demand for fertilizer due to expansion of irrigation farms and new agriculture projects that prompt farmers to increasingly shift to artificial fertilizer with subsidized price.

“Demand is growing substantially as Meher farms expand and irrigation activities surges across the country,” said Umar Hussein, the Minister of Agriculture, in an event held at Skylight Hotel to honor stakeholders who have been involved in the timely delivery and distribution of fertilizer.

Last year, the price of fertilizer more than doubled in the international market, a situation that have bulged Ethiopia’s annual budget for the commodity from USD 600 million to USD 1.2 billion.

“The last year has been very challenging due to forex shortage and security concerns that have affected distribution,” Umar said.

This week, the World Bank warned that there would a further increase in price of fertilizer, with the rapid increase in gas prices turning into an increase in the cost of the commodity.

“The challenge is meeting the immediate demand for fertilizers to support next season’s crops. Current projections suggest that Africa’s unmet demand could reach four million metric tons this year, with West Africa facing the most acute challenges this growing season,” said World Bank Group President, David Malpass, during the opening of the 77th session of the UN General Assembly (UNGA 77) on Tuesday, 13 September 2022.

Last year, the Ministry had to float a tender more than twice as suppliers failed to fulfill contracts due to the global fertilizer crisis, which was first caused by the coronavirus pandemic and then worsened by the war between Russia and Ukraine, which supply over 50 percent of inputs needed to produce urea.

“Taking a lesson from last year, we are in contact with potential suppliers to avoid delays. Invitations have been already made,” said Sophia Kassa (PhD), State Minister for Investment and Input Sector at the ministry, told The Reporter.

During the last fiscal year, almost 13 million quintals of fertilizer was supplied by Fertiglobe, one of the largest producers of the nitrogen fertilizer in the Middle East, and Morroco OCP, a renowned supplier in Ethiopia, where it is currently building a fertilizer plant in partnership with the government.

The government expended a total of 64.5 billion birr for the procurement, shipment and distribution of fertilizer last year. It accounts for 11.4 percent of the budget during the same period.

The government had to allocate another 15 billion birr in subsidy as farmers become unable to withstand the surge in price of fertilize quadrupled in the local market.

Three directives on broadcast media go operational effective this month

The Ethiopian Media Authority enacts three directives to regulate the public, community, and commercial broadcast media. They are part of the eight directives the Authority has been issuing since the ratification of the media proclamation in April 2021.

To be applicable beginning this month, the directives list the rights and responsibilities, and how licenses are granted for the public, community, and commercial broadcasting media. The directives rule on how television and radio media should conduct their reports during national occasions like elections.

Lists of administrative measures by the Authority as well as legal actions have also been stated. Beginning from warnings to suspension of licenses and legal actions, several measures would follow should the media houses engage in illegal activities.

One of the actions, as it was the practice before, was to prohibit the dissemination of a program considered to be a danger to national security before going public on any of the broadcast media.

On the issue of impounding and injunctions, article 45 of the proclamation states that prosecutors might request a court order to stop publication of the programs. In the event of an emergency, the broadcast of the programs will be called off with the order of the Ministry of Justice. This should be notified to the court of law within 48 hours.

The Authority also prepared and approved several other directives to govern the media landscape in Ethiopia. These include directives for religious broadcasting services, online media, and print media.

Following the approval of the religion broadcasting service directive, which forced the registration of religious-based media, several of them have been registered.

Among the 46 media outlets that started the process and are working with the Authority to finalize registration, 23 have received their licenses, according to Dessie Kefale, communications director at the Authority.

“There was a deadline on which all had begun the registration process. Some of them were already operational for a long time, of course,” he said.

Before the ratification of the proclamation, as Dessie explained, there had not been adequate legal frameworks for all kinds of media houses.

All the directives and regulations before last year’s proclamation were based on the Mass Media and Access to Information issued in 2008, and Broadcasting Service Proclamations issued a year before that.

“There are several other laws under discussion and preparation, which includes a directive on hate speech and misinformation,” Dessie told The Reporter.

It is the “largest pandemic fraud” in the US

Ethiopians are among 47 people who have been charged in connection with a fraud scheme in the US involving Feeding Our Future. The alleged fraud is said to be the largest pandemic fraud in the country, involving USD 250 million.

The defendants are charged across six separate indictments with charges of conspiracy, wire fraud, money laundering, and bribery. The defendants are suspected of creating dozens of shell companies to enroll in the program as Federal Child Nutrition Program sites, while allegedly creating shell companies to receive and launder the proceeds of their fraudulent scheme.

The defendants submitted false invoices purporting to document the purchase of food to be served to children at the sites and submitted fake attendance rosters purporting to list the names and ages of the children receiving meals at the sites each day, according to the US Department of Justice.

“These indictments, alleging the largest pandemic relief fraud scheme charged to date, underscore the Department of Justice’s sustained commitment to combating pandemic fraud and holding accountable those who perpetrate it,” said Attorney General Merrick B. Garland. “In partnership with agencies across the government, the Justice Department will continue to bring to justice those who have exploited the pandemic for personal gain and stolen from American taxpayers.”

Feeding Our Future’s founder and executive director, Aimee Bock, was among those indicted. She is charged with conspiracy to commit wire fraud, conspiracy to commit federal program bribery, and federal program bribery. She oversaw the USD 240 million fraud scheme carried out by sites under Feeding Our Future’s sponsorship, according to the US Department of Attorney.

An Ethiopian born Abdikerm Abdelahi Eidleh, 39, of Burnsville, Minnesota, is charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit federal program bribery, and money laundering. Eidleh was an employee of Feeding Our Future who solicited and allegedly received bribes and kickbacks from individuals and sites under the sponsorship of Feeding Our Future. Eidleh also created his own alleged fraudulent sites.

Ethiopian born-US nationals, Bekam Addissu, 39, Hadith Yusuf, 34, and Hanna Marekegn, 40, are each charged with one count of conspiracy to commit wire fraud. Another six siblings who are originally from Ethiopia have also been charged with wire fraud, federal programs bribery, conspiracy to commit money laundering, and money laundering.

Another Ethiopian-born US national, Liban Yasin Alishire, 42, the president and owner of Community Enhancement Services Inc., a company located in the JigJiga Business Center in Minneapolis, is charged with receiving more than USD 1.6 million in fraudulent Federal Child Nutrition Program funds. Ahmed Yasin and Khedir Jigre have also been charged with conspiracy to commit wire fraud and money laundering in the same center. These three defendants have been accused of buying properties, including beach property, in Kenya.

Another defendant with links to Kenya, Salim Ahmed Said, 33, of Plymouth, Minnesota, is charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit federal program bribery, federal program bribery, conspiracy to commit money laundering, and money laundering. Said was the owner and operator of Safari Restaurant, a site that received more than USD 16 million in fraudulent Federal Child Nutrition Program funds, the US Department of Justice said.

“An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law,” the department said.

A startling revelation regarding the war in northern Ethiopia was announced last week by the International Commission of Human Rights Experts on Ethiopia, an independent organization tasked by the UN Human Rights Council with conducting a thorough and impartial investigation in Ethiopia. The stern warning emerged after the organization released a study that stated there are reasonable grounds to believe that parties to the conflict had violated and/or abused human rights since combat began in November 2020.

It was a report that not only angered federal government officials but also countries and experts that had already questioned the mission and real interests of the recently formed committee of experts.

“The report of the commission is prepared in defiance of the UN best practice guidelines such as professional independence, impartiality, and standard of proof,” said Tadesse Kassa (PhD), secretariat of the inter-ministerial taskforce that was formed by Prime Minister Abiy Ahmed, slamming the UN Commission of Human Rights Experts report of human rights violations in the northern Ethiopia war.

At a press conference held on September 21, 2022, he referred to the Commission’s initial report, which was created with only two full-time human rights investigators and remote interviews, as nothing more than mediocre. At the press conference, the Ministry of Justice unveiled the task force’s first phase report, which was prepared by 158 experts deployed in the conflict-affected Amhara and Afar regions.

In its first phase investigation report, which covers violations committed by the Tigray People’s Liberation Front (TPLF), the inter-ministerial taskforce (IMTF), formed to implement the recommendations of a joint investigation by the Ethiopian Human Rights Commission (EHRC) and the UN Office of the High Commissioner for Human Rights (OHCHR), presented its findings.

The Task Force found reasonable grounds to believe the commission’s findings that there were 2212 rapes, 2831 extrajudicial executions of civilians, and other violations during the war. According to its 46-page report, the team came to this conclusion after analyzing the testimonies of 10,000 witnesses and analyzing thousands of videos and material evidence.

For Tadesse, who has been monitoring the task force’s research and report-writing process, the UN Commission of Human Rights Experts’ report on Ethiopia is only a “snippet” of the full extent of the damage that has been inflicted throughout all three regions.

“The report’s conclusions are presented on the basis of either no evidence or evidence whose credibility is highly questionable,” the secretariat told the room full of reporters questioning the report in regard to its standard of proof and data collection. Tadesse even went on to call the report “a political statement” that was prepared to “help implement” the agendas of “some forces.”

This week, the commission accused all combatants in the conflict of committing various human rights crimes. In order to reach the conclusion that there are “reasonable grounds” to suspect that the offenses amounted to war crimes and crimes against humanity, the Commission listed incidents that it employed as a basis.

The selected incidents were the shelling of Mekelle and attacks on civilians and civilian objects; killings in Kobo and Chenna; and a drone strike on an Internally Displaced Persons (IDP) camp in Dedebit. Rape and sexual violence, and denial and obstruction of humanitarian access were also selected themes for the investigation.

The commission’s two-month investigation into selected incidents and themes found “reasonable grounds” to believe the Ethiopian National Defense Force (ENDF), Tigray forces, and Eritrean Defense Force (EDF) committed war crimes, according to the report. In this case, the report accused the ENDF of using “starvation of civilians as a method of warfare.”

It further stated that it found “reasonable grounds” to believe extrajudicial killings, rapes, and sexual violence were committed by ENDF members “as part of a widespread attack” directed against “the civilian population of Tigray.”

The accusations were part of a joint investigation by the Ethiopian Human Rights Commission (EHRC) and the UN Office of the High Commissioner for Human Rights (OHCHR) that was adopted by the federal government.

The federal government, on the other hand, blasted the commission’s report, adding that it had opposed its formation from the start. It described the report as “substandard quality” and its allegations as “unsubstantiated.”

“It makes grave accusations against the government and its armed forces without offering proof, just based on telephone conversations and web-based submissions. This is irresponsible,” Zenebe Kebede (Amb.), the Permanent Representative of Ethiopia, told Federico Villegas, Human Rights Council president, at the Interactive Dialogue with the commission on September 22, 2022, in Geneva, Switzerland.

As the commission was not allowed to go to the war-affected areas of northern Ethiopia to investigate by the federal government, all the 185 interviews with victims, survivors, witnesses, and other key interlocutors were conducted remotely, it said. Even the governments of Sudan and Djibouti haven’t granted the Commission access to interview Ethiopian refugees within their borders.

Authorities in Benishangul Gumuz Region are preparing a conflict recovery project that would need a 38.5 billion birr budget to be implemented. It is an initiative that arose as the security situation improving.

The plan is expected to be implemented in five years in three phases, with execution scheduled to begin next month.

The region’s sectoral bureaus will start adapting the plan and mobilizing resources based on their needs. The region is drafting a directive that will guide resource mobilization.

The required budget for the recovery plan is nearly six times the region’s 6.7 billion birr budget for the 2022/23 fiscal year.

“Non-governmental organizations and UN agencies have already expressed their interest in supporting the initiative,” Tarekegn Tasisa, the region’s disaster risk management commissioner, said.

The recovery and rehabilitation project, based on a study prepared by the region’s disaster risk management commission, will be implemented in the region’s 17 districts in the Metekel, Kamashi, and Asosa zones. The plan outlined a list of main activities that would be carried out in six sectors, including disaster risk management, agriculture and natural resources, health protection, and education.

The study for the plan was conducted using the regional government’s root-level apparatus. They have identified the extent of the damage, and the commission compiled it, according to the Tarekegn.

Besides the study carried out by the commission, another study is also being prepared led by Assosa University. The university’s study estimated that the region sustained 79.4 billion birr damage due to the conflicts in the past years.

The conflict has resulted in the loss of 16 million quintals of crop, valued at 44 billion birr, according to the study.

“The university’s study has already been presented to the regional government, but it’s not finalized yet. That’s why we are using what we studied. Ours is already ratified by the recovery steering committee,” the commissioner said.

Officials say the security situation in the region is improving now. The number of civilians killed in the past five months is at its lowest.

The region has been a place of horrific civilian killings and conflicts between government security forces and Gumuz rebels since 2019. While the Metekel and Kamashi zones are the main fighting grounds for the rebels, Metekel zone has seen killings targeted at ethnic Amharas.

Even though the region is rich in gold and coal mining resources, investors are not able to mine the reserves, especially in the Kamashi zone. The region ranked second in the country in terms of gold production, with artisans producing more than 90 percent of the region’s gold.

475,384 residents are displaced from their villages due to the insecurity in the region, of which 77,500 are children under the age of five, and 20,000 are breastfeeding mothers, according to the conflict impact assessment. The conflict is also a reason for the destruction of 43,640 houses.

The region, which has been witnessing conflict and the killing of innocent people in various places, saw 113,000 students are out of school due to instability. The destruction of schools has created a difficult situation for students to return to school. In the conflict-affected areas of the region, 201 schools were completely destroyed and 86 schools suffered partial damage.

The region’s 142 health facilities, including 126 health posts, have also sustained damage due to conflicts.

Benishangul Gumuz, which provides agricultural land to investors who engage in large scale farms, has had its 109 agricultural institutions’ warehouses looted and partially or completely destroyed.

The study showed that 291 farmer training institutes and 140 animal health facilities met the same fate.

The recovery and rehabilitation plan has prioritized the implementation of the return of internally displaced people and the rehabilitation of those people in their former homes in a sustainable manner. It also focuses on rebuilding social and economic institutions and providing the necessary equipment for the institutions.

The project need assessment showed that 38.5 billion birr will be needed to implement the plan in disaster risk management, agriculture and natural resources, health protection, education, water irrigation and energy resource development, women, children, and youth sectors, as well as peace building and security sectors.

“The cost of the recovery budget is so much higher than the region’s capacity. But we are planning to mobilize resources from diaspora communities that are from the region,” Tarekegn stated.

Funds from donors including the federal government and the World Bank recovery project are expected to be part of this project.

The Benishangul Gumuz region is one of the six regions, including Tigray, Amhara, and Afar, where rehabilitation project was launched by the federal government together with the World Bank this year. In May 2022, the bank signed a USD 300 million grant to assist the reconstruction, and the federal government has allocated 20 billion birr in the current fiscal year for reconstruction.

In areas that have security threats, the project will be implemented by a third party. The Ministry of Finance has delegated United Nations Office for Project Services (UNOPS) to implement the reconstruction in the Tigray region.

The Ministers of Health and Education studied the damage in all six regions and prepared a report detailing the cost of the five-year reconstruction project.

The Ministry of Education stated that USD 96.5 million is needed to recover from the damage to schools in the Benishangul Gumuz region, while the Ministry of Health stated that USD 22.35 million is needed to recover from the damage in the health sector of the region.

However, the question of equitable distribution of wealth is being raised in the reconstruction project of the federal government. The Boro Democratic Party, which shared power in the region’s government, blamed the federal government for not paying enough attention to reconstruction.

In a statement issued by the party a month ago, the party urged the federal government to pay attention and allocate resources to the replanting zone in the same way that attention and resources are allocated to the destruction and displacement of citizens in northern Ethiopia.

Yohannes Tesema, the party’s Political Sector head, believes the government is not giving enough attention to the recovery as much as it gives to the Amhara and Afar regions.

He claims that out of the USD 300 million granted by the World Bank, the amount of funds allocated for the Benishangul Gumuz region is small.

It says there is no military solution to this conflict

The US Department of State called on “Eritrea and others to cease fueling” the conflict in Ethiopia and urged Eritrea to withdraw its forces from Ethiopian borders. The department accused Eritrea of increasing tensions throughout the Horn of Africa region.

The US also called on “both the Government of Ethiopia and the Tigray regional authorities to halt immediately their military offensives and pursue a negotiated settlement through peace talks under the auspices of the African Union.”

At a press briefing on September 15, 2022, Ned Price, spokesperson of the US Department of State, stated that Ethiopia should look for a non-military solution to the conflict.

“We are increasingly concerned by the growing military activity in northern Ethiopia. We strongly condemn the resumption of hostilities. There is no military solution to this conflict. These actions are inconsistent with the government of Ethiopia and Tigrayan regional authorities’ stated willingness to go to talks,” Price said.

The US special envoy to the Horn of Africa, Mike Hammer, who is in Ethiopia over the week and canceled his expected press brief on Friday, is also advancing a similar position to secure a peaceful resolution to the third wave of war that resumed in Ethiopia on August 24, 2022.

The special envoy is reportedly making efforts to bring warring parties to the table, while Olusegun Obasanjo, the designated AU official to broker peace in Ethiopia, has been silent since the third wave of war broke out.

Both optimism and worry dominated the just-ended Ethiopian year. A year that began with aspirations for wider peace and stability in the nation ended with the resumption of another deadly conflict. In a war with no apparent end in sight, thousands of people are still dying in the highlands. The economy is still in a difficult situation after recovering a little in the last Ethiopian year, on the top of the stockpiled macroeconomic problems.

It was such a challenging year. In the last year, more than the year before, the effects of the one-year-old conflict was felt. This is especially true in terms of the economy. The cost of living remains high despite recent indications that inflation is slowing down nationwide.

“The government found it difficult to contain inflation and in the third quarter of the past fiscal year started to slow down the pace of depreciation of the national currency. Maybe this contributed to stabilize the inflation rate somewhat but it may also have contributed to foreign exchange shortage in the economy,” Patrick Heinisch, an economist said.

Some conflict-affected areas are experiencing a more than 1000 percent increase in commodity prices as a result of severe supply shortages. It is still a problem in the country’s north, particularly in Agew Zone, Tigray Region, and parts of Afar Region.

“Up until the resumption of the war, I was sending money to my family living in Tigray, paying 30 birr for every 100 birr I transfer,” said Kirubel, whose last name is withheld for security reasons. “For obvious reason, this is not something normal in a country with a sound economic condition.”

Kirbuel’s story is actually the tip of the iceberg. Just two months after the previous Ethiopian year began, Ahmed Shide, the Minister of Finance, was among the first to voice concerns about the status of the economy. In the same broadcasted speech on the state broadcaster in November 2021, his comrade Yinager Dessie, the governor of the National Bank of Ethiopia (NBE), did not conceal the fact that the economy was poised to collapse because of the war.

It didn’t take long for Prime Minister Abiy Ahmed (PhD) to react. While also paving the way for a negotiated settlement with the warring party in the North, the Tigray People’s Liberation Front (TPLF), which the Parliament designated as a terrorist organization, his administration declared a humanitarian truce. Humanitarian organizations had relatively easier access to provide food supplies to people in the war-torn region.

First, some progress was made in the effort to bring about peace. The economy showed signs of improvement, and the IMF, which had previously included Ethiopia on its list of nations with unpredictable and unstable economies, predicted that it would rebound. Soon after the ceasefire in North Ethiopia, the other Bretton Woods organization, the World Bank, similarly predicted Ethiopia’s economy would revive.

Though such encouraging developments helped the government rebuild its ties with the West and western financial institutions, they did little to prevent the country’s fundamental problem—the shortage of foreign currency. From approximately USD two billion to barely USD 290.7 million in loans, development partners and lenders cut their commitments.

The net inflow of external debt was negative USD 551 million, indicating that the amount of creditor loans disbursed was less than the principal amount of debt the government was servicing.

Businesses have also faced a financial crisis due to the forex shortage, a situation that has plagued them for decades, though some found last year to be their most difficult ever.

More than any other businesses, those involved in the water bottling industry felt the pinch. Twenty water bottlers had to shut down because they were no longer able to run their businesses due to a lack of inputs, and they had even reached a point where they were unable to pay their employees’ salaries.

Overall, access to foreign currency remains challenging for businesses. At the end of 2021, foreign exchange reserves stood at USD 1.6 billion, or 1.3 months’ worth of imports of goods and services.

The authorities tightened foreign exchange regulations numerous times over the previous fiscal year in response to the shortage, upping the percentage of foreign exchange companies’ must surrendered to the government (central bank) to 70 percent. Even exporters had to deal with the shortage because the restriction prevented them from using more than 20 percent of the foreign exchange they had earned.

Another major economic burden that persisted in the country last year was the widening budget deficit, made worse by the war in the North, which increased spending for military. The budget deficit widened and is now expected to exceed 300 billion birr this year, which is more than twice what it was in the just-ended fiscal year. These difficulties compelled the government to take desperate decisions, such as freezing loans or introducing new taxes, in an effort to increase revenue and narrow the mounting deficit.

However, not every problem can be solved.

For many workers in industrial parks, the suspension of Ethiopia from the African Growth Opportunity Act (AGOA), a trade benefit granted by the US to developing countries so they may export their goods without paying an import duty, has been a bad news.

Due to significant layoffs brought on by the suspension, more than five factories have left the park, and over 5,000 workers have lost their jobs as a result.

“The year has been tough for all workers in Ethiopia. From the inflationary pressure to the war that has made many jobless, they have been in a pickle. Some had to live in poverty since their salary is not enough to cover expenses,” said Kasahun Follo, president of Confederation of Ethiopian Trade Union (CETU), urging employers to consider the challenges and make adjustments in the coming New Year.

Although the amount of jobs created by industrial parks is relatively low compared to the agricultural sector, the country had planned to industrialize. For Heinisch, these efforts are now being thwarted.

“Worryingly, since 2019 the share of the industrial sector in GDP has actually decreased. The trend is likely to have continued in the past fiscal year,” he said.

Despite the difficulties last year, industries did well.

The export of industrial items reached a record-high USD 500 million in exports during the previous fiscal year. However, this is negligible in light of the development in the coffee industry, which generated USD 1.4 billion in revenue during the previous fiscal year. It is a success that has helped officials to record the nation’s record-high exports revenue, which exceeded the USD four billion mark during the previous fiscal year.

Despite some progresses, however, the overall economic condition seems to be in worst shape, according to economists.

“We have undertaken a study and discovered that the economy is not in a stable condition, which is indicated by the unpredictability of the exchange market, the fiscal policy and the forex market, adding to global-wide problems,” said Tewodros Mekonnen (PhD), an economist and a policy analyst.

Another economist, Mengistu Ketema (Prof.), also believes the economy had not been in a good condition last year.

“Inflation was growing, above 30 percent throughout the year. External debt are maturing, thus forcing the country to allocate more budget for debt servicing. The drought in the south also worsened the already tense situation. And when you add all these to the global economic challenges, including the war in Ukraine, it indicates the economy is between a rock and a hard place,” Mengistu said.

For Heinisch, who believes Ethiopia did not experience a “post-COVID” recovery in 2021/2022 as many other countries did, the outlook is more benign, assuming that the war that has broken out again will come to an end quickly and the country can focus on its economic reforms again. “Debt restructuring could free up resources that the country needs for reconstruction but also new investment projects. So there is still reason for hope,” Heinisch concluded.

Both optimism and worry dominated the just-ended Ethiopian year. A year that began with aspirations for wider peace and stability in the nation ended with the resumption of another deadly conflict. In a war with no apparent end in sight, thousands of people are still dying in the highlands. The economy is still in a difficult situation after recovering a little in the last Ethiopian year, on the top of the stockpiled macroeconomic problems.

It was such a challenging year. In the last year, more than the year before, the effects of the one-year-old conflict was felt. This is especially true in terms of the economy. The cost of living remains high despite recent indications that inflation is slowing down nationwide.

“The government found it difficult to contain inflation and in the third quarter of the past fiscal year started to slow down the pace of depreciation of the national currency. Maybe this contributed to stabilize the inflation rate somewhat but it may also have contributed to foreign exchange shortage in the economy,” Patrick Heinisch, an economist said.

Some conflict-affected areas are experiencing a more than 1000 percent increase in commodity prices as a result of severe supply shortages. It is still a problem in the country’s north, particularly in Agew Zone, Tigray Region, and parts of Afar Region.

“Up until the resumption of the war, I was sending money to my family living in Tigray, paying 30 birr for every 100 birr I transfer,” said Kirubel, whose last name is withheld for security reasons. “For obvious reason, this is not something normal in a country with a sound economic condition.”

Kirbuel’s story is actually the tip of the iceberg. Just two months after the previous Ethiopian year began, Ahmed Shide, the Minister of Finance, was among the first to voice concerns about the status of the economy. In the same broadcasted speech on the state broadcaster in November 2021, his comrade Yinager Dessie, the governor of the National Bank of Ethiopia (NBE), did not conceal the fact that the economy was poised to collapse because of the war.

It didn’t take long for Prime Minister Abiy Ahmed (PhD) to react. While also paving the way for a negotiated settlement with the warring party in the North, the Tigray People’s Liberation Front (TPLF), which the Parliament designated as a terrorist organization, his administration declared a humanitarian truce. Humanitarian organizations had relatively easier access to provide food supplies to people in the war-torn region.

First, some progress was made in the effort to bring about peace. The economy showed signs of improvement, and the IMF, which had previously included Ethiopia on its list of nations with unpredictable and unstable economies, predicted that it would rebound. Soon after the ceasefire in North Ethiopia, the other Bretton Woods organization, the World Bank, similarly predicted Ethiopia’s economy would revive.

Though such encouraging developments helped the government rebuild its ties with the West and western financial institutions, they did little to prevent the country’s fundamental problem—the shortage of foreign currency. From approximately USD two billion to barely USD 290.7 million in loans, development partners and lenders cut their commitments.

The net inflow of external debt was negative USD 551 million, indicating that the amount of creditor loans disbursed was less than the principal amount of debt the government was servicing.

Businesses have also faced a financial crisis due to the forex shortage, a situation that has plagued them for decades, though some found last year to be their most difficult ever.

More than any other businesses, those involved in the water bottling industry felt the pinch. Twenty water bottlers had to shut down because they were no longer able to run their businesses due to a lack of inputs, and they had even reached a point where they were unable to pay their employees’ salaries.

Overall, access to foreign currency remains challenging for businesses. At the end of 2021, foreign exchange reserves stood at USD 1.6 billion, or 1.3 months’ worth of imports of goods and services.

The authorities tightened foreign exchange regulations numerous times over the previous fiscal year in response to the shortage, upping the percentage of foreign exchange companies’ must surrendered to the government (central bank) to 70 percent. Even exporters had to deal with the shortage because the restriction prevented them from using more than 20 percent of the foreign exchange they had earned.

Another major economic burden that persisted in the country last year was the widening budget deficit, made worse by the war in the North, which increased spending for military. The budget deficit widened and is now expected to exceed 300 billion birr this year, which is more than twice what it was in the just-ended fiscal year. These difficulties compelled the government to take desperate decisions, such as freezing loans or introducing new taxes, in an effort to increase revenue and narrow the mounting deficit.

However, not every problem can be solved.

For many workers in industrial parks, the suspension of Ethiopia from the African Growth Opportunity Act (AGOA), a trade benefit granted by the US to developing countries so they may export their goods without paying an import duty, has been a bad news.

Due to significant layoffs brought on by the suspension, more than five factories have left the park, and over 5,000 workers have lost their jobs as a result.

“The year has been tough for all workers in Ethiopia. From the inflationary pressure to the war that has made many jobless, they have been in a pickle. Some had to live in poverty since their salary is not enough to cover expenses,” said Kasahun Follo, president of Confederation of Ethiopian Trade Union (CETU), urging employers to consider the challenges and make adjustments in the coming New Year.

Although the amount of jobs created by industrial parks is relatively low compared to the agricultural sector, the country had planned to industrialize. For Heinisch, these efforts are now being thwarted.

“Worryingly, since 2019 the share of the industrial sector in GDP has actually decreased. The trend is likely to have continued in the past fiscal year,” he said.

Despite the difficulties last year, industries did well.

The export of industrial items reached a record-high USD 500 million in exports during the previous fiscal year. However, this is negligible in light of the development in the coffee industry, which generated USD 1.4 billion in revenue during the previous fiscal year. It is a success that has helped officials to record the nation’s record-high exports revenue, which exceeded the USD four billion mark during the previous fiscal year.

Despite some progresses, however, the overall economic condition seems to be in worst shape, according to economists.

“We have undertaken a study and discovered that the economy is not in a stable condition, which is indicated by the unpredictability of the exchange market, the fiscal policy and the forex market, adding to global-wide problems,” said Tewodros Mekonnen (PhD), an economist and a policy analyst.

Another economist, Mengistu Ketema (Prof.), also believes the economy had not been in a good condition last year.

“Inflation was growing, above 30 percent throughout the year. External debt are maturing, thus forcing the country to allocate more budget for debt servicing. The drought in the south also worsened the already tense situation. And when you add all these to the global economic challenges, including the war in Ukraine, it indicates the economy is between a rock and a hard place,” Mengistu said.

For Heinisch, who believes Ethiopia did not experience a “post-COVID” recovery in 2021/2022 as many other countries did, the outlook is more benign, assuming that the war that has broken out again will come to an end quickly and the country can focus on its economic reforms again. “Debt restructuring could free up resources that the country needs for reconstruction but also new investment projects. So there is still reason for hope,” Heinisch concluded.

The envoy is wrapping up two weeks in the Horn region.

“He remained actively engaged with the Government of Ethiopia, with the Tigray regional authorities, with the African Union, and with international partners to seek to advance an important effort to bring peace. He met on September 12 with the AU’s high representative, Obasanjo,” stated Price.

On September 16, 2022, the US embassy in Addis Ababa also stated that Hammer held productive meetings with Ethiopian government officials, civil society representatives, the African Union, and international partners.

Moussa Faki, the AUC chairperson, who extended Obasanjo’s mandate on September 10, 2022 to continue engaging with warring parties in Ethiopia, also met with Hammer on the next day. On the other hand, the UN Security Council, which was set to discuss the situation in Ethiopia, was postponed.

The five months of ceasefire and humanitarian assistance to Tigray were shattered when the third wave of war broke out on August 24, 2022. The ongoing peace initiative under the AU umbrella hit a deadlock, which the special envoy is trying to reactivate.

The Tigray regional government, which has been refuting AU-led peace negotiations prior to the latest war, also issued a statement on September 11, 2022, agreeing to negotiate under the AU umbrella.

Nonetheless, reaching a ceasefire agreement and resuming the peace talks remains farfetched, worsening the humanitarian crisis, as Eritrean forces are reportedly drawn into the war and regionalizing the conflict.

“These actions are worsening the humanitarian situation at a time of pronounced drought and food insecurity,” stated Price.

He called on the government of Ethiopia, Tigrayan authorities, and all parties to allow the unhindered delivery of humanitarian relief.

“Humanitarian assistance should not be used for military purposes—it should be used to save lives. And we urge the parties to cease the fighting and to begin talks under the auspices of the AU as soon as possible. Peace needs to be given a chance. Too many people have died, and too many more are suffering,” he added.

“Our region doesn’t have the capacity to mobilize this amount of budget for the recovery. It definitely needs the federal government’s support more than this,” he asserted.

The commission’s requests to various UN entities operating in Ethiopia to share documents and materials of interest were largely deflected, or responded to after an inordinate delay. Its request to access the internal database of the joint investigation team was also delayed.

“Despite these challenges, the Commission is confident that its findings are supported by information that satisfies the standard of proof for UN investigations,” the report reads.

The commission’s recommendation, which asks the UN Security Council (UNSC) to include the war in northern Ethiopia on its agenda for the 14th time since December 2020, worries the Ethiopian government more than the report’s findings and conclusions do.

In order to stop further violations and abuses of international human rights law and humanitarian laws, it also calls on the council to take action targeted at restoring peace, stability, and security in the area. During a session held this week, officials of the federal government have already expressed their resentment at the recommendation of the commission.

“The Commission’s political pronouncements referring to the UN Security Council are ultra-virulent and betray political motivations that go beyond human rights,” Zenebe said.

It is a sentiment shared by countries that are members of the Human Rights Council.

“The Commission went beyond its mandate and made a statement on things that were not in its remit,” said Konan François, a representative of Côte d’Ivoire on behalf of a group of African States.

Wondemagegn Tadesse (PhD), an international human rights lecturer at Addis Ababa University, believes there are three options in which the UN Human Rights Council can decide to approve the commission’s report and recommendations. The first option is to end the matter within the council itself.

“In this case, there will be nothing more to do than call on the warring parties in the country to implement these recommendations,” Wondemagegn explained.

The second option is to refer the matter to the UN General Assembly. “However, since the assembly gathers over a long period of time, it may not have a big impact on Ethiopia,” he added.

Apart from that, even if it is presented to the General Assembly, its voting system does not have veto power, so there is a high possibility that it will not be approved. A large number of developing countries at the General Assembly will not vote in favor of the resolution as they consider such decisions as interference, according to Wondemagegn. Moreover, experience so far shows that if the country in which the decision is made does not accept the decision, the chances of its implementation are low.

However, if issues are referred to the UNSC, the third option may take a different path than the two options.

“The Security Council is the only institution that has the power to take military action among the UN institutions, but as we always see, the proposal to the Council is overturned by the veto power, so it does not make a difference,” Wendmagegn asserted.

In the past two years, the council has not passed any decisions on Ethiopia. The war in northern Ethiopia and the Great Ethiopian Renaissance Dam have been on the agenda tabled before its members for discussion. When a resolution was proposed, China and Russia, who have veto power, supported Ethiopia.

For Wondemagegn, even if the Security Council passes a resolution, it is difficult to implement it. If the Council decides to send troops to stop human rights abuses, there may not be many countries to contribute troops to a country as large as Ethiopia.

“Even if countries contribute soldiers and send them to Ethiopia, they will have to fight a war with Ethiopia because the Ethiopian government will not accept the decision. No one wants this,” he said.

Another human rights expert, who asked not to be named, explained that even if the UN Human Rights Council does not pass any decision as a result of this report, countries that want to take unilateral action can use it as a cause for their measures.

“Those like the US and the EU may use the report to suspend loans and impose sanctions,” the expert said, adding, “but this would only hurt the people affected by the war more.”

The Ethiopian Human Rights Commission also agrees with this idea.

“Decisions should be made to reward the people affected by the war and bring reconciliation, not where parties with differences of opinion are dragged into a corner,” said the Deputy Chief Commissioner for Human Rights, Rakeb Melesel, while underscoring that EHRC is ready to share its database if the Commission is willing to undertake another investigation.

The Ethiopian government is exerting pressure to block any attempts by the Commission to extend its mandate. “The Council should reject the report and oppose any attempt to extend the mandate of this Commission beyond December 2022,” the government emphasized.

Farmers reject the much-anticipated Bt cotton.

Cotton growers in Ethiopia resort to unauthorized GMO cotton illegally smuggled from Sudan. Bt-RR cotton seed is currently being cultivated in Afar, Metema, Benishangul Gumuz and Gambella regions after being smuggled via Metema, Humera and other border areas between Sudan and Ethiopia.

Once the first generation of open-pollinated (OT) is acquired, it can be sown for between three and five years, after which the seed cannot be recycled. Ethiopian cotton farmers are currently buying the smuggled cotton seeds and multiplying them locally at 10,000 birr to 13,000 birr per quintal.

Bt-RR originated in Brazil, and was largely cultivated in Sudan. Most other GM cotton seeds are non-OT, which means they cannot be used after the first year. As a result, the farmer has to buy the seed every year.

The cotton farmers The Reporter talked to underlined that the smuggled cotton seed is preferred mainly because it resists bollworm, which has been devastating the existing local cotton breeds. This is because a one-time chemical spray on the vegetation is also highly effective in eliminating all weeds except the cotton itself.

The productivity of the Bt-RR is between 10 and 14 quintals per hectare, slightly superior to the local varieties. But the Bt-RR is advantageous mainly because it beats the bollworm, and requires less pesticide.

“A number of farmers are now multiplying the Bt-RR seed and selling it to cotton farmers across the country. The farmer liked the seed, instead of the local existing varieties and the GM cotton approved by the government,” said a manager of a large-scale cotton farming company. He cultivated the new seed on 200 hectares in Amhara regional state.

Melkamu Telake, board chair of the Ethiopian Cotton Producers, Ginners, and Exporters Association, says farmers are resorting to smuggled seed as access to other cotton seeds depletes. “The government failed to provide the type of seed preferred by the farmer.”

After the Parliament legislated the GMO proclamation in 2015, the Biosafety and Invasive Alien Species Follow-up and Control directorate at the Environmental Protection Authority (EPA) and EIAR commercialized Bt cotton for the first time in 2019.

However, a number of commercial cotton farmers in Gambella have tried Bt cotton and lost interest after the first year. The first reason was that the authorized Bt cotton could not effectively resist the bollworm.

The other major reason was that the authorized Bt cotton, which is imported from India, is expensive costing USD 28 per kilo. As a result, the EIAR picked Indian-based JK Agri Genetics Ltd. to open a subsidiary company in Ethiopia and multiply the seeds in Ethiopia to avoid the forex problem required to import the seeds annually. However, this plan also bore no fruit, as the Ethiopian farmers rejected the authorized Bt cotton.

“All the cotton farmers in Ethiopia are boycotting the authorized Bt cotton. It did not effectively resist the bollworm. It necessitates the repeated application of insecticides and pesticides. We have to buy the seeds every year at an expensive price. Plus, our farmers lack the technology required to cultivate the authorized Bt cotton with the right agronomical practices. So the farmers are resorting to the smuggled variety, instead,” said Melkamu.

Mesele Mekuria, Cotton Development Director at the Ethiopian Textile Industry Development Center, also said the authorized Bt cotton did not work.

The productivity of existing cotton seeds in Ethiopia, which are Ggedera and DP90, dropped, especially after the varieties were in use for over 30 years and were unable to resist diseases. Currently, rain-based farming of traditional seeds offer anywhere between eight quintals and 28 quintals per hectare.

However, if irrigation is coupled with precise agronomical practice, the local seeds can offer between 45 quintal and 54 quintals per hectare, according to Melkamu.

“Big cotton farmers like Lucy in Afar, and other farmers in Arbaminch have achieved this level of productivity. But there are certain interest groups who are trying to enforce certain Bt cotton on Ethiopia. We need GMO cotton only after we achieve maximum productivity with the existing local varieties,” Melkamu said.

These interest groups, according to him, do not want the local varieties. “Global GMO patent holders are behind these interest groups. Once we start using such GMO varieties, we will be their slaves because the existing local varieties will be ousted in five years and we have to buy their seed every year.”

Yet, other cotton farmers argue that the EIAR has to take samples of the Bt-RR that are smuggled from Sudan, study them, and approve them for Ethiopian farmers.

The meager productivity of local cotton farming has been the Achilles heel for Ethiopia’s aspirations to become the manufacturing hub of Africa, mainly capitalizing on textiles, garments, and apparel.

Damage to health and education infrastructure in six regions of Ethiopia resulting from conflicts need a USD 3.6 billion recovery budget, according to a new Recovery and Rehabilitation Plan document released by the Ministries of Health and Education.

The ministries outlined an intervention plan for the five-year rehabilitation project that will be implemented in three phases. The recovery intervention plan is part of the “Response – Recovery – Resilience” project launched by the Ministry of Finance in March 2022.

The ministries assessed the damage that occurred in Tigray, Afar, Amhara, Benishangul-Gumuz, Oromia, and Konso zones of the Southern Nations Nationalities and People’s (SNNP) regions. The assessment and recovery plan were prepared by the government, with a technical assistance from the World Bank.

Education suffered the most harm. According to the recovery plan, the sector requires USD 2.2 billion to recoup lost learning and rebuild destroyed facilities.

The Ministry of Health’s plan proposed a USD 1.4 billion intervention.

As the assessment shows, the conflict destroyed 2,681 schools completely and another 4,158 schools partially in these regions. 38 Technical and Vocational Education and Training (TVET) institutions and three universities have also sustained varying levels of damage. The number of destroyed TVETs and universities in the Tigray region is not included due to a lack of data.

This destruction of the education sector has affected more than 4.2 million learners and close to 200,000 teachers and education staff, the report reads.

The number of people affected by the damage to the health sector is estimated to be close to 24 million people. The people in conflict-affected area have been “adversely impacted.”

The assessment showed that 3,217 health posts, 709 health centers, and 76 hospitals were partially or completely damaged in the six conflict-affected regions.

Among the six regions that were affected, the Amhara region suffered the most damage to the sectors. Out of the 3,217 health facilities that sustained damage, 69 percent of them are found in the Amhara region. Furthermore, out of 248 ambulances that were damaged or looted, 50 percent were in the region.

The region’s 4,020 schools have also been destroyed, accounting for 58.7 percent of the total damage across all six areas.

However, given the region’s penetration of health institutions, the damage to health facilities in Tigray is substantially greater. 82.9 percent of the region’s hospitals have been damaged. The same fate has befallen Tigray’s 76 percent of health posts and 50 percent of health centers.

In the health sector, out of the overall estimated recovery cost, USD 1.4 billion, the largest share, USD 501.19 million, is for health centers. General and specialized hospitals follow at a cost of USD 342.54 million.

In the education sector, USD 1.36 billion is planned to recover damaged primary and secondary schools in the six regions.

The recovery and reconstruction program will be implemented for five years in three phases, according to the documents prepared by the ministries. The program’s early recovery phase needs will be met within the first six months. Short-term demands range from six to 24 months, whereas medium-term needs range from three to five years.

According to the ministry’s Stakeholder Engagement Plan document, the implementation of the program will be led by a Federal Project Coordination Unit (FPCU) in the Ministry of Finance. Various sectoral ministries and other mandated offices are responsible for the implementation of the program.

In the Tigray region, where the ministries have no access, the recovery project is planned to be implemented by a third party. The Ministry of Finance signed a third-party implementation agreement with the United Nations Office for Project Services (UNOPS) last month.

The World Bank granted USD 300 million in May for the implementation of this project. While the government, which has just begun its fiscal year, has allocated 20 billion birr.

Abiy Ahmed’s (PhD) time as Ethiopia’s prime minister is not without difficulties. He even called himself “a Prime Minister with no time to even undergo a medical checkup” in front of lawmakers. Since taking over after Hailemariam Desalegn’s departure, Abiy has ruled a nation that has been plagued by economic distress, political unrest, and even a civil war that has lasted for more than a year. On top of the never-ending problems he dealt with, with most of the incidents occurring in the northern part of the country, there was another heavy task that challenged his leadership. That is the statehood question brought by ethnic groups living in the south.

A few months after taking office, Abiy was inundated with requests from the leaders of more than a dozen zones and woredas, placing pressure on his government to help them realize their desire for a regional state. Participation in the endeavor to achieve statehood recognition ranged from low-level bureaucrats to zonal leaders and officials in the federal government. Ten zones filed a resolution with the House of Federation (HoF) adopted by their separate councils to hold a referendum on statehood. Abiy was aware right away how urgent it was to fulfill the regions’ desire.

Soon after taking office, Abiy traveled to almost all of the South Region’s ethnically divided zones. It was an attempt to win political support as he rushed to replace the Ethiopian Peoples’ Revolutionary Democratic Front (EPRDF) at the time and establish the ruling Prosperity Party. But his administration’s stance on their desire for statehood was the main topic that dominated the debates at the zones. He promised to respond to their request, which by all legal criteria is legitimate.

However, it was easier said than done to keep the pledge. Sidama was the first regional state to be established following a referendum, with 98 percent of voters supporting the establishment of a new regional state. But civilians paid a price for the government’s efforts to push through Sidama’s desire for statehood, as enraged protesters set fire to the homes of many Hawassa inhabitants and forcibly evicted many others.

In particular, ethnic Amharas were targeted in all incidents involving statehood questions across the South Region. The Attorney General recently released a report that the homes of ethnic Amharas were burned to ashes, which led to the arrest of dozens of people on suspicion of being involved in the violence.

It appears the government understood the consequences of ignoring statehood questions were brought by Ethiopians to the south. Abiy formed a team of experts and high-level government officials two years ago to launch a study on the issue after realizing the consequences of disregarding statehood requests.

The team sent out three recommendations. The first option is to maintain the South Nation, Nationalities and People’s Regional State in its present configuration while making changes to the region’s appropriate number of political seats. The second suggestion was to establish the Sidama region while keeping other ethnic groups as members of the SNNPR. The third involved splitting the region into five, clustering the ethnic groups together.

The third alternative seems to be what the federal administration chose after the first two became unworkable due to rising animosity among ethnic group elites in South Ethiopia.

“I think it’s a step in the right direction, but caution should be exercised to avoid making the same mistake as SNNPR, which is now being dismantled due to growing resentment over resource sharing, political participation, and infrastructure development,” said Keyredin Tezera, assistant professor of Social Anthropology who participated in the study carried out at the request of the federal government.

Following Sidama’s victory for independence from the SNNPR, Kaffa, Sheka, Bench Sheko, Dawuro, and West Omo Zones, as well as the Konta Special District, joined to form the South West Region through a referendum. The local council members of five special Woredas – Amaro, Ale, Basketo, Burji, and Derashe – as well as the Konso, Gedeo, Gamo, Gofa, South Omo, and Wolayta zones voted last week to restructure their administrative units into a newly established regional state.

In a similar fashion, members of the Hadiya, Halaba, Kembata Tmbaro, Silte, and Yem Special Woreda local councils have begun the process of creating a new regional state. However, activists and political organizations active in the zones contested the action.

The Gurghe people, with whom the federal government wants to construct a cluster along with Hadiya, Silte, Kembata, Silte, and Yem, are among those who have objected to the concept of forming regions in clusters. The Guraghe zone has a population of approximately six million people and a land area of approximately 5932 sq.km. Its council was one of the zones that submitted a request to hold a vote on becoming a separate region.

Social activist, Misbah Kedir, is one of the ethnic Guraghes who have contested the federal government’s proposal to partition SNNPR into five cluster areas. He thinks it is wrong for the central government to “forcefully” incorporate the Guraghe Zone into the cluster.

“In addition to Guraghes, other zones that had voted to create a cluster region had also supported the motion after receiving an order from the federal government,” said Misbah.

Wolayita’s opposition wants to be heard too.

“First and foremost, the council, whether in Wolayita or other zones, does not have the power to accept such a resolution on behalf of the people because their term period ended almost seven years ago. Second, this is something that the cadres, not the people, want,” said Amanuel Mogiso, leader of the opposition Wolayita National Movement, which is active in Wolayita Zone.

Amanuel exhorts the federal government to pay attention to what the people want, comparing the situation to sitting on a ticking time bomb. “The Wolayita people have peacefully expressed a desire for their own territory. They need to be heard,” he added.

The politician urges the federal government to avoid meddling and let ethnic communities in SNNPR, including Wolayita, exercise their constitutional rights. “To reject their right to have their own regional state is unlawful,” Amanuel continued.

Jember Abdo, a legal expert, agrees.

“The state is turning into an enabler of violence. In the case of Guraghe, this is what I saw. The people exercised their right to form a region but the federal government’s response was to militarize their hometown,” Jember said urging the federal government to uphold the constitution.

There are economic reasons driving the pursuit of statehood.

“In order to obtain a permit from SNNPR officials, farmers and businessmen must travel hundreds of kilometers from distant areas in the Guraghe zone to Hawassa. And after the cluster region is established, they might be required to follow suit in order to obtain a permit from Hossana, which will likely serve as the cluster region’s capital city,” Misbah said.

Amanuel is worried too.

“The political structure is to blame for the underdevelopment of zones. When you have a significant budget and tax in a region, it is not the same,” Amanuel concluded.

Regardless of the final outcome of the campaign to achieve statehood for Ethiopians in the South, there are still many unknowns about the future of the region, which will depend on the government’s decision on how to manage the grievances of the ethnic groups it intends to organize into a cluster region.

Sergey Lavrov, Russia’s Foreign Minister, affirmed that his country is in favor of giving Africa a permanent seat in the UN Security Council. The Foreign Minister also concurred with Ethiopian officials that the Security Council should undergo reform in a bid to take into account the current state of the world.

Lavrov arrived in Addis Ababa on July 26, 2022 for a two-day trip, where he met President Sahlework Zewde; Demeke Mekonen, deputy prime minister and foreign minister, and other high officials. Lavrov also traveled to Egypt, Congo, and Uganda, before wrapping up his Africa trip by conferring with the diplomatic community at the AU headquarters.

“Ethiopia and Russia share similar stances on issues on the global and regional agenda. These approaches rely on adherence to international law, particularly the tenets of the UN charter and the respect for the sovereign rights of states,” said Lavrov.

During the 35^th ordinary session of the AU summit in February 2022, PM Abiy Ahmed (PhD) exceptionally raised the urgent topic of reforming the UN and securing a permanent seat for Africa in the UNSC.

As a result, the AU passed a resolution that requests “full representation of Africa in the United Nations Security Council, including not less than two permanent seats in the United Nations Security Council with all the prerogatives and privileges of permanent membership, including the right of veto.

The AU also proceeded to request the Committee of Ten Heads of State and Government to continue to intensify its engagement at the highest level with other interested and regional groups and key stakeholders, including the five permanent members of the UN Security Council, with a view to building on progress made in advancing, canvassing and promoting the Common African Position.

The AU’s quest for reform of the UN began in 2005 when African states approved the Ezulwini consensus and Sirte Declaration on the Reform of United Nations Security Council.

In 2010, President Goodluck Jonathan of Nigeria, told the UN General Assembly, “The exclusion of Africa from the permanent member category of the Security Council can no longer be justified. We urge the UN to quicken the pace of its reforms. Not only to better reflect the current global realities but also to ensure that it enjoys genuine legitimacy.”

Africa does not have a proportional representation in the global body.However, the consideration has become critical, as Africa is frequently impacted by decisions over which it has no say.

In particular, both Ethiopia and Russia have been haunted by the UNSC particularly since last year. In the past year, the UNSC discussed sanctioning Ethiopia in relation to human rights violations in the Tigray war. However, the considerations were vetoed by Russia and China. Ethiopia also paid back by refraining from voting, when the UNSC introduced emergency voting in March 2022 to condemn Russia’s invasion of Ukraine.

Demeke appreciated Russia’s “unwavering support during difficult times of need, particularly in the recent struggle to safeguard Ethiopia’s sovereignty.’

The major purpose of Lavrov’s trip to Africa, amidst a propaganda war with the west, is also to secure Africa’s support in similar UN voting scenarios in the future.

Gaining a permanent seat on the UN Security Council will position Africa as a balancing force between the power struggles of the east and west, as well as the rapidly changing global geopolitics. However, reforming the western-dominated organization might not be easy, according to scholars. But once the UN begins processing the AU’s request, Russia and China can play a decisive role in making Africa earn its place in the UN structure.

Over 60,000 foreigners have registered so far

Ethiopia’s Ministry of Foreign Affairs urged foreigners with expired visas and resident permits to get registered in 125 selected areas of registration established for this purpose.

Speaking at a press conference on Thursday, Ministry Spokesperson Meles Alem (Ambassador) has urged all foreign nationals living in Ethiopia without proper documents to be registered immediately before authorities start to take legal action as per the international law Ethiopia has signed.

Foreigners without any visa or residence permit, as well as refugees or asylum seekers requesting status and residing in Addis Ababa and its vicinities with or without an urban refugee permit, are also requested to register as of July 25, 2022.

According to Meles, within the last five days of the official announcement for registration, over 60,000 people have registered from countries including Canada, America, Eritrea, Congo, Italy, Syria, China, Turkey, Ghana, Burundi, Liberia, India, Bangladesh, South Sudan, and other countries.

The first phase of registration sites is installed in Addis Ababa and some Oromia administrative zones, and the second round of registration will be opened soon in regional states and the Dire Dawa City administration, the spokesperson told the reporter.

Registration is conducted under the auspices of the Immigration and Citizenship Service, through the Vital Events Registration Offices of all Woredas and the Immigration and Citizenship Service, as per its mandate given by a proclamation to register and administer legal permits for foreign nationals living in Ethiopia.

“We have started this to make sure that immigration work is proceeding as per the legal procedures,” said Meles (Ambassador), adding that there is no further intention of expelling or any other form of stunt.

The spokesperson has further called on foreigners to take advantage of this chance before officials start to take legal measures against those who failed to register as per the rule. However, the formal registration process will not be applied to the diplomatic community.

Over 180,000 foreigners are expected to be registered in Addis Ababa, Meles added.

In a similar presser, the spokesperson announced the cancellation of 162 million US dollars of rolling debt by the Russian government, which Ethiopia has borrowed since the Soviet Union period. According to Meles, Russia has changed the modality from debt to a development grant for purposes of modernizing the Melka Wakana Hydroelectric Power Station and upgrading Balcha Hospital’s technical capabilities.

Over 60,000 foreigners have registered so far

Ethiopia’s Ministry of Foreign Affairs urged foreigners with expired visas and resident permits to get registered in 125 selected areas of registration established for this purpose.

Speaking at a press conference on Thursday, Ministry Spokesperson Meles Alem (Ambassador) has urged all foreign nationals living in Ethiopia without proper documents to be registered immediately before authorities start to take legal action as per the international law Ethiopia has signed.

Foreigners without any visa or residence permit, as well as refugees or asylum seekers requesting status and residing in Addis Ababa and its vicinities with or without an urban refugee permit, are also requested to register as of July 25, 2022.

According to Meles, within the last five days of the official announcement for registration, over 60,000 people have registered from countries including Canada, America, Eritrea, Congo, Italy, Syria, China, Turkey, Ghana, Burundi, Liberia, India, Bangladesh, South Sudan, and other countries.

The first phase of registration sites is installed in Addis Ababa and some Oromia administrative zones, and the second round of registration will be opened soon in regional states and the Dire Dawa City administration, the spokesperson told the reporter.

Registration is conducted under the auspices of the Immigration and Citizenship Service, through the Vital Events Registration Offices of all Woredas and the Immigration and Citizenship Service, as per its mandate given by a proclamation to register and administer legal permits for foreign nationals living in Ethiopia.

“We have started this to make sure that immigration work is proceeding as per the legal procedures,” said Meles (Ambassador), adding that there is no further intention of expelling or any other form of stunt.

The spokesperson has further called on foreigners to take advantage of this chance before officials start to take legal measures against those who failed to register as per the rule. However, the formal registration process will not be applied to the diplomatic community.

Over 180,000 foreigners are expected to be registered in Addis Ababa, Meles added.

In a similar presser, the spokesperson announced the cancellation of 162 million US dollars of rolling debt by the Russian government, which Ethiopia has borrowed since the Soviet Union period. According to Meles, Russia has changed the modality from debt to a development grant for purposes of modernizing the Melka Wakana Hydroelectric Power Station and upgrading Balcha Hospital’s technical capabilities.

Special Forces of Somali regional state and a coalition of other regional and federal security forces have conducted an all-out counter attack to purge Al-shabab fighters that entered Ethiopia’s borders on Friday. The regional government deployed hundreds of Special Forces to conduct the operation.

“A number of Al-shabab fighters entered the Ethiopian border, after they conducted an attack at a time nobody expected. They first engaged with Somali Special Forces. And heavy casualties occurred on both sides. But we are clearing them out,” said an official in the regional government, who spoke to The Reporter requesting to remain anonymity since the federal government is also involved and information is to be disseminated from the center.

“We have also captured their fighters, and the operation will continue until they are cleared out from the area,” added the official.

The terror group first attacked two border towns in Somalia’s side on July 20, 2022, on the same day Somali regional state officials convened to evaluate its security forces performance.

After the first clash at Yeed and Aato towns in Ethio-Somalia border, the militants reportedly killed twenty Ethiopian forces including three civilians. The group lost 63 of its own.

The al-Qaeda linked group tried to enter Ethiopia through Afder zone in southern part of Somali region.

Apart from a strong presence by Ethiopian forces in the border areas, Ethiopia also deployed close to 4,000 troops in Somalia under the AU Transition Mission in Somalia (ATMIS), a reconfigured version of the former AU Mission in Somalia (AMISOM). Ethiopian troops maintain a stronghold in Baidowa.

However insiders question why Al-shabab is attacking Ethiopia at this moment.

“The attack is intended to divert the attention of Ethiopia. Al-shabab is conducting the attacks in coordination with the TPLF and other insurgents in Ethiopia,” said a security expert who focuses on Al-shabab.

Other insiders also link the rising Al-shabab attacks with the instability in Ethiopia. The restructuring of AMISOM and controversies shadowing the continuity of ATMIS, is also contributing to Al-shabab’s resurrection.

Over the past few months, Al-shabab’s attacks have evolved from suicide bombings to attacking military bases in Somalia, including an AU military base. Experts stress that the group is gaining momentum as Horn of Africa countries are occupied with domestic conflicts and the EU, the largest financer of AMISOM/ATMIS, is backtracking.

A few weeks ago, the newly elected Somalia President, Hassan Sheikh Mohamud said negotiations should be considered with Al-shabab, a rare gesture, which is becoming almost a shadow state.

However, the militant group in a statement said it fights to establish an Islamic state in the Horn.

In a continued conflict in West Wollega Zone, over 1,105 civilians are killed this year, including 28 officials who were shot in one day. The zone has also lost properties worth over three billion birr to extended conflict during the just ended fiscal year.

Reports of the devastating impact of the conflict presented to the Caffee Oromia, council of the Oromia regional state, which held its annual meeting over the week. Gammachis Dabala, administrator of West Wollega zone, told the council that both ethnic Amhara and Oromo are killed in his zone.

The regional government has repeatedly launched operation to eradicate the Oromo Liberation Front (OLF-Shene) group, which designated terrorist by the House of Peoples Representative (HPR) and still maintaining West Oromia as its stronghold. During the last month alone, the group has killed hundreds of civilians, according to Ethiopian Human Rights Commission (EHRC) reports. PM Abiy Ahmed called it “a massacre.”

Most of the zones of Oromia are currently under threats of the insurgent group, according to official reports. Loss of life, property damages, and closure of schools are also tolling across the regional state. In North Shewa alone, some 195 schools remain closed, while over 75,000 students were out of school, according to the report presented during the Caffee meeting.

Taye Dendea, member of the Oromia Prosperity party and state minister of Peace, was at dismay after attending the Caffee meeting. “Last year, only few woredas of Oromia were affected by conflict. Currently, eight zones of Oromia have security threats. We failed the people that elected us just last year. The Oromia Regional Government failed to fulfill its duty to protect the civilians. The damage up on our people is shocking. Externalizing the problem cannot be a solution,” he wrote on Facebook after the meeting was concluded on Friday.

The state minister also harshly criticized the budget allocation of the just started 2022/23 is not enough to fight the insurgents. Nearly 400 million birr is allocated for the regional security budget, which the state minister argues should be more than one billion birr. This accounts for less than one percent of 158.6 billion birr budget approved by the Caffee.

However, the state minister did not mention shortcomings of his ministry why the insurgent group is remaining at large.

Businesses that are registered in Tigray region as a federal taxpayer but are currently located outside the region will be paying their taxes at the Northwest Branch of the Ministry of Revenue in Addis Ababa.

The federal revenue that should have been collected in the region will be collected directly by the ministry. The tax that should have been collected by the regional government will be deposited in a trust bank account.

The ministries of finance and revenue are implementing this temporary procedure because organizations and individuals registered as taxpayers in Tigray are having a difficulty to continue their business activities in other parts of the country, according to Abaynesh Abate, the ministry’s tax declaration director.

Despite their desire to continue working in their current location, the taxpayers were unable to renew their business licenses, vehicles or construction equipment.

Abaynesh said that they could not obtain loans, bid on contracts or receive other government services. “Some of them even claimed that the house they rented for their business was in trouble since their business license had not been renewed.”

More than 100 complaints from Tigray’s taxpayers have been lodged to the ministry, and the number continues to grow. The majority are taxpayers who must pay taxes to the regional government.

Abaynesh says among the complainants, ten are Tigray registered firms that are managed by Commercial Nominees and pay federal taxes.

She explained that after the ministry informed the Ministry of Finance about the complaint in April, it allowed taxpayers to get a temporary tax clearance through a temporary procedure or register as taxpayers elsewhere.

In a letter written by the Ministry of Finance to the Ministry of Revenue last month, it acknowledged the regional government’s authority to collect the tax revenue in Tigray region.

The minister cited Article 96 of the Constitution to explain saying, “Since the income collected from individual businessmen and regional public enterprises is a regional income, it is clear that it is the regional government that can levy and collect tax.”

On the other hand, the letter explains that the tax collected from private organizations located in the region is the joint income of the federal and state governments, levied and collected by the federal government. But the income collected from federal public enterprises located in the region is the income of the federal government.

Nevertheless, since both taxpayers registered in Tigray are facing difficulties to conduct their activities due to the “emerging security problem,” State Minister, Eyob Tekalegn, in a letter stated that it is necessary to establish a temporary system.

The Ministry of Revenue, which has designated the North West branch in Addis Ababa’s Lideta neighborhood, will ensure that these taxpayers receive their tax clearance.

Abaynesh added that a request has been made to the Ministry of Finance to open a trust bank account where regional taxpayer revenue will be put.

“It will be held in a trust for later transfer to the region,” she explained.

According to Abaynesh, the ministry would only collect the taxes submitted by taxpayers because there is no means to check how much the region’s taxpayers owe.

“We don’t have any information to show how much they should be paying at that point. When the situation in the region stabilizes, it will be thoroughly examined” Abaynesh elaborated.

If taxpayers want to shift their workplace to their current address after receiving their tax clearance, registrations will be completed at the preferred address.

Under typical circumstances, changing a company’s address requires amending the company’s establishment document and submitting meeting minutes. Providing permission to change address is the authority of the regional government. All these requirements are not necessary expected to be meet in the temporary procedure.

However, even though both federal and state taxpayers registered in the state will be issued a tax clearance certificate from the Ministry of Revenue, they cannot sell their property. According to the Ministry of Finance’s letter, it is impossible to verify whether they have tax debt or not in the current situation.

Berhane Mewa is not only the former president of the Ethiopian and Addis Ababa Chamber of Commerce and Sectoral Associations, but is also a lifetime patriot in Ethiopia’s private sector struggles against state domination in the economy. Before he was forced into exile eighteen years ago by the EPRDF regime, he took up the struggle to create an independent chamber system and a real private sector in Ethiopia.

An industrial chemist by profession, Berhane came back to Addis to process a pharmaceutical investment license, to the tune of USD 22 million. He already has a plastic and rubber factory, which he established before his exile to the US.

Despite positive signs in the politics arena, Berhane argues the chambers system is still far from defending the private sector’s interests and contributing to the economy. Ashenafi Endale was granted audience. Excerpts:

The Reporter: What was at the core of your struggle for the Ethiopian private sector?

Birhane Mewa: I was forced to leave Ethiopia eighteen years ago. The government at the time was not happy with struggle in the Chamber, to create a strong private sector. I had no political interests. But after I left Ethiopia, I became a member of Kestedemena and Coalition for Unity and Democracy (Kinijit) political parties in North America. I was the secretary in Kinijit’s international leadership wing.

After Kinijit’s leadership were released from prison, I went back to normal life and started working as a business consultant, and then as a project manager. Of course I traveled to Ethiopia in between to attend my wife’s funeral. But now, I came to Ethiopia to process an investment license.

We are in the process of establishing a pharmaceutical factory in Ethiopia, in cooperation with Ethiopians engaged in the pharmacy business in the US. In general, we are here following PM Abiy Ahmed’s (PhD) call to the diaspora.

What is the kind of Chamber you want to see in Ethiopia?

The Chamber was first established as ‘the Addis Ababa Traders Association,’ during the Emperor’s era. Then it was re-established as Ethiopian Traders Council. It was free and active in advising the government, until Derg completely changed that trend. Derg made memberships mandatory and all businesses had to pay a chamber membership fees after they get their licenses.

Derg also shrunk the number of board members representing the private sector in the council, from eleven to one. At that time, nine of the eleven board members were general managers of state corporations; with only Wubshet Werkalemahu was representing the private sector.

After EPRDF took power, the general managers of state corporations left the chamber. At the time, I was president of the Ethiopian Private Manufacturing Association. So I became vice president of the Chamber to close the vacuum. And when Kebour Gena left, I became president of the chamber, through competition.

The fundamental objective of the Chamber is to advise the government before it introduces polices that affect the private sector and the economy. The second is to provide services for the private sector including trainings, information and arbitration. We were successful on both. Both the Addis and Ethiopian Chambers won various international awards, including the ‘best chamber in Africa’ award.

Nonetheless, the EPRDF was working hard to create divisions amongst, Addis Ababa, regional and sectoral chambers and associations. I worked hard to cut out such divisions and create a stronger chamber. We also managed to get back the chamber’s assets taken by the government. We also managed to access 100,000 sq. m of land for the chamber, on which the Addis-Africa exhibition center is currently being established.

Where is (should be) the exact line between state and private sector roles in the economy?

In principle, the private sector is the backbone of the economy, especially in a free market system. But during the TPLF dominated EPRDF regime; the government tried to replace the private sector by state affiliated endowment companies and state owned enterprises, which are still under party control. They enjoy access to finance, bureaucratic support, information, monopoly and other privileges. This has been stunting the growth of the private sector. I am not sure whether the situation still changed. Party affiliations still control the media, not only businesses and the economy.

Besides those parastatals, there are private businesses parasitic on preferential treatments, provided from the parties. Preferential treatment is still given for businesses, in accessing land, finance, foreign currency, and other privileges. A real private sector, which is self-created and hardworking, is very limited in Ethiopia.

The parties and government affiliated private sectors, still prevail, only changing its face. If you look at past private businesses currently, it is not hard to find a party or state support.

The right private sector should be represented only by the Chamber. It should be free, with no political interests, but defend the interests of the private sector. When we say ‘private sector’, it includes the street vendor and Gulit, to the factory and bank owners. The similarity amongst them is that they have a business license, and a common interest. There are various obstacles that hinder the chamber.

Ethiopia’s future depends on the real private sector. Foreign Direct Investments are also necessary but the domestic private sector is critical in terms of self-sufficiency, sovereignty and retention of repatriation. FDI’s can leave anytime.

Even in the USA, the private sector supports either democrats or republicans. Can a real private sector exist without any affiliation with the ruling party?

If you go to Mercato, everyone works for their own interests. They are not paid by the government but they pay taxes to the government. What the government can do is improve and equalize the playing ground.

Of course the private sector in the US supports parties. The difference is corruption is legal in the US. It is called lobbying and it is not a crime. It is also regulated. But in Ethiopia, parties establish affiliated businesses and keep taking money. The biggest problem appears when the parties themselves engage in the business. This is the biggest problem in Ethiopia. Nobody knows where the money from public enterprises goes to.

Political parties must exit from businesses and the economy. In the US, individuals and businesses giving money to parties, is publicly known, and audited. The tax authority also knows it.

Do you think the existing private sector in Ethiopia can be changed into a real private sector, or should we start over?

A real private sector is not something we create. What the government should do is create conducive environment for a ‘real private sector to emerge.’ It is the demand and supply dynamism that creates a real private sector. There are shoe shiners who have become millionaires. Did the government create them? Of course the government can facilitate support, but without political affiliation.

PM Abiy’s administration rolled out privatization and liberalization initiatives in the past three years. Do you think it is sufficient to re-balance the state dominated economy previously under the EPRDF?

There are positive signs but still some individual businesses are close to the government, instead of organized business communities under the Chamber. I do not think this is good. The government must recognize, capacitate and work with the Chamber. There are improvements regarding regulatory issues and public services. But still there is a chain of corruption in the government system. It is related to power and partisanships, which is a big obstacle that must be reduced. The government has good intentions. There are various issues studied and forwarded by the chamber and sectoral associations. Things will improve if the government reacts on those issues. If it does not start punishing corruption and avoid party affiliation and preferential treatments for selected businesses, the problem will get worse. It is the government that creates a corrupt private sector.

Corruption is also unavoidable when the public servants are paid meager salaries. The government must pay public servants sufficiently. So, corruption is high not because people are bad, or the officials are greedy, but the civil servant takes corruption as supplementary revenue.

The government also drafted a new proclamation to re-establish the Chamber. The draft proposes membership as mandatory, among others. How can a strong chamber be established? Recently, two chamber officials also defected to the US. Why is there always an internal feud inside the chambers structure?

There is a structural problem in the Chamber. It is intentionally created. Making memberships mandatory generates revenue for the chamber. But it hinders the chambers from providing quality service for their members. This was seen during the Derg regime. Immediately after the EPRDF came, it worked hard to weaken all institutions, including the chamber, teachers association, and others. The EPRDF made memberships willingly, to shrink the chamber’s revenue and finally close the chamber due to a lack of fund. But we managed to survive, by improving services and generating revenue from creative works.

Especially, the Addis Ababa Chamber became stronger, at the time, while there were some problems in the Ethiopian Chamber of Commerce. When I was about to leave, there were efforts to change the Chamber’s laws and the government wanted to re-design the Chamber, to fit to the politics.

The Chamber serves wherever there are private businesses, not government structures or political leaderships. But the government shadowed and dominated cities’ chambers, by chambers of regional states. These regional state chambers are under the control of party officials. The Ethiopian chamber also fell under the influence of party members. We tried to avoid those influences and somehow succeeded to maintain a Chamber that represents only the interest of businesses.

The proclamation tried to further divide the chamber across sectors, on top of the regional structure, dissecting the interest of the private sector. Kiosk and garage owners have different interests, but also have common interests. These specific interests should be solved under sectoral associations, and their common interest under the chamber. But what the government did is bundle the sectoral associations and the Chamber together. Businesses with different interests sat on the same table, and failed to agree. So, there is still a structural problem.

I have seen the new draft proclamation too. We are unfortunate the draft did not address the problem still. The chambers and the business community still did not reach a consensus on the draft. The Addis Ababa and Ethiopian chambers are in agreement and sectoral associations have also their won perspectives.

Chambers should work only on general issues that represent the common interests of all businesses and the economy at large, aided by sectoral associations formed separately, representing interests of businesses in specific sectors. Thus, the chamber and sectoral associations should be established separately. I do not know the status of the draft proclamation currently, but if it is ratified, it would take another generation to amend.

So, do you believe the Ethiopian chamber should be the all-encompassing strong umbrella?

Not necessarily. My point is the chamber system should be separate from sectoral associations. Whether at local, cities or a national level, chamber must be strong. But they must align. The issue of sectoral associations is completely different. For instance, leather industries have problems that can be solved both through the chamber, and their association platforms. This is the right way.

For instance, there was the Ethiopian Manufacturing Industries Association. It was challenging the government regarding manufacturer’s interests. Its strong momentum even empowered the chamber. Then the EPRDF practically dismantled it. It even prohibited the association from renting an office. The EPRDF regime never wanted such strong associations and chambers. The reason why the government overlapped chambers and sectoral associations is to deny them on common grounds.

If the draft is ratified, it only maintains the problem. Currently, the government’s system prefers individual businesses, than the organized private sector.

So the draft should be revised and discussed again?

The process of crafting the proclamation has problems from its very inception. The chamber members and business communities have no consensus on the draft. The Ethiopian, Addis Ababa, and regional chambers must sit down and discuss on the issue.

The Ethiopian government is trying to allure investments by the diaspora. If the diaspora invest and save in US banks, or in Ethiopia, which return on investment is attractive? Or do you think the government should design incentive packages for the diaspora?

Businesses in Ethiopia are more profitable than other countries. The reason the US government devised AGOA from the beginning, is because African businesses can be profitable. Even in terms of savings, the return in Ethiopia is higher than Europe or elsewhere. The problem in Ethiopia is not on returns, but convertibility. Repatriation might be difficult. Saving in Ethiopia by itself is profitable, let alone investment. There are so many profitable business sectors in Ethiopia. Many sectors are emerging, and not exploited yet.

The other problem is that the Ethiopian diaspora has lost trust in the government back home. So, the current government must reverse that perception, through transparency, commitment and service efficiency.

Thirdly, the diaspora needs information supply on feasible businesses and projects in Ethiopia. Then the diaspora can form share companies, joint ventures, PLC’s or other investment modalities. If the diaspora know feasible businesses and the laws, then they can invest. Currently, the diaspora is placing their money on the stock market and other businesses abroad. They can divert that money to go back home.

Especially, the profitability in the financial industry in Ethiopia is very lucrative; but the government should facilitate currency convertibility. Plus, most diaspora’s in Europe and the US left Ethiopia three to four decades ago. They are at s retirement age now. So if the health system in Ethiopia is improved, most diaspora’s would prefer to go back to Ethiopia.

The diaspora also wants transparent systems to complain in cases of corruption and bad services. There is corruption in Europe and the US. But it is political corruption not work corruption. Political corruption is trying to twist or influence introduction of policies, proclamations or directives. Work corruption is bribing officials, institutions, and public services. There must be a complaint window for this.

The west has been shifting away from Ethiopia and imposed sanctions. Substantial number of Ethiopians vote, especially in the US. Can Ethiopians and black Africans use their voting power to discard unfavorable officials or parties in the US or influence to reverse such sanctions?

The diplomatic system has a more crucial role in this. To be specific, the US faced unprecedented situation in Ethiopia. A government that refuses foreign pressure emerged in Ethiopia.

The US even used the UNSC to pressurize Ethiopia, meeting twelve times within six months. On top of the strong refusal of the Ethiopian government to surrender, the #nomore movement strengthened the support for Ethiopia, rallying Africans behind Ethiopia. The movement is stronger than election powers. The movement eroded US’s credibility in Africa, and in the world.

Even during calls that Addis Ababa will fall to the hands of insurgents, one million diaspora opted to come back home. I believe Ethiopia will regain its rightful place in the international stage.

Unlike any time before, the diaspora is on the same page now, regarding national issues. Before this, the diaspora’s were highly divided and turned against each other. The division created a negative energy. If the diaspora was united before, the EPRDF could have been long gone. The Diaspora and opposition figures abroad were used to strife, not unity.

Can we say that the US’s pressure is normalizing since the tension with China over the horn escalated?

Their strategy differs. The US wants to ensure its interests through political influence, while China does it through investment and economic empowering. The US’s and China’s struggles will continue, whether Ethiopia is there or not. China, Russia, Turkey, Iran and India, to some degree, are joining the friction now. They have certain interests with or against the US.

The US’s fear is not what China will do in Ethiopia, but the kind of measures Ethiopia takes. For instance, Ethiopia’s normalization with Eritrea and the alliance with Somalia is a threat for the US. When the US told Ethiopia to stop the war, Ethiopia rather turned a deaf ear. Ethiopia filled the renaissance dam, when the US opposed it. These are some of the bold moves against US interests.

These moves have nothing to do with China, but they are decisions emanating from the nature of Ethiopians. So, the confrontation between the US and China continues, while Ethiopia strides to protect and implement its national interests fully.

I do not think Ethiopia will completely shift its diplomatic ties towards China. Imperialism is always imperialism, but it changes its face. The US always wants a government that listens to them. If a government refuses to carry out their interest, they depose that government, including assassinations. In cases such as Libya, Iraq and Syria, the US’s footprints in the countries politics can be seen from afar.

The US put the same type of pressures that worked before, and in Ethiopia’s case, it has failed. But the pressure will continue. Ethiopia has passed a major obstacle. Yet, Ethiopia needs to sharpen its diplomacy more.

At what stage is your investment process currently? What are your future plans?

We are establishing the pharmaceutical factory in Ethiopia, in collaboration with highly professional pharmacists, scientists and business people in the Ethiopian diaspora. Finance, knowledge and vision are required to establish a medicine factory. If you have capital, you can buy knowledge, since it is a commodity.

Our vision is to manufacture medicine and medical equipment’s in Ethiopia and provide for Ethiopians. It is not even about profits. We wanted to improve the medicine supply shortages in Ethiopia.

We have been preparing for the past two years. We came to invest in Ethiopia, amidst the rhetoric that Addis Ababa is about to fall. Our team strongly believes in Ethiopia. Currently, we are processing the investment license.

How much is the investment?

The initial investment will take us between USD 20 million to USD 22 million.

What is your conclusion on the soundness of the Ethiopian economy, especially in post-pandemic and post-conflict endeavors?

My first impression when I came to Ethiopia after almost two decades was that all the negative narratives about Ethiopia and Addis Ababa are wrong. There is still an active economy. Across streets of Addis Ababa, day and night, residents are scrambling to buy from street vendors. This indicates to a huge demand in the economy. This is a living economy.

But it does not mean there are no problems in the economy. There is a forex shortage, industrial inputs shortages, logistics problems and others. Yet, the economy has a big potential, especially if public services are improved, corruption is eliminated and bureaucracy is improved.

Do you think the government should maintain protectionism?

The US and Europe are not afraid of protectionism. Why should Ethiopia be afraid of it? Ethiopia is eager to join the WTO. But Europe is still protecting its agriculture. The US is prohibiting import of wood, aluminum and other items, especially trump did everything to protect local industries. So, Ethiopia must also protect its industries.

After America banned Ethiopia from the AGOA, US companies left the Hawassa industrial park. If it is a local factory, they would not do so.

Before, the US’s private sector had no national interest, instead they go for profits. That is why US industries moved factories to China, in search of a cheap labor. But now, the US government is asking them to come back and create jobs in the US.

The country needs a nationalist private sector. The private sector cannot just seek profits and become a pure capitalist. It must contribute to the social wellbeing and development of the country.

Even FDI’s must be undertaken in a joint venture scheme. If it has a local element, the investment can be sustainable.

How can one balance profit seeking versus national interests? Scholars also say the psychological make-up of Ethiopians is not compatible for capitalism.

Corporate governance, labor unions and social responsibility can balance capitalism. National security should be a concern of the private sector. If there is no security, there is no transport, meaning there is no market. Drought should concern the private sector. These make the private sector become a nationalist by default.

One of the major tasks of the Chamber is to make businesses discharge their social responsibility.

Thus, your conclusion is capitalism can work in Ethiopia.

The old way of capitalism, which is seeking only profits, does not exist anymore. Of course, you are responsible for your shareholders and board members. At the same time, you have to be responsible to the society.

Why you are not investing in the banking sector rather than pharmaceuticals?

The government said it opened the banking sector for the diaspora, but still, there are unsettled problems. It said the diaspora had to invest in foreign currency. This is an obstacle.

But the major reason I joined the pharmaceutical project, is because it is a matter of professionalism. Manufacturing is difficult in Ethiopia. We have a big purpose to bring change in the medical supply shortage in Ethiopia. We will produce capsules and tablets. We will also export, once we address the domestic demand. The company will also establish an R&D wing, which will conduct studies for other firms. Most of the founders are also researchers.

Are you a chemical engineer by profession?

I studied chemistry. I also studied industrial chemistry at Bahir Dar polytechnic. I already have a factory in Ethiopia, which produces plastic and rubber. It is expanding now.

Berhane Mewa is not only the former president of the Ethiopian and Addis Ababa Chamber of Commerce and Sectoral Associations, but is also a lifetime patriot in Ethiopia’s private sector struggles against state domination in the economy. Before he was forced into exile eighteen years ago by the EPRDF regime, he took up the struggle to create an independent chamber system and a real private sector in Ethiopia.

An industrial chemist by profession, Berhane came back to Addis to process a pharmaceutical investment license, to the tune of USD 22 million. He already has a plastic and rubber factory, which he established before his exile to the US.

Despite positive signs in the politics arena, Berhane argues the chambers system is still far from defending the private sector’s interests and contributing to the economy. Ashenafi Endale was granted audience. Excerpts:

The Reporter: What was at the core of your struggle for the Ethiopian private sector?

Birhane Mewa: I was forced to leave Ethiopia eighteen years ago. The government at the time was not happy with struggle in the Chamber, to create a strong private sector. I had no political interests. But after I left Ethiopia, I became a member of Kestedemena and Coalition for Unity and Democracy (Kinijit) political parties in North America. I was the secretary in Kinijit’s international leadership wing.

After Kinijit’s leadership were released from prison, I went back to normal life and started working as a business consultant, and then as a project manager. Of course I traveled to Ethiopia in between to attend my wife’s funeral. But now, I came to Ethiopia to process an investment license.

We are in the process of establishing a pharmaceutical factory in Ethiopia, in cooperation with Ethiopians engaged in the pharmacy business in the US. In general, we are here following PM Abiy Ahmed’s (PhD) call to the diaspora.

What is the kind of Chamber you want to see in Ethiopia?

The Chamber was first established as ‘the Addis Ababa Traders Association,’ during the Emperor’s era. Then it was re-established as Ethiopian Traders Council. It was free and active in advising the government, until Derg completely changed that trend. Derg made memberships mandatory and all businesses had to pay a chamber membership fees after they get their licenses.

Derg also shrunk the number of board members representing the private sector in the council, from eleven to one. At that time, nine of the eleven board members were general managers of state corporations; with only Wubshet Werkalemahu was representing the private sector.

After EPRDF took power, the general managers of state corporations left the chamber. At the time, I was president of the Ethiopian Private Manufacturing Association. So I became vice president of the Chamber to close the vacuum. And when Kebour Gena left, I became president of the chamber, through competition.

The fundamental objective of the Chamber is to advise the government before it introduces polices that affect the private sector and the economy. The second is to provide services for the private sector including trainings, information and arbitration. We were successful on both. Both the Addis and Ethiopian Chambers won various international awards, including the ‘best chamber in Africa’ award.

Nonetheless, the EPRDF was working hard to create divisions amongst, Addis Ababa, regional and sectoral chambers and associations. I worked hard to cut out such divisions and create a stronger chamber. We also managed to get back the chamber’s assets taken by the government. We also managed to access 100,000 sq. m of land for the chamber, on which the Addis-Africa exhibition center is currently being established.

Where is (should be) the exact line between state and private sector roles in the economy?

In principle, the private sector is the backbone of the economy, especially in a free market system. But during the TPLF dominated EPRDF regime; the government tried to replace the private sector by state affiliated endowment companies and state owned enterprises, which are still under party control. They enjoy access to finance, bureaucratic support, information, monopoly and other privileges. This has been stunting the growth of the private sector. I am not sure whether the situation still changed. Party affiliations still control the media, not only businesses and the economy.

Besides those parastatals, there are private businesses parasitic on preferential treatments, provided from the parties. Preferential treatment is still given for businesses, in accessing land, finance, foreign currency, and other privileges. A real private sector, which is self-created and hardworking, is very limited in Ethiopia.

The parties and government affiliated private sectors, still prevail, only changing its face. If you look at past private businesses currently, it is not hard to find a party or state support.

The right private sector should be represented only by the Chamber. It should be free, with no political interests, but defend the interests of the private sector. When we say ‘private sector’, it includes the street vendor and Gulit, to the factory and bank owners. The similarity amongst them is that they have a business license, and a common interest. There are various obstacles that hinder the chamber.

Ethiopia’s future depends on the real private sector. Foreign Direct Investments are also necessary but the domestic private sector is critical in terms of self-sufficiency, sovereignty and retention of repatriation. FDI’s can leave anytime.

Even in the USA, the private sector supports either democrats or republicans. Can a real private sector exist without any affiliation with the ruling party?

If you go to Mercato, everyone works for their own interests. They are not paid by the government but they pay taxes to the government. What the government can do is improve and equalize the playing ground.

Of course the private sector in the US supports parties. The difference is corruption is legal in the US. It is called lobbying and it is not a crime. It is also regulated. But in Ethiopia, parties establish affiliated businesses and keep taking money. The biggest problem appears when the parties themselves engage in the business. This is the biggest problem in Ethiopia. Nobody knows where the money from public enterprises goes to.

Political parties must exit from businesses and the economy. In the US, individuals and businesses giving money to parties, is publicly known, and audited. The tax authority also knows it.

Do you think the existing private sector in Ethiopia can be changed into a real private sector, or should we start over?

A real private sector is not something we create. What the government should do is create conducive environment for a ‘real private sector to emerge.’ It is the demand and supply dynamism that creates a real private sector. There are shoe shiners who have become millionaires. Did the government create them? Of course the government can facilitate support, but without political affiliation.

PM Abiy’s administration rolled out privatization and liberalization initiatives in the past three years. Do you think it is sufficient to re-balance the state dominated economy previously under the EPRDF?

There are positive signs but still some individual businesses are close to the government, instead of organized business communities under the Chamber. I do not think this is good. The government must recognize, capacitate and work with the Chamber. There are improvements regarding regulatory issues and public services. But still there is a chain of corruption in the government system. It is related to power and partisanships, which is a big obstacle that must be reduced. The government has good intentions. There are various issues studied and forwarded by the chamber and sectoral associations. Things will improve if the government reacts on those issues. If it does not start punishing corruption and avoid party affiliation and preferential treatments for selected businesses, the problem will get worse. It is the government that creates a corrupt private sector.

Corruption is also unavoidable when the public servants are paid meager salaries. The government must pay public servants sufficiently. So, corruption is high not because people are bad, or the officials are greedy, but the civil servant takes corruption as supplementary revenue.

The government also drafted a new proclamation to re-establish the Chamber. The draft proposes membership as mandatory, among others. How can a strong chamber be established? Recently, two chamber officials also defected to the US. Why is there always an internal feud inside the chambers structure?

There is a structural problem in the Chamber. It is intentionally created. Making memberships mandatory generates revenue for the chamber. But it hinders the chambers from providing quality service for their members. This was seen during the Derg regime. Immediately after the EPRDF came, it worked hard to weaken all institutions, including the chamber, teachers association, and others. The EPRDF made memberships willingly, to shrink the chamber’s revenue and finally close the chamber due to a lack of fund. But we managed to survive, by improving services and generating revenue from creative works.

Especially, the Addis Ababa Chamber became stronger, at the time, while there were some problems in the Ethiopian Chamber of Commerce. When I was about to leave, there were efforts to change the Chamber’s laws and the government wanted to re-design the Chamber, to fit to the politics.

The Chamber serves wherever there are private businesses, not government structures or political leaderships. But the government shadowed and dominated cities’ chambers, by chambers of regional states. These regional state chambers are under the control of party officials. The Ethiopian chamber also fell under the influence of party members. We tried to avoid those influences and somehow succeeded to maintain a Chamber that represents only the interest of businesses.

The proclamation tried to further divide the chamber across sectors, on top of the regional structure, dissecting the interest of the private sector. Kiosk and garage owners have different interests, but also have common interests. These specific interests should be solved under sectoral associations, and their common interest under the chamber. But what the government did is bundle the sectoral associations and the Chamber together. Businesses with different interests sat on the same table, and failed to agree. So, there is still a structural problem.

I have seen the new draft proclamation too. We are unfortunate the draft did not address the problem still. The chambers and the business community still did not reach a consensus on the draft. The Addis Ababa and Ethiopian chambers are in agreement and sectoral associations have also their won perspectives.

Chambers should work only on general issues that represent the common interests of all businesses and the economy at large, aided by sectoral associations formed separately, representing interests of businesses in specific sectors. Thus, the chamber and sectoral associations should be established separately. I do not know the status of the draft proclamation currently, but if it is ratified, it would take another generation to amend.

So, do you believe the Ethiopian chamber should be the all-encompassing strong umbrella?

Not necessarily. My point is the chamber system should be separate from sectoral associations. Whether at local, cities or a national level, chamber must be strong. But they must align. The issue of sectoral associations is completely different. For instance, leather industries have problems that can be solved both through the chamber, and their association platforms. This is the right way.

For instance, there was the Ethiopian Manufacturing Industries Association. It was challenging the government regarding manufacturer’s interests. Its strong momentum even empowered the chamber. Then the EPRDF practically dismantled it. It even prohibited the association from renting an office. The EPRDF regime never wanted such strong associations and chambers. The reason why the government overlapped chambers and sectoral associations is to deny them on common grounds.

If the draft is ratified, it only maintains the problem. Currently, the government’s system prefers individual businesses, than the organized private sector.

So the draft should be revised and discussed again?

The process of crafting the proclamation has problems from its very inception. The chamber members and business communities have no consensus on the draft. The Ethiopian, Addis Ababa, and regional chambers must sit down and discuss on the issue.

The Ethiopian government is trying to allure investments by the diaspora. If the diaspora invest and save in US banks, or in Ethiopia, which return on investment is attractive? Or do you think the government should design incentive packages for the diaspora?

Businesses in Ethiopia are more profitable than other countries. The reason the US government devised AGOA from the beginning, is because African businesses can be profitable. Even in terms of savings, the return in Ethiopia is higher than Europe or elsewhere. The problem in Ethiopia is not on returns, but convertibility. Repatriation might be difficult. Saving in Ethiopia by itself is profitable, let alone investment. There are so many profitable business sectors in Ethiopia. Many sectors are emerging, and not exploited yet.

The other problem is that the Ethiopian diaspora has lost trust in the government back home. So, the current government must reverse that perception, through transparency, commitment and service efficiency.

Thirdly, the diaspora needs information supply on feasible businesses and projects in Ethiopia. Then the diaspora can form share companies, joint ventures, PLC’s or other investment modalities. If the diaspora know feasible businesses and the laws, then they can invest. Currently, the diaspora is placing their money on the stock market and other businesses abroad. They can divert that money to go back home.

Especially, the profitability in the financial industry in Ethiopia is very lucrative; but the government should facilitate currency convertibility. Plus, most diaspora’s in Europe and the US left Ethiopia three to four decades ago. They are at s retirement age now. So if the health system in Ethiopia is improved, most diaspora’s would prefer to go back to Ethiopia.

The diaspora also wants transparent systems to complain in cases of corruption and bad services. There is corruption in Europe and the US. But it is political corruption not work corruption. Political corruption is trying to twist or influence introduction of policies, proclamations or directives. Work corruption is bribing officials, institutions, and public services. There must be a complaint window for this.

The west has been shifting away from Ethiopia and imposed sanctions. Substantial number of Ethiopians vote, especially in the US. Can Ethiopians and black Africans use their voting power to discard unfavorable officials or parties in the US or influence to reverse such sanctions?

The diplomatic system has a more crucial role in this. To be specific, the US faced unprecedented situation in Ethiopia. A government that refuses foreign pressure emerged in Ethiopia.

The US even used the UNSC to pressurize Ethiopia, meeting twelve times within six months. On top of the strong refusal of the Ethiopian government to surrender, the #nomore movement strengthened the support for Ethiopia, rallying Africans behind Ethiopia. The movement is stronger than election powers. The movement eroded US’s credibility in Africa, and in the world.

Even during calls that Addis Ababa will fall to the hands of insurgents, one million diaspora opted to come back home. I believe Ethiopia will regain its rightful place in the international stage.

Unlike any time before, the diaspora is on the same page now, regarding national issues. Before this, the diaspora’s were highly divided and turned against each other. The division created a negative energy. If the diaspora was united before, the EPRDF could have been long gone. The Diaspora and opposition figures abroad were used to strife, not unity.

Can we say that the US’s pressure is normalizing since the tension with China over the horn escalated?

Their strategy differs. The US wants to ensure its interests through political influence, while China does it through investment and economic empowering. The US’s and China’s struggles will continue, whether Ethiopia is there or not. China, Russia, Turkey, Iran and India, to some degree, are joining the friction now. They have certain interests with or against the US.

The US’s fear is not what China will do in Ethiopia, but the kind of measures Ethiopia takes. For instance, Ethiopia’s normalization with Eritrea and the alliance with Somalia is a threat for the US. When the US told Ethiopia to stop the war, Ethiopia rather turned a deaf ear. Ethiopia filled the renaissance dam, when the US opposed it. These are some of the bold moves against US interests.

These moves have nothing to do with China, but they are decisions emanating from the nature of Ethiopians. So, the confrontation between the US and China continues, while Ethiopia strides to protect and implement its national interests fully.

I do not think Ethiopia will completely shift its diplomatic ties towards China. Imperialism is always imperialism, but it changes its face. The US always wants a government that listens to them. If a government refuses to carry out their interest, they depose that government, including assassinations. In cases such as Libya, Iraq and Syria, the US’s footprints in the countries politics can be seen from afar.

The US put the same type of pressures that worked before, and in Ethiopia’s case, it has failed. But the pressure will continue. Ethiopia has passed a major obstacle. Yet, Ethiopia needs to sharpen its diplomacy more.

At what stage is your investment process currently? What are your future plans?

We are establishing the pharmaceutical factory in Ethiopia, in collaboration with highly professional pharmacists, scientists and business people in the Ethiopian diaspora. Finance, knowledge and vision are required to establish a medicine factory. If you have capital, you can buy knowledge, since it is a commodity.

Our vision is to manufacture medicine and medical equipment’s in Ethiopia and provide for Ethiopians. It is not even about profits. We wanted to improve the medicine supply shortages in Ethiopia.

We have been preparing for the past two years. We came to invest in Ethiopia, amidst the rhetoric that Addis Ababa is about to fall. Our team strongly believes in Ethiopia. Currently, we are processing the investment license.

How much is the investment?

The initial investment will take us between USD 20 million to USD 22 million.

What is your conclusion on the soundness of the Ethiopian economy, especially in post-pandemic and post-conflict endeavors?

My first impression when I came to Ethiopia after almost two decades was that all the negative narratives about Ethiopia and Addis Ababa are wrong. There is still an active economy. Across streets of Addis Ababa, day and night, residents are scrambling to buy from street vendors. This indicates to a huge demand in the economy. This is a living economy.

But it does not mean there are no problems in the economy. There is a forex shortage, industrial inputs shortages, logistics problems and others. Yet, the economy has a big potential, especially if public services are improved, corruption is eliminated and bureaucracy is improved.

Do you think the government should maintain protectionism?

The US and Europe are not afraid of protectionism. Why should Ethiopia be afraid of it? Ethiopia is eager to join the WTO. But Europe is still protecting its agriculture. The US is prohibiting import of wood, aluminum and other items, especially trump did everything to protect local industries. So, Ethiopia must also protect its industries.

After America banned Ethiopia from the AGOA, US companies left the Hawassa industrial park. If it is a local factory, they would not do so.

Before, the US’s private sector had no national interest, instead they go for profits. That is why US industries moved factories to China, in search of a cheap labor. But now, the US government is asking them to come back and create jobs in the US.

The country needs a nationalist private sector. The private sector cannot just seek profits and become a pure capitalist. It must contribute to the social wellbeing and development of the country.

Even FDI’s must be undertaken in a joint venture scheme. If it has a local element, the investment can be sustainable.

How can one balance profit seeking versus national interests? Scholars also say the psychological make-up of Ethiopians is not compatible for capitalism.

Corporate governance, labor unions and social responsibility can balance capitalism. National security should be a concern of the private sector. If there is no security, there is no transport, meaning there is no market. Drought should concern the private sector. These make the private sector become a nationalist by default.

One of the major tasks of the Chamber is to make businesses discharge their social responsibility.

Thus, your conclusion is capitalism can work in Ethiopia.

The old way of capitalism, which is seeking only profits, does not exist anymore. Of course, you are responsible for your shareholders and board members. At the same time, you have to be responsible to the society.

Why you are not investing in the banking sector rather than pharmaceuticals?

The government said it opened the banking sector for the diaspora, but still, there are unsettled problems. It said the diaspora had to invest in foreign currency. This is an obstacle.

But the major reason I joined the pharmaceutical project, is because it is a matter of professionalism. Manufacturing is difficult in Ethiopia. We have a big purpose to bring change in the medical supply shortage in Ethiopia. We will produce capsules and tablets. We will also export, once we address the domestic demand. The company will also establish an R&D wing, which will conduct studies for other firms. Most of the founders are also researchers.

Are you a chemical engineer by profession?

I studied chemistry. I also studied industrial chemistry at Bahir Dar polytechnic. I already have a factory in Ethiopia, which produces plastic and rubber. It is expanding now.

Aklilu Wubet is a veteran in the banking industry. He joined Wegagen Bank on March 2020 as the Vice President of Corporate Service, having served in different capacities in many financial companies, including the Commercial Bank of Ethiopia, in the last 25 years. He was also the deputy CEO of Nile Insurance, Bank of Abyssinia and Lion Bank, and also served as a lecturer at Addis Ababa University.

The Reporter’s Samson Berhane sat down with Aklilu to reflect on his journey at Wegagen and the challenges ahead, as the acting president attempts to bring the bank back to its usual top status it has held for the last two decades. Excerpts:

The Reporter: You have joined Wegagen during a challenging time, when it faces decline in revenue from different sources particularly due to the tense political situation in the country. How are things going since you joined the Bank?

Aklilu Wubet: Banking is always challenging, especially in a world where resources are limited. And leadership is critical during a challenging time. Leading a company during its challenging moments is a great task and makes me happy. Especially, if you have strong team, challenge is a good thing. One thing you should also understand is that Wegagen is still a very strong bank, despite the challenges it has faced.

When I decided to join the Bank, I was confident that I would overcome all the challenges by working with a strong management and team the Bank has. The conflict has impacted all commercial banks. Peace is very important for the industry than any segment of the economy since banks deal with liquid resources. The impacts of the war, in particular, were severe on us because we are among the financial institutions with large number of branches in the areas affected by conflict.

When I joined Wegagen, my priority was to help the Bank withstand the impacts of the war. That requires being prudent and to closely work with regulatory bodies, investors and other stakeholders.

In the last 25 years, Wegagen was among the most profitable financial institutions in Ethiopia. Why was it not solid enough to withstand the shock brought on by the war in Northern Ethiopia?

To begin with, the Bank has been effective in withstanding the impacts of the war. Even though the profit is low, and has declined drastically, it is still profitable. It still has a large customer base and a huge amount of assets. Thanks to the strong base, which the bank is built on; it has been successfully coping with the conflict, even though more than a third of its branches are closed.

The profitability of the Bank in the last two decades has helped it build its asset base, enabling it to withstand the impacts of the war. The rules of the central bank and its strong regulations have had its contribution in enabling us to remain strong in such a challenging period.

The strong expense management that we have applied and the strong marketing system implemented by our management team has also contributed to the success of the Bank. If it was not due to such factors, the history of the Bank would have been ruined. But thanks to our efforts, we have defied the prediction made by some, who have forecasted that we will face a loss due to the war. But we are still in a good shape.

We have devised a strategy and are also undergoing restructuring, and increasing the number of vice presidents we have. We are still among the big players in the industry, hiring elite bankers.

According to industry insiders, the bottom line in the banking industry is profits and shareholders’ return. How did you come to the conclusion that the Bank is in a good shape, while its profit dwindled from one billion birr to 193 million birr?

Business is not only about making profits. Business is about being sustainable and staying competitive in an industry. The conflicts, coupled with macroeconomic challenges, have impacted the banking industry last year and banks would have profited much higher than they did, if there was peace.

Wegagen has declared a positive profit, while much of its branches are closed, and at a period when it was not able to collect loans given to businesses operating in war-affected areas. We even held a provision in case of loan defaults. We did not use a penny from the capital invested by shareholders, despite being in the midst of series of challenges. Overall, our objective was to make Wegagen the bank of all Ethiopians, by making it solid. I believe we have been successful in doing that.

There are critics that say Wegagen is a victim of an undiversified ownership structure which exists in the banking industry. Even though Wegagen is not the only financial institution established based on affiliation or along ethnic lines, some say its recent underperformance is an outcome of lack of diversification in terms of shareholders and customer base. Do you agree?

There are those that say banks are established based on affiliation.

Is that not the reality?

I cannot be sure because I have not had a chance to look through the list of shareholders of each commercial bank. In case of Wegagen, the story is different. Wegagen is wrongly misunderstood. If you see its shareholders, no bank is as Ethiopian as Wegagen. Its shareholders are highly diversified. Many big investors from different ethnic backgrounds have a stake in Wegagen. Name any investor and they are a shareholder of our bank. If you see the board, it is highly diversified. The same is also true if you see the management.

Did you bring that change?

No. I was the vice president 13 years ago at Wegagen and it was the same back then.

Okay, but in case of customer diversification, the reality is opposite to what you have said since the Bank’s profit declined drastically, when a third of its branches closed in one region. So is it not obvious that your bank did not work on diversifying its customer base?

Not only in Tigray. We also have many branches in Gambella and Somali than any other private banks. Of course, we have many customers in Tigray but that does not mean our customers in other areas like Addis Ababa are from the same region. We have over 2.5 million customers, way higher than the adult population eligible for banking services in Tigray. That shows how diversified our customer base is.

How about loan disbursement?

It is the same. More than 75 percent our loan portfolio is in Addis Ababa. However, in terms of deposits, the northern part of Ethiopia is known for being a big source. If you go to Mekelle, many commercial banks have many branches there. Some have more than seven or eight branches and the reason is obvious. This is because there is a good saving culture there. But that does not mean we have to work on the business mix because it is important to manage risks.

Then how did your non-performing loans surge because of the conflict if your borrowers are diversified?

We have provided five billion birr in loans to our customers in Tigray. We don’t know whether it can be paid or not because of the conflict. But that is enough to increase our non-performing loans. The whole industry faced similar problems because of the same reason. We held provisions in case of defaults. If it was not due to the higher provision we held, our profit would have been over one billion birr. That would be added to our income in the future, if we recover our loans. This means that we are investing in our future and if things go smoother and peace prevails, we hope things change drastically.

How is the liquidity position of Wegagen Bank? How capitalized is the bank?

We have a strong capital base. It used to be one of the largest in the industry, though some overtook us recently. Understanding its importance, our shareholders decided to raise the Bank’s paid-up capital to six billion birr before the end of the new deadline set by the central bank. We are also thankful that we don’t have a major shareholder because that gives us room for the management to do its job.

Regarding liquidity, when the central bank raised the reserve requirement from five to 10 percent, many feared that our bank would be among those that cannot meet the new threshold. But we are among the few banks that have fulfilled the requirement first. Our liquidity is now over 17 percent. However, that does not mean we are not facing liquidity shortages, because the whole industry is experiencing similar problems due to the sluggish growth of deposits.

Shareholders want to know when the bank would reach pre-war levels in terms of profitability. When do you think that would happen?

There are two assumptions. The first assumption is that the war would stop, peace would prevail and the government puts its energy towards the economy, a scenario which would benefit the banking industry. If peace prevails, our closed branches would be opened. We will be fully operational and our deposits would surge.

The second assumption is that if the conflict continues, we will operate with our existing resources and branches that are active. New banks are joining the industry. So I am sure we can perform better even with our active branches. We have already devised a strategy to mobilize more resources. We are hopeful that we will return to pre-war levels by the next general assembly.

Founded in September 2017, Eshi Express is a pioneer and one of the successful startups in tech-based delivery businesses, in an emerging business frontier in Ethiopia. Tigabu Haile, co-founder and CEO of Eshi Express sat with Ashenafi Endale of The Reporter, to talk about his business journey.

Excerpts:

The Reporter: What was the business pitch behind Eshi?

Tigabu Haile: If you buy an avocado in Yirgalem, it is around five birr per kilogram. But in Addis Ababa, it is around35 birr. So, we believed that Ethiopia needs an efficient logistics system in the supply and logistics service. Even in Addis, we do not see companies that provide end-to-end payment systems, sourcing and delivery services.

Sending packages in Addis is expensive. There are players like DHL, the Post Office and individual motorcycle owners. But Eshi can provide the service up to 50 percent cheaper than the market.

Basically, Eshi is a logistics company. So, how do you manage your fleet? What are the types of services you provide?

We have three types of services. We have Express service, in which we deliver any package in Addis within 90 minutes. The second type is delivery in half a day. If you order in the morning, we deliver in the afternoon. We charge 90 birr anywhere in Addis. The third category is delivery in 24 hours, which costs 70 birr anywhere in Addis.

Our main operation is in Addis. We use vans, pickups, motors and other types of vehicles. Most of the Ethiopian population is in the regions. We believe the logistics problem in the supply chain can be best addressed if we expand to regional states. Currently, we have been in the piloting phase in Adama and Hawassa, since last year. We will reach other regions in the next two years.

Do you own the whole fleet of vehicles?

We deployed the hybrid model. Around ten motorcycles and a van are owned by Eshi. But owning many vehicles is not feasible, so we stopped purchasing vehicles. We launched a technology six months ago, that enables any individual vehicle owner to register to our platform and deliver packages. Our model is called ‘from foot to fleet’. People can deliver on foot. Especially when we have big events, mass publications and other large deliveries many individuals deliver on foot.

How can these individuals or private vehicle owners access your platform? Is the technology similar to a taxi hailing platform?

It is almost similar but slightly different regarding registration system and insurance policies. Huge packages might be damaged in transit by individual vehicle owners. So, we always require courier insurance or insurance for goods in transit, for any private vehicle who works with Eshi.

How many vehicles that are not owned by Eshi are working with Eshi?

Right now we have more than 25 vans, pickups and different vehicles. There are also around fifteen motorcycles.

How many packages does Eshi deliver per day? How do you evaluate the demand?

The demand of the service is huge. There are thousands of delivery demands daily in Addis, while it is in the hundreds of thousands in the regions. The hard task is to make people use Eshi just once. Then they cannot stop using it.

Right now, Eshi delivers close to 115 packages per day. In the next three years, we plan to deliver thousands of packages daily.

How do you see the competition from other players in the market?

There is no really established company we see as competitors. There are legacy players like the DHL, Ethiopian Postal service, and individuals who have motorcycles. It is difficult for many startups to emerge and become competitors in this business.

Online payment, e-tax, e-commerce, delivery and packaging are involved in the business. How are these all done as one business?

Right now online transactions can happen but there are no e-receipts. It is impossible to make online transactions now. Payment is possible for internet and mobile banking. But if you cannot provide e-receipts, you cannot have a complete e-commerce transaction. There are shops that have an online presence. They just show their packages on their sites.

Does Eshi own warehouses or source from other suppliers?

Eshi collects the packages from companies who have warehouses. Receipt is issued traditionally. So, e-commerce is a work in progress. Eshi is the instrument that provides the logistics service. We do not sell any stuff online. Shopping happens between the customer and e-commerce companies. Once the order is placed and shopping done, either the customer or the e-commerce company orders Eshi to deliver the goods.

The number of e-commerce companies has increased since the COVID-19 pandemic. Has online delivery orders increased too?

E-commerce is taking off in Ethiopia and the government is also nearing to ratify the e-transaction law. All Shops will have an online presence. The outsourcing culture in Ethiopia is immature. Most companies want to do the e-commerce and delivery businesses by themselves. One company, especially startups, cannot handle both at the same time. So, after trying both for a year or two, they fail or specialize only in one.

Currently, big global e-commerce players are coming to Ethiopia. Probably they will launch in the next six months. Eshi has entered agreements with these global players, to do the delivery part. E-commerce companies should focus on what they can do best, because they cannot do it all, with limited time, energy and resources. We want to support their job, from the delivery side.

We will have many package drop-off points soon. If the customer is not at home when the delivery arrives, the drivers can place the packages at those points and the client can take it at anytime. This way, we are planning to drop many deliveries within one kilometer radius. This reduces our cost. That is why we charge 50 percent cheaper than the market. One delivery vehicle can cover many shops, pharmacies and supermarkets within an area.

Does Eshi plan to deliver beyond Ethiopia?

Ethiopia will operationalize the Africa Free Trade Agreement (AfCFTA) soon. Intra-Africa trade will boom in the near future. Eshi plans to become a Pan-African Delivery Company within the next three years.

Lack of automated addressing is a major bottleneck to delivery businesses in Addis. How are you solving it?

Absence of digital address system is a major problem for social services, health, banking, census, elections, apart from delivery business. Address is critical. If you do not have an address, you do not exist. Due to the lengthy communication between our delivery dispatches and clients, and usually missing locations, Eshi is losing resources, time and energy. The customer experience is also bad, because it is annoying when delivery personnel call repeatedly to find the address.

Currently, we have a project in the pipeline, named Eshi Locator, with our technology partner. It gives a code to each house’s. The codes are regenerated, when our partner localize using Google technology. We will imbed Google generated codes into our technology. It will take some time. Right now we are using Google maps, to locate the customer. But this has accuracy problems. Many things should improve to solve the location issue. Eshi Locator will be the solution.

What about using GPS locations or networks, if the customer uses a smart phone?

There are four mechanisms to order on Eshi Express. Customers can order on our website, use an application in Play Store, or call on one of our call centers. For Customers who have mass orders, like event organizers, big corporate or ecommerce companies, we have a separate technology platform, which can receive bulk orders and integrate it to our fleet system.

How much is the profit?

We cannot say it is profitable, even after staying four years in the business. At least we have survived, because we could also fail. The global data shows, less than two of ten startups celebrate their fifth year of establishment. Initiating and running a startup is very difficult. Access to capital is one of the biggest problems.

Was Eshi an angel investment?

Initially, Eshi was founded by me and my partner, who has similar business ideas with me. Eshi started with 1.3 million birr. We saved up the capital. We have also advisors. Last year, the Addis Ababa Angel Investors Network invested in Eshi. Delivery business is a capital, technology and skill intensive venture. You need to hire highly talented people. You have to scale-up fast. We hope the profit will come soon, once our delivery capacity grows.

So the angel investors are shareholders now. How much did they inject in the company?

We have an agreement not to disclose the amount. They injected the capital and immediately became shareholders. We gave them equity share worth their capital injection.

So return on investments has not come to fruition yet?

It will take time, especially with startups like us, in which you have to hire huge staff. No question, we are solving one of the top five challenges in Ethiopia. Lack of efficient logistics in the system is a major reason behind the rising inflation in Ethiopia. Food is being wasted because it cannot reach the market. For instance, there is surplus in the southern part of Ethiopia, while it is extremely scarce in the northern part of the country. That is because we do not have a robust logistics system.

Eshi still needs more cash injections to scale-up its capacity. Delivery is not only about packages, it is about the stories behind the packages. For instance the national blood bank of Ethiopia is one of our customers. We deliver blood every day. We collect blood from donation centers to the national blood bank. People are living because of that. NEBE is also among our customers. We did almost all deliveries in the past national election. We are behind the success of many big achievements. We are becoming instrumental in delivery in Ethiopia.

How many institutional customers do you have?

Currently it is close to 35. For instance, we deliver laboratory results for hospitals, on a daily basis. Embassies, hotels, optical shops, are some of them.

What are the incentives provided by the government for delivery companies, such as allowing duty free import of vehicles?

The government is not providing any support or incentive for delivery companies. There were no private courier service providers in Ethiopia, for long. So, only the Post Office and the DHL were known in this business.

For instance, driving motorcycles has been banned under the State of Emergency since some individuals might use motorcycles for crime. But Eshi had hired many staff, branded the motorcycles and there is no way motorcycles registered under delivery companies can be used for crimes. After all, we are delivering critical packages like blood and other essential services.

Secondly, there is an extreme lack of clarity among government institutions, regarding delivery businesses. Especially, the tax authorities are creating major obstacles to delivery companies. The government has no clear policy on delivery businesses, let alone support incentives. The delivery sector could not grow in Ethiopia, because the government has failed to understand it as a newly emerging sector.

There is the Ethiopian Couriers Association, to which Eshi Express is the board president. The association is trying to change the grim fate of the sector. We have submitted a letter to the government, asking the ban on motorcycles of delivery companies to be lifted. But the response from the government is slow.

Motor cycles cannot move after 6PM. So, we are forced to stop taking orders after 4PM. Otherwise, we cannot deliver last minute orders until the next day. This is especially affecting food delivery courier companies, because there orders are largely during dinner times.

What is the government’s response to the associations’ letter?

It has been three weeks since the association submitted the letter. But the government says it is still being considered. The letter was submitted to the Addis Ababa traffic management office. The city transport bureau has also failed to respond.

A new logistics regulation allows up to 49/51 partnership with foreign logistics companies. Is Eshi considering a joint venture with foreign companies?

JV is allowed for logistics companies engaged in sea, air and land transport. Ours is light package and fast delivery logistics. So JV is not allowed for us.

How much does the absence of e-receipts affect your business? How does Eshi cover the costs, if delivery is defaulted?

Online ordering, online payment, and e-receipts are not active at a national level in Ethiopia. Ethiopians consider online shopping, or e-commerce, as a luxury service reserved only for developed countries. That is acutely wrong. Delivery services extremely benefit developing countries. The purpose of e-commerce is to cut expenses and reduce prices. Companies do not have to open shops everywhere. So, it cuts out rental costs. End user customers also usually visit as many shops, to find a reasonably priced good. With e-commerce, you can find any items at your fingertip. You can order a delivery company, saving your time, energy and money.

The progress slows in Ethiopia, because the digitization pace is slow. But the Parliament is currently working on the e-transaction proclamation. The draft document has been under review for a year now. The Ministry of Science and Technology crafted the document and the Council of Ministers has passed it on to the Parliament. It was said that it would be ratified before the current Ethiopian year enters. But I think it is delayed because the government is busy due to the war.

But even after the proclamation is ratified, is there the technology that interfaces with the payment facilitator, end user, delivery companies, shops, tax authority and other regulators?

Eshi has end-to-end technology that enables the ordering and tracking of goods. The technology also enables us to publish the transactions in excel or PDF file formats.

E-commerce companies also have a similar technology. Ethiopia has all the basic ingredients to kick start e-commerce. We have the laws, graduates, and emerging e-commerce companies. The service quality will improve gradually.

Does Eshi use other payment mechanism like mobile money, tele birr and others, apart from e-commerce companies?

So far, our transaction is largely cash-based. But we are integrating with Fintechs like tele birr, CBE birr and others.

The starting price for delivery of a kilogram of package is 20 birr. It increases by12 birr per additional kilometer and three birr per additional kilogram.

How do you evaluate the competition with other emerging delivery companies?

It is difficult to say there is stiff competition. There are delivery companies that participate in bids with us. A lot of institutions like banks float bids for their bulk delivery contracts. There are only close to six active players.

The DHL, the Ethiopian Postal Service and Balderasu are active in Addis, while there are other startups emerging in regional delivery services. The DHL has no interest in the domestic delivery business in Ethiopia, leaving the market in Addis for us. Even in Europe, DHL works with local companies, specializing on the international market rather.

Close to 100,000 packages are delivered in Addis Ababa every day. Eshi, which delivers 115 packages per day, is comparatively better performing, than other players. Yet, the share of delivery companies is completely insignificant, relative to the demand.

All of close to six delivery companies in Ethiopia, including DHL and the Post office, are delivering less than 6,000 packages per day. The market is untapped.

The delivery demand in regional states is much higher than Addis. We have assessed the demand and mapped delivery services in 100 cities in Ethiopia. There is close to 200,000 package delivery demands in these cities.

Who is filling this demand now?

This demand is bridged traditionally. The Postal Service has some market share, but mostly; people send packages via cross-country buses. But this method of delivery has two major problems. First, it has no insurance if the package is damaged and second, the bus owners charge as they wish. Cross-country busses have no standard pricing for delivering packages.

Eshi is 100percent insured. When a client orders Eshi to deliver a package, the customer declares the value of the package. If it is damaged, Eshi refunds 100percent of the value stated.

Do you work with all insurance companies?

The local insurance industry is underdeveloped, thus, local insurance companies usually do not accommodate our insurance packages. So, we cover the insurance fund by ourselves. Eshi has been incurring cost due tothis. But now, we are communicating with insurance companies. All other delivery companies operating in Ethiopia do not have such insurance coverage, except for Eshi.

Is Eshi using its own vehicles for the piloting phase in Adama and Hawassa?

We deploy our own vehicles to deliver high risk packages. But usually, we use private vehicles which have insurance coverage.

Which sectors have high demand for delivery services, is it exporters, households, or wholesalers? And Ethiopia is ranked low on the logistics index. How can delivery companies improve this?

Our business is last mile delivery. We deliver from shops to end users, or consumers. Last mile delivery is the most difficult business in a given economy. One is due to a lack of precise addressing technology. It is also the most expensive logistics system. So the demand could be consumer goods, medication, and invitation or gift cards.

Last mile delivery also creates job opportunities. Millions of youth can deliver goods door to door. So, it is the best logistics sector for job creation. If we could make the delivery price cheaper, it can activate the economy, and affect millions of lives positively. It is a phenomenal sector.

By how much rate is Eshi growing from a startup to a large enterprise?

Our package delivery business size is growing at close to 10percentper month. It is not an impressive growth but we are making good progress.

We plan to grow by 15 percent on a monthly basis. Comparatively, Eshi is growing faster, because most of the delivery companies operating in regional states are highly affected by the conflict in Ethiopia.

How much does Eshi deliver in Adma and Hawassa?

Our delivery in these towns is just a couple of packages per day, for now.

But Blood Bank, the NEBE, Goh Betoch, Nile Insurance, Ramada hotel, hello market, and Ethswitch are some of our major institutional clients across the country. We do cash-up-on-delivery for our customers. We also provide full insurance coverage, which no delivery company does in Ethiopia. We also have warehouse for e-commerce companies.

Does Eshi directly buy goods and deliver?

Usually customers order e-commerce companies to supply the good. Then the e-commerce company orders us to deliver the packages to the customer who has placed the order. Hence,Eshi does not purchase the packages. The package is purchased by the e-commerce company. Since the customer cannot pay online, we collect the payments and give it to the companies, usually on a weekly basis.

If we directly engage in buying and delivering, it will take a huge capital. The e-commerce companies have the packages and the digital presence. I believe e-commerce should be much cheaper. Some e-commerce service providers give up to 15 percent discount, but the business is just taking up in Ethiopia. It is at very early stage.

Eshi does not want to play the role of e-commerce companies. If there are 40 e-commerce companies in Ethiopia, we do not want to become their competitors. Rather, we want to deliver their packages. But if there are packages not found in e-commerce warehouses and if Eshi can find those goods, we can supply it directly to the customer. Under this circumstance, we receive orders of packages worth less than 2,000 birr.

English Version News

Suzuki vehicle prices explode, shaking up the automobile industry

Yoseph Asfaw, a mid-level manager of one of the branches of Bunna Bank, was excited when he learnt he was eligible to take out a two million birr interest-free loan, courtesy of the performance his branch achieved last fiscal year. He did not hesitate to take the opportunity. After a few weeks of deliberation about what to buy with the money, he decided to purchase a vehicle. His choice was the 2022 model of the Suzuki Dzire, the most sought-after automobile in the car market. He was asked to pay 1.5 million birr.

“Are you sure I will recoup the money within a short period of time,” Yoseph asked the car retailer.

“Trust me, give it one month, and the price will surpass two million birr,” the retailer replied.

The trader was right. The price of Dzire 2022 has shot up to 2.2 million now, a development that helped Yoseph net a profit of 700,000 br in just a month. “You cannot get this money by saving or opening a trade store. And not surprising at all, given the volatility of the market,” said the banker, adding, “I don’t want to sell it as this is a treasure whose value appreciates every second, and the most profitable venture without adding value.”

It is not unusual to see the price of vehicles spike in Ethiopia. Cars are believed to be a big treasure, the same way apartments or houses are. A car costing less than USD 2,000 in neighbouring countries, the Toyota Vitz, costs nine times more in Ethiopia. The high tax on old cars, which could reach 500 percent, was used to justify the hike. Though the same is true for old cars now, the story is different in the case of new vehicles, a category given to automobiles produced within three years of imports.

Three years ago, the government introduced a new tax law to encourage the imports of new cars while discouraging the old ones. Such a reform was meant to make new cars cheaper, though it was a target that never materialized. A case in point is the Dzire 2022, an automobile imported through a duty-free scheme and flooded the market, along with other brands of Suzuki, including Espresso and Swift.

Toyota is still the dominant player in the vehicle market, though traders say Suzuki is now commanding the lion’s share, probably as high as 60 percent in the last two years. It is partly because the cost of new Toyota vehicles is higher than in the past, as older ones were less costly. For the same reason, Suzuki is the most preferred brand for importers now because the lower the cost, the lower the amount of foreign exchange importers needs to get.

“We get the forex from the parallel market with a premium, as banks barely cover the cost of the imported cars. Suzuki has become a preferred option for many importers as it is less costly and brings a better return with a higher profit margin than Toyota, which is expensive and requires a tiresome process to get the forex needed to import it from countries like Dubai,” said an importer.

Last year saw a spike in demand for new vehicles, largely due to the huge amount of finance availed by banks to borrowers eligible to take a loan to buy automobile. During the third quarter of the last fiscal year, 330 million birr was imported, twice what was imported in the preceding quarter. It is also 20 percent higher than what was imported during the same period in 2020/21. The increase is the outcome of the growing demand in the market, according to retailers. But that comes with a cost.

“The demand is way higher than the supply. We are receiving orders more than what is available in our stock,” said Ezra Hailemariam, marketing manager of Tamrin, one of the major market players in the car market and known for importing Suzuki brands.

The change in the global market has also contributed to the spike in price, according to Ezra.

“Over 90 percent of Suzuki cars are imported from India, which is not producing much now due to a shortage of inputs because of the tension between China and Taiwan, which is the major supplier of semiconductors for the factory in India,” Ezra added.

According to a senior company official, Maruti Suzuki said “it could not produce 51,000 units in the April-June quarter owing to the ongoing chip shortage situation.”

India’s largest carmaker, which sold 1.4 million vehicles this year, underscored that the semiconductor shortage is a challenge in planning its production activities.

“The electronics component shortages are still limiting our production volumes. In this quarter (Q1), the company could not produce 51,000 vehicles,” said Maruti Suzuki India (MSI) CFO Ajay Seth in an interview with a local media in India.

The scope of the fighting between government forces and militants of the Tigray People’s Liberation Front (TPLF) along the border of the Tigray region has widened with both sides acknowledging that the conflict has spread to more areas in addition to the area where it initially erupted. The fighting between government and TPLF forces resumed on August 24 after a five-month lull. Though combat had been heaviest around the southeastern border of Tigray, TPLF militants have pushed into the neighboring Amhara and Afar regions, sending residents fleeing. Clashes on the ground and air raids over Tigray have poured cold water on the efforts underway since June to find a peaceful solution to the 21-month war that began following an attack on federal army camps based in the region. The warring sides have accused each other of firing first and shattering the months-long relative calm that has been prevailing in the northern part of Ethiopia following the federal government’s announcement in March of a truce to allow humanitarian aid to be delivered to Tigray.

The federal government has also blamed what it calls the west and Ethiopia’s “historical enemies” for using the TPLF as a Trojan horse to advance their evil design on the nation. Ever since the administration of Prime Minister Abiy Ahmed (PhD) commenced a military operation in Tigray in November 2020 in response to attacks on the Northern Command of the Ethiopian National Defence Forces (ENDF) the country has been subjected to unprecedented pressure at the hands of Western governments, the U.N., mainstream media, think-tanks and rights groups. The U.S. particularly has sided with the TPLF, slapping a slew of sanctions on Ethiopia and withdrawing its benefits under the United States’ tariff-free African Growth and Opportunity Act (AGOA) while it gave the TPLF a slap on the wrist. Furthermore, the U.S. and its allies at the U.N. Security Council have tried over a dozen times to formally admonish Ethiopia but failed thanks to the vote of China, Russia and India. Apart from exerting undue diplomatic pressure, the West has also been waging an information warfare against Ethiopia through a disinformation campaign undertaken by the mainstream media, think tanks and so-called rights advocacy organizations. Its end-game, as some analysts plausibly argue, is to engineer a regime change or if that does not work to coerce Prime Minister Abiy’s administration into accepting to the demands of the TPLF.

It’s not only over the Tigray conflict that the West is pressurizing Ethiopia though. The filling and operation of the Grand Ethiopian Renaissance Dam (GERD) has been a bone of contention between Ethiopia, whose highlands supply more than 85 percent of the water that flows into the Nile River, and the lower riparian states of Sudan and Egypt. In 2020 the U.S. tried to force Ethiopia into signing a binding agreement on the filling period. The Ethiopian government declined to sign-off a U.S.-drafted agreement regulating the filling time of the dam, which Egypt insisted should be completed over 12-21 years, saying it has the right to fill the dam at its own pace and would do so in no more than seven years. Although Sudan initially supported the building of the dam, since then it has taken Egypt’s side on the ground that filling the dam without the agreement of downstream countries imperiled its national security. Again the Security Court, at the behest of Egypt and Sudan, convened on several occasions to consider a resolution calling on Ethiopia to cease filling the GERD’s reservoir and pushing for a binding agreement between the three sides on the operation of the dam but failed to adopt it.

The West’s motives driving its pressure campaign on Ethiopia, its long-standing regional ally, are purely self-centered and zero-sum. It is wary of Ethiopia’s pursuit of an independent foreign policy, which may very well frustrate the accomplishment of its strategic goal in the Middle East and Africa. First, Ethiopia’s apparent reluctance to do toe the West’s line has been perceived to make it harder to protect the interests of Egypt—the cornerstone of its Middle East policy. Second, its attempt to thread a needle as animosities between the West and China ramp up is not appreciated by the West, which feels threatened by Beijing’s growing clout on the global stage. Given Ethiopia has been a beacon of black Africans’ struggle for freedom and could inspire continental resistance to neo-colonialism, the West might deem that forcing Ethiopia to forsake China is instrumental in containing the influence of its top geopolitical rival in Africa.

The West better realize that the essentially undemocratic and unipolar global world order that had prevailed over the last several decades following the end of the Cold War is ebbing. As a country that has never been colonized and is home to a fiercely patriotic people, Ethiopia will never cave in to the West’s demands. Needless to say this requires on the part of the federal government to develop and implement a robust diplomatic policy aimed at nullifying the threat posed by its historical enemies through a variety of tried and tested mechanisms. Some of the steps it can take in this regard include forging a compromise with its adversaries where possible and failing that to foil their destabilizing policies and measures. Ethiopia has the capacity to find a resolution to the political crisis engulfing it. Any nation or organization which has its interest at heart should stop meddling in its domestic affairs and instead support it in seeking enduring solutions.

The abrupt eruption of fighting between government forces and militants of the Tigray People’s Liberation Front (TPLF) along the border of the Tigray region this Wednesday has left Ethiopians apprehensive and disheartened. The resumption of active hostilities shatters the months-long relative calm that has been prevailing in the northern part of Ethiopia following the federal government’s announcement in March of a truce to allow humanitarian aid to be delivered to Tigray. Predictably the warring sides have blamed each other of provoking the hostilities. The Ethiopian government has accused the TPLF of striking first, saying it had “destroyed the truce”. In a statement it issued on the same day the Government Communications Service said, “Disregarding the numerous peace options presented by the Ethiopian government, the armed wing of the terror group TPLF, pushing with its recent provocations, today committed an attack” around southern Tigray. The TPLF though has said government forces and their allies had launched a “large scale” offensive towards southern Tigray early Wednesday after a months-long lull in fighting, adding its forces were defending their positions in the southern front.

The lead up to the current round of conflict portended the escalation of the now 21-month civil war. War drums were repeatedly being beaten with all the sides in the conflict issuing statements pointing to the outbreak of an impending war. The TPLF said on several occasions that the peaceful path to resolve the situation was not working and that it was considering “other options.” The government of Ethiopia on its part accused the TPLF of engaging in extensive military mobilization in preparation to restart the war and called on the international community to condemn the terrorist-designated organization and dissuade it from its ill-fated move. The government of neighboring Eritrea, whose troops have been operating in Tigray since the war began, also pointed the finger at TPLF for plotting to launch attacks on the country to reclaim lost territory.

Since November 2020, the bloody war has exacted a heavy humanitarian toll and ravaged the nation’s economy. In addition to the tens of thousands killed and injured, millions more were displaced, psychologically traumatized and left needing emergency food assistance. Social and economic infrastructure has been totally or partially damaged, including schools, universities, health institutions, and other facilities in the Tigray, Amhara and Afar regions. The economy has taken and continues to take a battering. Its growth, which stood at around 10 percent annually before the conflict, has contracted by half; scores of industries have been damaged while some investors have suspended or totally quit operations, resulting in a surge in unemployment; the undoubtedly huge sums of foreign exchange the war has eaten up has contributed to its dearth at levels rarely seen before and to driving inflation higher. Although it’s difficult to quantify the true cost of the war, the destruction is sure to have cost Ethiopia billions of dollars.

The renewed conflict comes as efforts underway since June following the establishment of a government-appointed committee tasked with starting peace talks hit a snag. The government’s announcement in late July that it was ready to hold talks with the TPLF “anytime, anywhere” and the TPLF’s expression of its willingness to ending the war through peaceful means raised the prospects of peace. The apparent readiness of the two parties to engage in peace talks was hailed as an important initiative locally and by the international community. However, both sides have laid down preconditions that they say must be met prior to the commencement of talks—the declaration of a formal cessation of hostilities in the case of the Ethiopian government and the resumption of basic services to Tigray by the TPLF. They also disagree on who should lead negotiations, with the government demanding that the African Union oversee the process but the rebels insisting that outgoing Kenyan President Uhuru Kenyatta should chair it. While we are not apportioning blame here it’s disappointing to say the least that war has broken out again due to the inability of political leaders to do whatever is necessary to prevent it.

War is generally regarded as something that cannot guarantee a win-win solution to political conflicts. This said some contend that war is not necessarily the worst option as long as it fulfills certain considerations that lend it moral acceptance. Critics, however, argue that all war is essentially indefensible regardless of how justifiable the cause behind it may be. They also attempts to justify a particular type of war as being just serve to rationalize violence instead of constraining it. Philosophical differences aside, many agree war is a failure of imagination. Ethiopians have had enough of the internecine conflicts that they have endured for centuries. The blame squarely lies with political leaders and elites bereft of the desire to settle differences through constructive dialogues. In any kind of armed conflicts it is innocent civilians who bear the brunt, not their architects. That’s why the Ethiopian government and the TPLF need to immediately stop fighting and thrash out a durable peace accord at the negotiating table. Let’s not go back to square one!

Hopes of a negotiated political settlement to the war that erupted in northern Ethiopia in November 2020 following the attack on the Northern Command of the Ethiopian National Defence Forces based in the Tigray region by the forces of the Tigray People’s Liberation Front (TPLF) have been high ever since the Ethiopian government established in June a committee tasked with holding peace talks. The government’s announcement in late July that it was ready to hold peace talks with the TPLF “anytime, anywhere” and the TPLF’s expression of its willingness to ending the war through peaceful means, albeit the fulfillment of certain preconditions, led many to believe that peace was finally within Ethiopians’ grasp. The apparent readiness of the two parties to engage in peace talks was hailed as an important initiative in bringing a conflict that has exacted a terrible toll on the country and its people to an end.

Efforts to start the peace talks seem to have hit a snag lately though. First, this week the Main Peace Committee—the committee the Ethiopian government established to explore the possibility of talks with the TPLF—declared while announcing it had drawn a “peace proposal” that the resumption of basic services to the war-stricken region was contingent up on the creation of an enabling environment once a formal ceasefire is concluded. Meanwhile, the TPLF immediately dismissed the committee’s statement as “obfuscation”, blaming the Ethiopian government for openly defying “their oft-repeated promise to take measures aimed at creating conducive environment for peaceful negotiations”. It further accused it of “taking provocative actions against [Tigrayan] forces” and warned that “it will be solely responsible for the eruption of a second round of war that will lead to the total destruction of the country”.

The condition laid down by the Main Peace Committee in a statement it issued, namely that the declaration of a formal cessation of hostilities is a prerequisite to resume the provision to Tigray of, among others, electricity and telephone services belies the Ethiopian government’s recent unambiguous assertion that it was committed to hold negotiations without any precondition and as such represents a step backwards. While the committee has legitimate security concerns regarding the safety of federal government employees that need to be deployed to Tigray in order to restart the basic services, it should also be mindful of the fact that the continued disruption of the services only serves to exacerbate the plight of ordinary Tigrayans, not the leadership of the TPLF. It needs to demonstrate in deeds its avowed commitment to alleviate the suffering of citizens in the conflict-affected parts of the Tigray, Afar, and Amhara regional states. On its part the TPLF must stop beating the drums of war in the realization that throwing around belligerent statements is counterproductive to peace-building endeavors and just prolongs the ordeals of the very people it claims to stand for.

A host of hurdles stand in the way of the proposed talks. TPLF forces still occupy parts of the Amhara and Afar regions they invaded. Similarly, the Amhara region has ruled out negotiating over the fate of areas its forces wrested from Tigray soon after the war erupted, arguing they were forcefully incorporated under the Tigray region in 1991. The continued presence of the Eritrean troops in some of the territories they occupied in Tigray poses a challenge that complicates negotiations. Moreover, disagreements over who leads the mediation process—the African Union (AU) as the Ethiopian government insists or Kenyan President Uhuru Kenyatta, the preferred choice of the TPLF—can torpedo the entire process.

Trying to bring about a complete end to the fighting in northern Ethiopia followed by a political settlement which leads to a lasting peace is an arduous task to say the least. Nevertheless, no price is too high to pay for peace. Now is the time for the warring parties to show a genuine determination and commitment to peace. The deep-seated antagonism between the two sides understandably makes it difficult to strike a peace deal. Engaging in dialogue and making the necessary compromise requires more courage than continuing the war. Embarking on a peace process should not be about total victory for one party and a defeat for the other. It is about achieving an outcome in which all the protagonists and more importantly the people of Ethiopia emerge victorious. For the sake of Ethiopia and its people the Ethiopian government and TPLF must recommit themselves to peace.

The rule of law is a mechanism, process, institution, practice, or norm which strives to ensure that no one is above the law, everyone is treated equally under the law and held accountable to the same laws, there are clear and fair processes for enforcing laws and human rights are guaranteed for all. Ethiopia has the sad distinction of being a nation with a checkered track record when it comes to upholding the rule of law. Among the different metrics by which a country’s overall rule of law performance may be measured, Ethiopia has particularly fared badly in assuring order and security as well as respect for fundamental rights. The act of turning back some people travelling from the Amhara region en route to the capital Addis Ababa constitutes a clear example of the latter.

For over three weeks now security forces in the Oromia region have been preventing citizens travelling by cross-country bus from the North and South Wollo zones of the Amhara region to the capital through Oromia from getting to their destination if they do not carry a residence ID of Addis Ababa. Federal government officials claim operatives deployed by the terrorist Tigray People’s Liberation Front (TPLF) were recently arrested while trying to infiltrate Addis Ababa using residence IDs and administrative seals it had looted when it occupied some parts of the Amhara region, adding the measure is part of a security operation aimed at thwarting the evil designs of the terrorist group. True, a government’s primary responsibility is to protect the safety and security of citizens. Nevertheless, care must be taken to ensure that the manner in which any operation to ensure law and order does not trample basic liberties enshrined in the constitution.

One such right is freedom of movement. Article 32 of the constitution stipulates that any Ethiopian or foreign national lawfully in Ethiopia has, within the national territory, the right to liberty of movement and freedom to choose his residence, as well as the freedom to leave the country at any time he wishes to. The Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights, and the African Charter on Human and Peoples’ Rights — the international instruments Ethiopia has ratified and in conformance with which the fundamental rights and freedoms specified in the constitution must be interpreted — also afford protection to this right. Absent a duly declared state of emergency, there can be no justification for the indefensible prevention of Ethiopian citizens from enjoying their freedom of movement on the ground that they pose a potential security threat.

Aside from flouting the rights to liberty of movement, the action of the Oromia security forces has other troubling ramifications. First, it creates a perception of discrimination and ostracization in the individuals victimized by the travel restriction. Moreover, the fact that they are unable to travel to their intended destination entails damaging economic and social consequences for them. This is liable to sow the seeds of resentment and down the line to political conflict. Second, it encroaches on the federal government’s constitutionally granted power to regulate major roads linking two or more regional states. Such intrusion into the federal government’s exclusive preserve sets a bad precedent for other regions. In short it spells danger for the integrity of the constitutional order and the rule of law.

Freedom of movement is a fundamental right all levels of government must respect. Any perceived security threat its exercise may pose should be handled in a manner that does not result in the violation of the right and subjects innocent citizens to inconvenience. There can be no sugarcoating the fact that the act of preventing certain classes of people from travelling to wherever they want is an unequivocal infringement of not only freedom of movement, but also the right to equality. As such it is incumbent on the federal, Oromia and Amhara regional governments need to hold consultations on ensuring that everyone travelling from the Amhara region via Anwar Soussa has been the Managing Director (MD) of Safaricom Ethiopia since July 2021. He was the Managing Director of Vodacom DRC and the Chairperson of Vodacash (M-PESA), a position he has held since 2017 until joining Safaricom Ethioia. During his tenure, Vodacom DRC made major strides in operational performance, crossing the USD half a million in service revenue mark for the first time in 2020. The Reporter’s Samson Berhane sat down with him to understand his new beginnings in Ethiopia.

The Reporter: First, tell us about your journey in the telecom sector.

Anwar: I have been in the telecom sector since 2006. But I started in the technology sector since 1996 in Montreal, Canada. I joined Safaricom Ethiopia, the project, when I was in Vodacom in Congo. I was a CEO there. My experience perfectly suited for this type of operation.

Safaricom has been preparing for more than a year to launch service. Why did it take so long? What were the problems that you have faced while doing so?

I don’t call it a problem. I call it a challenge. Initially, when we come into the market, the idea was to launch using ethio telecom infrastructure. That agreement took longer than expected to finalize. As a result, we choose to build our own towers. We did not want to wait. To build towers, you have to find land, import materials like steel and find cement as well as hire sub-contractors. That means you need more time than the initial plan. That is the real reason why it took longer than expected to launch service. Now, we signed a deal with ethio telecom and things are gonna move faster.

Tell us about the detail of the deal. I heard you are going to pay in both local currency and USD to lease the infrastructure of ethio telecom.

I am going to keep the deal private because that is between us and ethio telecom. But there is a dollar component. The reason is, as well all know, there is a forex shortage in the market and to prepare a site for us, they are required to import materials from abroad. We recognize that. We agreed to make the component in dollar for them to make the site ready for us.

So, the negotiation is now over?

Ethio telecom has been a very good partner. The CEO, Frehiwot, has been gracious in terms of engagement with us. Everything is proceeding well. The delay was due to operational issues. How many juniors were available? How fast we can get steel? How fast we can upgrade the site? All of these are operational issues.

When you launch service in Dire Dawa, you have used your own infrastructure.

That’s correct. When we launch service, initially, we are using our own infrastructure. But as we move forward, we will be sharing infrastructure of ethio telecom and build our own in the meantime.

Is there any change in equity contribution of shareholders in Safaricom Ethiopia? Some say, there is. Is that true?

No, there is change.

As Safaricom is listed in the stock market, a change is expected when something new happens. Have you seen any change recently after you launched service?

I don’t think it is possible for you to attribute any change to a certain element. The reality is the World’s stock market has been very volatile over the past six months. There is a war and a global recession coming in. Certain things happening are way beyond the control of a certain company or what we do here in the ground.

What should Ethiopians expect from Safaricom? Many hope Safaricom will come up with a better quality of service with a lower fare.

The pricing move from ethio telecom last year was very strong. They brought down massively. I am not sure if it will be possible to bring down price from what is in the market now. However, in terms of quality, my expectation is that the quality overall in the market will improve. And the reason I say that is because we are setting up a new network and ethio telecom, or the competition, will not stay still, I expect they will bring the best game in the table. Quality of service, both in technological level and in customers’ service, will be improved massively. How customers’ complaints are going to be taken care of? I think these are areas where you see a major improvement.

The price that you are charging is almost similar with ethio telecom. Do you think you can be competitive in the market, while charging the same price, as people expect a lower fare from you?

The price for voice is one of the most aggressive in Africa. And I don’t think there is a room to drop voice prices. So do I think we can be competitive? Yes, I do. The most important thing we want to flag is that we don’t want a price war with ethio telecom. If we start a price war, that means they will automatically react. There is no way there is going to sit by and see us dominate the market because our price is cheaper. I think that will a detrimental impact on the market, not only on us. I don’t think you see a change in terms of price.

The infrastructure deal took more time than you anticipated. The global market is not helping too. Did you make any change in your financial targets, considering the challenges you have faced since you secured the license to operate in Ethiopia? For instance, do you still think it is possible to achieve breakeven within five years, as outlined in your initial plan?

Yes, I do think so. I think the biggest challenge is the global inflation. The price of fuel is increasing. The same is true for cement and steel. All these things are going to be more expensive. I think this element of the business will be very challenging. Yet the plan is still to breakeven within four or five years. But we have to pay attention to the cost.

You are investing heavily in infrastructure development. And can you tell us how far you have gone thus far?

We will continue to invest with the money that we allotted when we started the business. Some places are easier. Addis is easier than the regions. This is because there are a lot of buildings to put on the antennas. So it is simple to deploy in Addis than other areas.

If it is easy, why did you first launch service in Dire Dawa?

That is a small town. It requires fewer sites. It is easy to optimize. The network rollout was very fast.

How long it would take to launch service in Addis?

Six weeks. We believe there is a massive opportunity in the capital, in every element. I have been working in 12 countries. I never had been in a country where a single company dominates everything. The market will be split.

Is there any place that you want to capitalize on, especially an area where ethio telecom has a little presence?

That is a nature of businesses. You grow until there is no place to grow.

How long it would take for you to be independent from ethio telecom?

I don’t think we want to be independent. The reason I say that is because old days where everyone builds its own infrastructure are gone. You have to share infrastructure. That makes more sense because that does not have any impact on your competitiveness. Why do you build a fiber where there is a fiber? That will be a waste of money.

There has been a social media outcry against your recruitment process. What is your reflection on this?

To be honest, I think it was not only on the recruitment process but also on the language we are using. It was also about distributors and how we are allocating distributors across regions. It was also about the religious mix of what we have in the office and what we have employed everywhere. There were a bunch of requests the activists raised with us. So, we did not respond immediately because we were supposed to understand whether these are true or not and see ourselves if there are problems. To be honest, I don’t think the problems are as acute as people are saying. What they did say is to be careful. For instance, if we go to Oromia, we have to use Afan Oromo. We have to pay attention to laws. We have put signs saying coming soon. It was us not being sensitive. We met guys behind the campaign. They were very moderate. None of them want to hurt Safaricom. They want what we do to be fair. They did not make extraordinary demands. That’s why we are comfortable to engage with them. I understand we have to be sensitive to the history, the culture and the current politics without going too far. It has to merit-based. Everybody coming to the company should be the best of the best. We have received a lot of advises from the government. All of them said “you must choose the best but be careful.”

Do you think it is possible for Safaricom to apply meritocracy in light of the current situation in Ethiopia?

I think there has to be a meritocracy. The qualification of the candidates has to be there. There should be no compromise. However, as we choose candidates, the priority must be given to the people within the region. It is not appropriate to start shifting from one region to another. Not because of other issues but language considerations are critical. People have to speak the language of the area where they are working.

Now let us talk about mobile money. I know you are in the process of launching M-Pesa here. Do you see any progress from regulatory body in introducing a legal framework to govern the sector?

The legal element is going fine. I think it is gonna be available very soon. Our shareholders are engaging with the government. From operational perspective, things are going well. We have put the app in place. We have put configurations in place. Everything is in a good shape. In technically perspective, we will be ready to launch service in the next three months.

The approval process of the bill may take another three months. Do you think that will have an impact on your plan?

No. We got so much to do. We have 25 cities to cover. We have massive network to build.

Do you think you can repeat the success of M-Pesa in Kenya here in Ethiopia?

Absolutely. Kenya is particularly amazing story. Wherever we launched M-Pesa, we were successful and we are leading the market. So we don’t see any way it is not going to be successful in Ethiopia.

Ethio telecom is already advancing in the mobile banking market. Are you expecting fierce competition when you launch M-Pesa?

I do expect very strong competition. They have done a great job in recruiting customers and strengthening the network.

From what I have observed, ethio telecom is taking an advantage of its link with public offices to facilitate payments in the public sector? Have you get any promise from government officials whether you will get the same opportunity when you launch M-Pesa?

We are talking them to now. There is no one said we are not going to get this opportunity. Yes, they had a one year head start. They have done great job in services they have launched. Yet I believe we can catch up.

How is the war in North Ethiopia affecting you?

We have a huge amount of work to do. I think it will slow us down in certain areas but we will continue doing our work in other areas. But everyone is sad to see the resumption of conflicts.

Are things in place to launch service in North Ethiopia, particularly in Tigray, if the war ends?

We will be ready as soon as communications are stored and get the blessings to go back in. We want to reach all over Ethiopia.

My last question is on repatriation. Many international companies usually complain about the difficulty of repatriating profit in Ethiopia. Some say it takes over a decade. How is your plan in that regard?

Repatriation is not a big issue. The issue is finding dollar to buy equipment after the investment window closes. After our money runs out, we need to get forex to buy equipment. Regarding repatriation, we knew the issues when we came. If it takes 10 years, it takes 10 years. We gonna be here longer than that. Of course, we want to repatriate but we are here for long term.

Oromia without fear that they will be turned back before getting to their journey’s end. Given upholding the fundamental rights laid out in the constitution is vital to assuring the very survival of Ethiopia as a cohesive polity, overstepping the constitution in the name of containing elements bent on wreaking havoc cannot and should not be tolerated. That is why it’s imperative to put an immediate stop to the blatantly unconstitutional violation of freedom of movement and see to it that it’s not repeated ever again. Goitom Tsegaye is deputy chairperson of Arena Tigray, an opposition party popular in Tigray. He has been voicing his concern over the war in Tigray since it broke out almost one and half years ago. The second time the conflict started, Goitom found it heartbreaking. He thinks that in carrying out the eagerly anticipated negotiations between the two warring groups, the African Union did not fully fulfill its obligations to the organization. The Reporter’s Selamawit Mengesha sat down with the opposition leader to get more of his perspective on the recent resumption of hostilities.

The Reporter: Let’s start with the war that erupted anew this week. Before the battle resurfaced, there were talks of a peace agreement. Is there still hope for negotiations?

Goitom: It is heartbreaking that the dispute has resurfaced this week. Since it began, there is a potential that it will continue, although much will be lost if it does.

War’s casualties are well known, and hopefully we have a government that cares enough about its people to put an end to it. They should have learned from their previous mistakes and avoided them, in my opinion.

Both parties demanded that mediators be appointed. What was the reason the two parties couldn’t agree on who should undertake the mediation?

Essentially, I believe there is one thing we should all remember: everyone must be fair and impartial while looking at things.

In a war, not everyone carries a weapon, but what we’re seeing in Tigray is people lacking necessities such as banks, water, transportation, telephones, and electricity.

We were taught to believe that these services were destroyed during the war and that the government was unable to repair them, but it is now clear that this was not the case all along.

According to the Tigray regional government’s discussions with the EU, the federal government is leveraging these necessities when it could simply provide them to the people; it’s using them as a weapon of sorts.

War has laws, but the warring side is separate from the people. The people of Tigray are also Ethiopian citizens; hence the administration is harming its own people. Personally, I believe it is not the best way to proceed.

I believe that the federal government should have learned from its failures from the beginning. I don’t think initiating a full-fledged war with the TPLF was the best course of action. Instead of attacking, it should have been defending.

It was not a prudent move, especially with other powers involved. What I mean is that the items the Tigray regional government is requesting from the federal government are essentials for the people.

Both parties bear responsibilities for doing the right thing by the people. I’m not sure why it’s framed as a difficult choice. It is for the people of Ethiopia; hence the government should have established a consensus for its people by now.

To return to the subject of the negotiations, the government already pledged to begin them without any preconditions. However, the offer was to negotiate solely with the TPLF, without including Amhara, Afar, or even Eritrea. Do you think these groups should have been taken into account during the negotiations?

I believe the government’s strategy was flawed from the start. We’ve observed unlawful acts such as Tigray transferring land to Amhara with the assistance of other forces, so what has the Amhara area lost from Tigray?

We’ve heard on several times, particularly in the case of Welkait, that the region is attempting to reclaim their land. Is it even their land is the question?

The structure of the regions, in my opinion, is fairly apparent.

I say this because there was a region called Show that later became part of the Amhara and Oromo region, a place called Bege Medhir became part of the Tigray and Amhara region, and if Welo became part of Afar, Tigray, and Amhara, then there is really nothing new that happened between Tigray and Amhara, unless there is a belief that if I am living here, there is no one else there, which in that case makes comprehension difficult.

Ethiopia and its land are inextricably linked, so stating the land was mine and I want it back makes no sense to me. Questioning the demarcation system is understandable, just as arguing “using language as a way of defining regions is wrong,” but claiming land in the same country is not.

Ethiopia’s land is reserved for Ethiopians. Sitting and talking with Tigray and the federal government makes sense because the government is clearly offending Tigrayans and requires mediation.

Because Eritrea was involved in the attack, having Eritrea participate in the talks makes more sense than having the Amhara region participate in the talks.

Understanding this, I believe, is critical.

As a representative of Tigray, Eritrea and the federal government should have discussed Bademe and other issues. However, in actuality, the federal administration has not been representing the people and territory of Tigray.

Negotiations have been attempted by international groups. We’ve seen people like Obasanjo come to the country and make attempts, and many people were optimistic that the talks would take place. Do you believe the conflict resurfaced because those bodies failed to carry out their duty properly? Or do you believe they carried out their responsibilities correctly?

I believe we should have taken the initiative.

Both the federal government and the Tigray regional government should have demonstrated interest in the negotiations from the start; only then could other groups assist in getting the talks started.

According to my knowledge, they did not fulfill their obligations, particularly the African Union. Aside from creating articles and laws, I do not feel the AU has a consistent and capable ability due to one of their articles; Article 2H, titled humanitarian integration.

Although the article has been ratified, the Union lacks the resources to put it into action. According to that provision, the Union has the right but not the resources to intervene in cases of humanitarian rights breaches.

For example, the AU did nothing to address the Tigray situation; there were words but no action. For these reasons, I didn’t have high hopes for the AU. It still has a long way to go, in my opinion.

Other international organizations with influence and power have their own military intervention regulations as well. The west has previously attempted to exert pressure on the administration, but international organizations such as the EU and countries such as the US are preoccupied with other matters such as the Ukraine-Russia war.

They have the ability, but their focus has been diverted away from Africa. They, too, lack consistency, as evidenced by their actions in Ukraine. As a result, I don’t believe they’ve done their part

They have the power and capability, and yet here we are.

Who do you believe is to blame for the re-ignition of the war? Could the difference in negotiation beliefs be the cause, or do you believe the absence of the Welkait and Humera concerns is a contributing factor?

As I stated at the outset, if we refer to the Oromia area, we need to know which cities and counties comprise that region. That is, the problems of Tigray and Welkait should not be a problem. I cannot argue that the requirement should not be met because the federal government granted the land without Tigray’s approval and is now requesting that Tigray accept it.

People who lived there before are now refugees. People are unable to use their own funds because banks are closed. All of these difficulties should be considered as prerequisites.

It’s not difficult to grasp, even for the federal government. People are hungry, so shouldn’t that be addressed first as a prerequisite before any negotiations begin?

I cannot accept the idea that there are no prerequisites. Negotiations would be conducted with a boot on the people of Tigray if those demands were not met.

I don’t have any information on who restarted the war. To be certain, I would have to live there. I am like everyone else, listening to all sides’ arguments.

What will the people of Tigray face if the fighting continues? You’re already aware of the issue. What do you think about the present humanitarian crisis?

I don’t believe that anything positive can come from conflict.

War will take innocent lives, destroy property, and deplete the economy, and what could be worse than that? Tigrayans are at a significant disadvantage.

They are under attack from their own government, former foes such as Eretria, and adjacent territories such as the Amhara region. It’s painful to see how something that should have been resolved amicably has turned into an injustice against the people of Tigray, which is also an injustice against the rest of the country.

Hopefully, people will realize this soon. I’m sure there will come a day when our empathy will be tested. Ethiopia will pay a high price as a result of the conflict. In the war, there are no winners, but all are losers.

Do you believe the constitution can deescalate and resolve the conflict? What are your thoughts on the matter? Is it possible to resolve the disagreement based on the current constitution and the new statute established by the federation under which regions could decide directly to be regions?

There aren’t enough people organized to hold a referendum. Furthermore, Tigray has no representatives in the House of Federations. How will Tigray make its case? Who will be Tigray’s representative?

At this stage, it would be child’s play; the most serious offenses have already been committed. Atrocities in violation of the constitution have occurred. International agencies have branded it ethnic cleansing, and some have even called it genocide.

So this is pretty strange. On paper, the constitution is just and fair, but its implementers are not.

Is it truly conceivable to exclude Eritrea from the war in the future if Eritrea’s government refuses to withdraw its troops? Will their departure solve the problem in any way?

I believe we must consider how they got to be involved in the war.

Did the federal government request that its troops participate? Was the Parliament able to represent them? I mean, there are multiple options, right? Who delegated authority?

These points must be addressed first.

It would be pointless to question something that has no legal foundation. Was a formal agreement reached between the Ethiopian government and President Esaias? If so, what were the terms, and where are the documents?

Is it even conceivable for an Ethiopian Prime Minister to pull out such a deal out of the blue? He cannot. To begin with, it must go past Parliament.

As a result, the question of whether Eritrea should withdraw has become extremely convoluted, with numerous loose ends.

We have observed that since the beginnings of the war, a large number of Tigray-born residents living in various cities throughout the country have faced discrimination and harassment everywhere they go. They couldn’t return to Tigray due to the war, and during this time, everybody from Tigray or of Tigrayan ethnicity was in a plight. That had been subsiding to a degree in recent months, but now that tensions have resurfaced, what does this mean for Tigrayans living around the country?

This is a clear problem. Kibrom authored a book and was detained because of his ethnicity; he traveled to Afar and got into a lot of problems; I’m using him as an example, but there are many others like him.

What is the UN peacekeeping mission doing now? To be honest, I don’t think it was even this horrible during Derg’s reign.

Innocent people are openly mistreated based on their race, with some even losing their lives as a result. Tigray is not being represented by the government, and this must change. It must reflect on its previous activities.

We are on the verge of a major crisis, which must be examined thoroughly.

It is unacceptable to feel unsafe and to face severe discrimination in your own country because of your heritage. There was a glimmer of hope. As you stated, the current circumstance may pass as it always does, but it may leave wounds and scars that will not go as readily.

Do you believe Ethiopia will be restored to its former glory in the future? What is the hope in a situation when many already believe Tigray is no longer a part of Ethiopia or that it would have a referendum? Do you believe Ethiopia is one of them?

It depends on the next steps we take.

As far as I am aware, Tigray is still a part of Ethiopia. Even Eritrea would have been a part of Ethiopia if not for the Adwa war and its consequences.

Right now, looking at the government’s actions against the people of Tigray, such as refusing to reopen banks, the internet, and transportation, it appears that there is a power that does not want Tigray to be a part of Ethiopia, which is incorrect. The China Foundation for Poverty Alleviation (CFPA) is a non-governmental, non-profit organization that was established in 1989 as one of China’s largest charity organizations dedicated to poverty alleviation.

The foundation, among other things, provides healthcare and nutritious food to vulnerable populations, with a focus on mothers and children; supports education programs; provides scholarships; builds infrastructure; and distributes stationery to help communities thrive.

The Ethiopian Civil Society Organizations Authority registered the Foundation in 2019, and it has been actively working since 2015 by collaborating with local and international non-governmental organizations on various projects such as school feeding, clean water, women’s economic empowerment, and refugee support. Sisay Sahlu of The Reporter spoke with Emma XiaocenXuang, the country director of the foundation’s Ethiopian office, about some of the project activities in Ethiopia.

The Reporter: It is unusual to see the Chinese government involved in such areas, particularly in poverty alleviation. What are the goals of establishing this foundation?

Emma XiaocenXuang: This is the basis of a total charity organization founded in 1989.

The Chinese government’s fund for social enterprises provides 99 percent of its funding. In China, the foundation works in the fields of health, education, rural development, and livelihood. We are now investing in similar international engagement areas.

In Ethiopia, our official implementation agreement began in 2015 in collaboration with Ethiopia’s First Lady, Roman Tesfaye, specifically to begin school feeding in Addis, in over 43 schools.

We were collaborating with a local organization called E-network at the time, but they changed the name to Hailmariam and Roman Foundation. We were officially registered as a civil society organization in Ethiopia in 2019 after working with this foundation for about four years.

We started the registration process in 2017, but the government changed, so we put it on hold. We restarted in July of 2019.

What is the foundation’s international experience?

In 2005, we began working as an emergency aid provider, and in 2015, we officially began in Myanmar and Nepal as our first steps in Asian countries, with Ethiopia becoming our first African destination.

We began our project in Ethiopia and Sudan in 2015. However, we chose Ethiopia as the location of our regional office.

The Chinese government has extensive experience in poverty alleviation. What is the secret to their success? Are there any suggestions?

One component of the foundation is poverty alleviation. The People’s Republic of China has a very strong system, and China is very good at mobilizing all of the parties involved, such as companies, non-governmental organizations, the public, the government, schools, and research institutions, to engage in poverty alleviation.

All of those parties are working within this system, and there are numerous methods and areas for collaboration in the education and nutrition sectors. We incorporated the school feeding system into children’s basic rights and the education system, not just the Zero Hunger plan.

We also give quotas to poor areas, particularly at China’s two best universities, Tsinghua and Peking. According to policy, we provide a quota for the poor. This is because if you want to end poverty, you have to invest in education.

Similarly, we must construct a very strong housing system to ensure that all citizens receive the full package so that they won’t have to stress over things like, “Oh, I’m sick right now, so I’m going to the hospital and spending a lot of money, since the government is covering most of the cost.”

Both the government and non-governmental organizations offer benefits like insurance.

For instance, I was born in China. Both the government and my company provided insurance for me. However, I believe that identifying the poor is the most difficult task because doing so is the first step in providing aid to the underprivileged.

In this regard, the Chinese government created a system that can store all of a person’s information on a card that serves as an ID card. You can discover a person’s complete information using this card.

A person also has a complex set of criteria and evaluation standards.

If you have an income of up to 2300 Chinese RMB, that means you are getting out of poverty, and the next step is to observe and follow-up for a few years until you make steady progress out of poverty.

If they are in an accident or become ill, they will be forced to return to poverty and their names will be added to the poverty list again. So this is a national system implemented with strong leadership and complex evaluation criteria to identify, follow-up, and evaluate the entire system.

How can we balance the demands of the expanding population with the available resources? Is there any advice, particularly with regard to the food system?

You know, it could be the geographical location, but if you look at China, we have a very large land area. Even the climate in the north and south is vastly different. People in the south, for example, prefer rice as their main food, whereas people in the north prefer wheat. The majority of Ethiopians consume Enjara.

I believe it is about food diversity and nature’s gift. I couldn’t find any seafood in Ethiopia. Everything is imported. So, in comparison to geography and location, it is the gift of nature that I want to emphasize.

The second point to mention is that China has made substantial investments in its agricultural sector. We simply devised a number of methods for producing more food while working with limited resources.

For example, there is a well-known Chinese man who developed a type of improved seed by changing the genetics and received an international award. In the same situation, this new seed can produce more than ten times the yield of the original local seed.

Thus, we put more time, effort, technology, and other resources into our endeavors. The northwest region of China is characterized by extremely dry land devoid of any water. In order to effectively use rainwater for farm work during the dry season, we constructed a water sailor.

The other thing we do is drip irrigation, and we make good use of all the available resources. There are just too many aspects to it for me to list them all now.

When the land is distributed in pieces, the government in some places tries to use the entire land and bring all of the necessary equipment to do the farming all at once, saving money, time, and human resources while producing more products.

What can Ethiopia learn from Chinese agricultural practices in order to make better use of its resources?

The most important industry is agriculture. Ethiopia is also dependent on it.

I noticed teff is a main product, and it appears that farmers are having difficulty making a living from it. I recently traveled to the Amhara region, Somalia, Oromia, and other parts of the country. I noticed how friendly and hardworking the people are.

Their farming equipment, however, only uses cows; such farming was abandoned in China more than 30 years ago.

When I see this practice, I think to myself, “Is it possible for Ethiopia to develop without using adequate technological instruments?” And I believe it is preferable to bring more technology and do it more efficiently.

I want to be modest. I sometimes admire how they learn this from their ancestors and local wisdom, even knowing the direction of the wind and when it might rain.

However, because I am not an expert in the field, it is difficult for me to speak out without conducting an assessment and a survey. In China, there are numerous agricultural universities with a large number of professors and college students working in the sector.

They are professionals who are learning from both abroad and at home, and they provide an excellent representation of Chinese planting culture. Farmers are constantly being introduced to new cultures, technologies, and skills. We also organize farmers into groups to teach them how to plant properly in order to produce more products.

Another experience is that you are aware that individual farmers are extremely vulnerable and lack the clout and knowledge to bargain with the market and the upper chain. They only sell the original fruit for a very low price. They put in a lot of effort and got very little in return.

There is something in China known as a “cooperative” or “organization.”

It is a unified organization made up of all farmers, and the farmers choose just one or two people to lead their organization and send representatives to determine the prices of all products.

They bargain to determine the market price, and if they work together and make a profit, they split it.

The majority of Chinese practical and recognized engagement in Africa mostly takes the form of investments, loans, and credit provision. Humanitarian commitment to Africa is little known, particularly in comparison to the Western world. What prompted the Chinese government to get involved in such foundations and poverty-relief efforts?

The first point I’d like to make is that the China Foundation is a non-governmental, non-profit organization, and we take great care when discussing political issues. We are always neutral and on the side of the vulnerable.

My personal observation is that, initially, international aid is provided all over the world, particularly after World War II. So there is a tradition, and 40 years ago, China suffered greatly and received significant assistance from Western and other developed nations.

They invested heavily and brought some goods to China. You know, for example, for people like me, I have received an English education from the UNDP.

China was the first recipient of aid, and now that the country has matured and can no longer ignore these countries, it is time for China to accept responsibility.

So, doing business is one thing, and taking on social responsibility is quite another. There is no conflict, and we must proceed.

You earn money and support your people there, but you must invest locally to support the local community, which is natural. Here, we share common sense and concepts with both the government and the general public.

But, you know, because we only recently developed our economy to support the Chinese public, the concept of social responsibility is something that comes from a good heart. China has done a lot to eradicate extreme poverty, but poverty still exists, and people are becoming wealthy in a very short period of time. We sometimes solve the poverty problem, but we still need to work on the nutrition problem.

We can’t solve it quickly because it’s a long-term process.

However, the Chinese government is always concerned with the need to do something for the locals, and they encourage businesses to assist the locals and take more responsibility. It also encourages companies to invest abroad while also taking on social responsibility.

The funds for this foundation did not come from the government; rather, they came from the South-South cooperation initiative.

How much money have you put into Ethiopia?

We used USD two million this year, but depending on the project, the fund may grow if the situation allows us to move forward.

What have you done in Ethiopia thus far?

We want to do a lot of things, but some of our plans have to be put on hold, not only because of the COVID-19 outbreak, but also because of the conflict in Ethiopia.

We are now investing in education, especially in school feeding, panda bag, wash, and solar light projects. But school feeding is the first thing we’ve focused on because we believe the children deserve it and that it’s a basic human right.

In addition, we intend to construct the school kitchen and provide cooking supplies for the students.

We have received funding for it, but we have yet to make a decision.

The city of Addis Ababa has adopted the full standard of cooking that we developed based on Chinese experience combined with the first lady’s local experience. Initially, it was 40 birr for two meals (breakfast and lunch) per child.

We recently visited the Oromia region and plan to visit the Amhara region; we simply want to share our limited resources’ experience, models, and any other relevant information.

Our main goal is to create a model and share it with the government and other non-governmental organizations (NGOs) that want to get involved and contribute to the local community.

Do you believe this school meal can be sustained?

Of course, we will conduct an evaluation, and once we see how the school feeding program is working, we will not suspend it for at least three years. We need to ensure that once the program is running smoothly, we can extend it for more than three years.

But our aim and goal is to keep this school feeding program running from kindergarten to grade eight, and that is how we will proceed.

However, if the government says, “We have money and we don’t need you anymore,” we suspend it and shift our focus to other sectors.

Addis Ababa has started the program, but if you look at mothers’ cooking, you will notice that they only use three stones in the pot to cook the sauce, which consumes a lot of energy and is bad for their health.

They must get up early and are paid very little. As a result, we are attempting to provide more integrated and comprehensive support, such as building and maintaining the kitchen as well as providing cooking materials.

We commissioned some Chinese construction firms to create the design, which we have already implemented in one school.

It is a pilot project, and if it is useful and effective, we will undoubtedly expand it. However, the first step is to obtain electricity in order to provide modern cooking materials, which can also save energy.

How are schools chosen for this project?

We communicate and collaborate with the government, and they know which areas and schools require the most attention. We will go there on the ground and compare one school to another based on their recommendations.

Are you planning anything else?

Yes, there is a Panda Bag project that aims to provide kids with school bags that contain more than 100 school supply items, such as lunch boxes, water bottles, hygiene items such as soap and toothpaste, and all the necessary materials for the students.

Every year, we conduct an assessment by asking children, teachers, parents, and members of the local community what kinds of items they most need and which items they do not want.

We need to make more adjustments if any item is more needed. We make every effort to avoid any political or religious content in this gift. The donation was made in collaboration with the Ministry of Education.

We will send the entire quota to the Afar and Amhara regions this year because they are affected by the conflict.

What exactly is the challenge?

Of course, there are numerous challenges. Each project has its own set of implementation challenges. We have to buy the panda bags from local factories when we need to provide them to the children. We talked, argued, and bargained about the price and shipment from China with them during this process, because we couldn’t find the item in the local market.

Actually, we made it easier for you to invest in it in the local market, but you couldn’t find the right quality.

And something that worries me is that when we try to collect some items from the local market, I notice that they are coming from India or Turkey, and I believe that if we need to invest in the local market, we should get the materials from here, because buying imported materials is very expensive.

Of course, not this year. We paid nearly one million birr per year for the damage in the previous three years because we did not receive the tax-free letter. However, we received this letter this year. This entry was published on August 1, 2010. Yohannes Benti (PhD) began his career as a chemistry teacher for a high school in West Oromia in 1992, the same year he got his degree in chemistry from Addis Ababa University. He has been the president of the Ethiopian Teachers Association since 2009, having been elected three times. He is the lobbying group’s longest-serving leader, having ruled over it for more than a fifth of its existence.

He immediately became an active member of the Association. Before getting his master’s degree in Educational Planning and Management from Addis Ababa University in 2005, he earned a second bachelor’s degree in law from a private university. While running the Association, he got a certificate in Advocacy and Citizen Management from the Coady International Institute in Canada and a PhD in Educational Policy and Leadership from Addis Ababa University in 2019.

The Association has 700,000 members at all levels. For the past six months, university instructors have been protesting about inadequate remuneration and other difficulties, but the government appears to have mainly ignored them. They have even vowed to strike in the coming month if the administration does not present a satisfactory solution.

Yohannes is the president of the association that represents each university’s associations, as well as a member of the Board of Education International, a 32-million international union organization. The Reporter’s Samuel Bogale sat down with him to discuss the concerns of lecturers and the education sector.

The Reporter: What compelled university academics to issue an ultimatum as they request the government to make an adjustment on salary and work grade? Can you tell us what they asked, and why they didn’t get a response?

Yohannes Benti (PhD): The query from university lecturers is on Job Evaluation Grading (JEG) and its implementation, which the government decided to impose for all civil servants in 2019.

There were approximately 65 salary scales among civil servants when the government agreed to reduce these scales in 2010, but it was later reduced to 22 scales in 2019 and applied immediately.

Since 2016, the Association has represented both general education and university teachers in the study to implement the JED on civil servants.

We detected a problem with the scales and wages of general education instructors when it was brought to us for comments in 2019, soon before implementation. We later requested an adjustment to increase their grades from the Ministry of Education, which then met with the Civil Service Commission.

During the process, the requirement for university instructors was disregarded.

What substantial modifications were made to the pay scales for general education teachers but not for university lecturers?

The highest work grade for teachers, regardless of experience, was only six. When the JEG was established, we asked the government to help them improve their grades, and they eventually made it to grade nine.

These are the salary adjustments that university lecturers did not have the opportunity to make. High school teachers with a bachelor’s degree currently earn more than 12,500 birr per month, or 1,400 birr more than university lecturers.

The higher the grade point average, the better the salary.

What has been the reaction of university instructors since then?

They have been complaining during our series of meetings since its deployment in 2019, and have even requested back pay.

Last year, the associations at each university formally developed a list of approximately 14 questions. Our association was then part of a committee that made the requests to the then-Ministry of Science and Higher Education, which was later dissolved before responding to our queries.

The petitions have since been passed on to the Ministry of Education, which is now the regulator of Ethiopia’s universities.

They had complained not just about the JEG and salary scales, but also about overtime pay, consultancy fees, housing allowances, and tax-related difficulties.

Housing has long been a demand of the teachers, and the government has always claimed that it is taking action. So far, how has it been?

Since the implementation of a directive in 2016, teachers have been given preference for housing at their places of employment, either by building on a plot of land or by purchasing condominium homes in cities like Addis Ababa.

University academics are excluded from this due to claims that they were receiving housing benefits, and their universities may be in a better financial position to have their own buildings and house the teachers. However, some city administrations, such as Addis Ababa, have already started offering housing subsidies to their general education instructors.

For teachers, a home is not just a place to live but also a place to work. Regions like Oromia have long been doing outstanding work in providing teachers with houses by giving them land to build on. In Addis Ababa, some 5,000 instructors were also given condominiums.

For the obvious reason that many other people of the community also urgently require homes, the housing question does not receive a prompt response. However, up until the end of the previous year, roughly 110,000 teachers received land on which to construct homes, along with a few condominiums.

The government was recently warned by university teachers to respond to their inquiries or face a strike by the end of September. What is the position of your association on that?

Discussions can help solve issues. Such actions have a significant negative influence, thus we don’t advise them. We should keep asking and be open to the strong arguments we hear while at work.

The administration views raising the scale and compensation as a difficult task, given the current economic climate. The Association also understands the situation.

The homogeneity of pay across various universities is one of several other issues that are currently being addressed. Our Association is attempting to mediate disputes between the government and educators. Both the things that the nation can change and the things that should be put on hold should be done.

Threatening with prerequisites is useless. We condemn that.

The government has been supportive of general education teachers at primary, secondary, and vocational schools, including acts such as granting land for them to build their homes.

We will continue to request the same perks for university instructors.

The government recently announced that universities will have autonomy, beginning with Addis Ababa University this academic year and expanding to ten universities in two years. What are your thoughts on this development?

The proclamation for university’s autonomy has been in existence for a long time. It is unclear how it would be used at all universities at this point, but they are starting with Addis Ababa University and expanding to other campuses. That is something that universities would like as well.

Several teachers work at schools, primarily private ones, despite not having completed the teachers’ training program, also known as the Post Graduate Diploma in Teaching (PGDT). Who are the association’s members and who are the teachers?

Any educator working at any institution is eligible to join. A teacher is someone who possesses the necessary credentials, such as the necessary training, education, and capacity. The worldwide standard is also being followed in our nation.

Not everyone who attended school for a certain field of study is qualified to teach. Additionally, it is essential to possess the required pedagogical skills. Teaching abilities and expertise should be present.

You can’t teach English because you studied it. This isn’t just a problem in private schools.

Do government schools hire teachers who have not received PGDT training?

Sure. When schools experience a teacher shortage, one option is to train applied science graduates in PGDT and hire them in schools.

Initially, the goal was for these graduates to be trained and deployed, but due to an acute shortage of instructors, they were authorized to begin teaching immediately.

This is an issue in both private and public schools. After much deliberation, the government decided to require instructors in both private and public schools to complete the PGDT program.

The requirement that teachers need to fulfill after completing PGDT training has actually been a part of government legislation for quite some time. This training is offered by a small number of universities to all teachers, domestic and foreign. Private schools will be required to pay for their own staff training.

Teachers in universities and in general education are unemployed in northern Ethiopia’s conflict zones. How is your organization supporting these educators?

University professors from the universities in the Tigray Regional State would be able to register online and request reassignment, according to a statement from the Ministry of Education.

Even while we know that some lecturers accepted the risk and continued to work, there may still be individuals in the area who are unable or reluctant to do so.

We have a list of the teachers who were displaced in relation to general education teachers. We are giving a small sum to a few of them as a sign of solidarity.

Our request for assistance in reassigning 43 instructors was made to the Ministry of Education and even the Ministry of Finance, but we heard back that neither the Ministry of Education nor the Ministry of Finance oversee any elementary or high schools.

We will continue to support them while putting pressure on the government to transfer them to any school and location around the nation.

How is the Association, a significant player in the education industry, reacting to the most recent changes and new rules?

The education reform research, which began in 2016, was the catalyst for reform. The public then debated it in 2019 prior to its implementation. University education was expanded to four years, and a national high school graduation exam was administered in grade twelve. In Ethiopia’s justice sector, Tamiru Wondmagegnehu is a colossal figure. He has been working for fifty years and has witnessed four regimes in addition to becoming a walking library. He has a master’s degree in legal studies and international law.

He started out as a judge under the imperial regime and eventually worked his way up to become the vice president of the Supreme Court, Special Court, and High Court under the socialist Derg regime. However, he was detained along with three other Supreme Court justices when the EPRDF seized power.

Following his release from prison, he founded the Tameru Wondm Agegnehu Law Office, which rose to prominence in the nation. Ashenafi Endale Of The Reporter sat with Tamiru to talk about Ethiopia’s legal system.

The Reporter: What similarities and differences can you find between the legal system, the institutional makeup of the judiciary, and its operations under the imperial rule, the socialist Derg, the EPRDF, and the current administration?

Tamiru Wondmagegnehu: The Ethiopian legal system can be divided into four periods: before 1900, between 1900 and 1941, between 1941 and 1974, and since 1974.

Since Derg, we have been ruled by autocrats akin to the French Revolution. Under these regimes, the courts have been altering their characteristics and duties.

Ethiopia’s triumph at Adwa falls under the first category because it is known around the world and has received attention. Four diplomatic consulates started operating right away in Ethiopia. Ethiopia became the only nation of color to be acknowledged under international law.

Following the 1648 Westphalia treaty, Europe came to the conclusion that there was no other nation state than Europe and decided to establish a European nation state. Therefore, only European nation-states were subject to international law before 1900.

According to international law, Muslims and Blacks in particular were not eligible. That is why Europe began its colonization of the western hemisphere, including its policy of rushing to conquer Africa.

No international law imposed sanctions on Europe. They consequently run ferociously to satisfy their need for resources and markets. Ethiopia was the only African nation at the time to have created its own state boundary.

In circulars he sent to England, Germany, France, and Italy, Emperor Menelik described and mapped Ethiopia’s active boundaries. Ethiopia did not draw its border with other African governments, but rather with European invaders. At the period, as to this day, Ethiopia was surrounded by European colonial governments.

What modifications were made to the foundational rules of justice by the regimes?

Fetha Negest, a 500-year-old written code of justice in Ethiopia, was created under Zerayacob’s rule. However, the zufan chilot (the king’s court) was the only institution at the top until 1900. All the officials of the kings judge matters according to their ranks.

Foreigners began to enter Ethiopia after 1900, and Fetha Negest was no longer useful for adjusting to modern rules. The first cabinet was founded in 1900 by emperor Menelik.

The emperor was under pressure from the foreigners, particularly the French ambassador, to create a consular court. Foreign judges were therefore permitted to sit as judges alongside Ethiopian justices after 1900. The consulate court operated from 1900 until 1941.

Emperor Haileselasie I disliked the consulate court system when he returned from exile in 1941. Thus, in 1941, he issued the Negarit Gazette’s founding proclamation for the first time. The second Negarit, which announced the development of a modern legal system in Ethiopia, was released that same year.

Haileselasie gave the order for English professionals to set up police and court institutions in Ethiopia, which were established at the supreme, upper, Awraja, and woreda levels.

The head of the Supreme Court was a foreigner. Experts received their education elsewhere. However, all of the judges on the supreme and higher courts were foreigners. This persisted up until 1965, when Niguse Fithawok, the first Ethiopian, assumed the presidency of the Supreme Court.

The final judge during the emperor’s reign was Hailessilase. After the emperor was deposed, there was a void. Thus, in 1987, the cassation bench was formally constituted.

I served as one of the justices on the cassation bench during the Derg administration.

Derg didn’t interfere with the system of civil courts. However, the government formed the military court system in addition to the already-existing civil court system. It never presented its cases before a civilian court; instead, it either executes its victims immediately or takes them to a military court.

Judges were therefore shielded from political interference.

The judges were fully removed when the EPRDF came to power. It stocked the legal system with cadres and individuals who could advance EPRDF interests. This persisted up until the 2018 inauguration of the present administration. There are several things that the present administration is working to fix.

What aspect of Ethiopia’s legal system is most lacking?

The practice of law is not based on reason but rather on experience. Justice must be acrobatic, just like life. Every judge gains knowledge from the rulings of earlier judges. Of course, some claim that this only applies to “common law” and not “civil law.”

Ethiopia adopts a system of “eclectic law.” This indicates that the principles were taken from several legal systems. Ethiopia’s legal system, however, is a little unclear.

On the one hand, we have the civil law cassation bench. However, a cassation bench’s ruling becomes law, and all courts below the bench must follow the sentence. The model is now comparable to common law.

The Ethiopian justice system has been disrupted by this difference in legal systems. Continuity refers to the use of prior judgments as standards for upcoming cases. Continuity is crucial.

Continuity provides predictability and confidence, two important advantages. Your win-loss ratio must be accurately known before you file a lawsuit. All of the stepping stone articles are already familiar to you. The courts would be unable to accomplish their jobs if every case required an interpretation of the law. A predictable life cannot be ensured by a judicial system like this.

In both the United States and Europe, attorneys provide clients with percentages indicating their odds of winning and losing. Ethiopia is the only nation without consistently applied laws. The main flaw in Ethiopia’s justice system is this.

The court systems and Ethiopian Bar Association must cooperate on this.

The Ethiopian justice system’s organizational structure is the second significant shortcoming. Ethiopia’s legal system was totally centralized, like one sun, one sky above everyone, prior to the EPRDF.

Ethiopia was divided by the EPRDF into nine different states, and that number is currently rising. There was discussion about how to reorganize the legal system after the EPRDF came to power and Kifle Wodajo was selected the leader of a group of specialists.

Some contend that, like prior governments, the justice system must be centralized. But the head of the Indian Supreme Court, Bagwati, present to offer advice, contended that Ethiopia cannot afford a decentralized court system. Others, however, believe that since the EPRDF formed a federal government, it must be decentralized.

Finally, the regional states and nine distinct court systems with nine supreme courts were approved by Parliament.

Ethiopia became the second nation after the US to implement a decentralized judicial system.

Under the US Supreme Court, there are 52 supreme courts. Because of this, America is the nation with the most lawyers. It is a new jurisdiction every time you enter a US state, thus the lawyers have to learn numerous laws in one nation.

The American federal structure is imitated by many countries, including Germany, but not its legal system. A decentralized court system was rejected by Nigeria, India, and many other federal governments because it was too expensive.

A decentralized court system appears advantageous at first glance. However, it is also expensive in terms of resources, both human and governmental. All we can do is hope and pray that Ethiopian leaders will be able to change this and unify the legal system.

How can the two main bottlenecks be eliminated at this time?

The constitution ties everything together. Ethiopia’s judicial system, however, can be centralized despite the fact that the structure is a federal one. India and Nigeria are two prime examples.

Currently, if a lawyer in Ethiopia wants to practice in many regional states, he must obtain a license from each of the regional states. However, if Ethiopia’s justice system is centralized, all of the regional states use the same article. A single license allows a lawyer to practice law across the entire nation.

In comparison to a federation, Ethiopia’s legal system is more like a confederation of states. Such a system is unique to the US, and only they can afford it.

Ethiopia is a small nation when compared to the size of America. Therefore, a decentralized justice system is not needed. It is incredibly difficult to reform and modernize Ethiopia’s judicial system. There may still be ineffective judicial systems in remote areas of the nation even after creating a centralized one.

How can the present border disputes with neighboring nations be resolved given that Ethiopia’s boundary was shaped by colonial powers?

England, France, and Italy all had boundary accords with Emperor Menelik. However, agreement does not imply demarcation. Ethiopia naturally agreed with England but not with Sudan. The current issue with Sudan stems from this.

The Prime Minister of Sudan, Alnimeri, and Haileselasie got along well. Just before the emperor was ousted in 1972, they were about to start demarcating the border. I hope Sudan and Ethiopia will start the delineation process right away.

Emperor Yohannes pleaded with England in the 1870s for assistance in keeping Masawa under control. Even though Yohannes assisted them in rescuing English troops in Sudan who were being surrounded by Mahdists, England refused. Meles Zenawi voluntarily gave over Assab a century later.

This is a huge contradiction.

But the situation with Sudan is becoming increasingly complicated.

As long as the 1972 agreement is in force, it can be resolved. The issue is that the borderlands’ value has increased recently. Ethiopia’s biggest issue is the absence of a succession plan whenever a new regime takes power.

Haileselassie came to an accord and was about to draw the line with Sudan. Sadly, Derg surpassed Hailesselasie. Derg, however, started over after stumbling everything the emperor had begun.

No Ethiopian administration adds on the successes of the preceding administration. Whether it be with the legal system, politics, development, or anything else, this is the root of practically all of Ethiopia’s problems.

Others have suggested Ethiopia may be able to reach the Red Sea via Ras Dumera, a thin free line that runs between Eritrea and Djibouti border.

Africa is home to fourteen landlocked nations. There is no other nation, however, that is as big, and as populous, as Ethiopia. The thirteen African nations that were already landlocked begged the UN to intervene before Ethiopia became landlocked.

Aid couldn’t get to these landlocked African nations. Even when a machine is replaced by a different brand, spare parts still come in. Because perishable goods take longer to reach the landlocked countries, importing them was unimaginable.

In order to negotiate between the African states, the UN tasked Yusuf Ahmed, at the time Ethiopia’s transport minister. This occurred under the Derg, shortly after which Ethiopia became a landlocked country.

A Kenyan academic once stated that Africa shouldn’t have more than 20 ports-accessible nations. He claimed that because even tiny governments are permitted to be countries, landlocked nations are created, dividing Africa into 55 countries.

However, the AU is introducing a very efficient procedure to grant all African nations access to ports. This will become a reality once the African Continental Free Trade Area (AfCFTA) is completely operational.

Of course, until Ethiopia uses them, the ports in Djibouti, Eritrea, Somalia, and other countries on the horn of Africa stay inactive. Masawa Port was undoubtedly a crucial tactic in WWII, acting as a stepping stone for the allied troops’ advance into Eastern Europe.

Currently, Ethiopia is attempting to enter Berbera port, which is positive.

Haileselasie made every effort to integrate Eritrea into Ethiopia in order to get access to the port. Assab port is obviously useless if there is a blockade of any type at the Suez Canal or Babel Mandab. Ethiopia is better off using Berbera port. There is nothing anyone can do because Berbera is the gateway to the ocean.

How can Ethiopia’s efforts to secure ports be impacted by Somaliland’s de facto status and lack of recognition?

The issues in the Horn of Africa can only be solved by peace. The horn has a sizable population. The chaos persists if this force is not used to development. Countries in the Horn of Africa must work together for the benefit of all.

The fewer jobs we produce, the more unstable we become.

Why do young people join OLF-shene, TPLF, or other armed organizations when they could get a respectable job, a home, a car, and vacation packages? Everyone wants to see equal development because they want to see their own country prosper.

Progress can lead to peace.

Due to the absence of an independent African state at the time, Haileselasie was banished to England. For that matter, there was no state.

Many people agree that Africa’s instability stems from the distribution of the same ethnic groups among its various states. Can African countries redraw the borders that colonial forces drew and reestablish nation states?

Ethiopia was at the vanguard of African decolonization in 1963, when the Organization of African Unity was established in Cairo. The main issue when the UN decided to decolonize was how to recognize and define the borders of African states. War was imminent amongst Africans if they had to trace frontiers back in time.

The UN and OAU ultimately opted to keep things as they were. In other words, borders and states begin at the location of the colonial boundary.

Each nation in Africa has territorial claims. We can’t, however, go back in time and fix it.

Ethiopia once ruled a sizable region, including the modern-day nation of Yemen, during the administration of King Kaleb in the fourth century. But we can’t claim it now.

The answer is that by uniting Africa through the AfCFTA, the AU’s economic integration agenda can eliminate the need for political frontiers.

Of course, Ethiopia is the nation that will be most negatively impacted by the status quo. The Congo, a sizable nation abundant in natural resources, was about to become landlocked. However, they were able to enter the Atlantic Ocean by Kabinda that was incredibly small. By the way, Congo provided the uranium for the bomb dropped on Japan.

A little opening between Djibouti and the Eritrean border allowed Ethiopia to reach the Red Sea. However, nobody is willing.

A serious hunger broke out during the Derg, and Nordic nations wanted to send aid cargoes. However, there was no way for the supplies to reach Ethiopia. Nobody would have protested if the Derg had taken one of the ports in the Horn of Africa at the time by force.

Ethiopia’s survival will depend on how its ports are handled in the current context of rising import volumes and growing population. It will either receive a peaceful response or a harsh one. Ethiopia must have a port, if only to use the congested route between Eritrea and the port of Djibouti.

The Ethiopian government also has to improve diplomatic connections with the surrounding nations so that they will consent to us establishing our own port.

Do you believe that Ethiopia’s conflict and ongoing instability are a result of the country’s power structure?

Ethiopia’s primary issue is underdevelopment as a result of missing out on the Enlightenment, the Industrial Revolution, the Agrarian Revolution, and the Technical Productivity Periods of the middle Ages.

According to Gibbon, who lived two hundred years ago, “the Ethiopians slumbered for over a thousand years, oblivious of the world by which they were forgotten.”

Of course, since we remained closed, we were not colonized. The mountains of Ethiopia were impenetrable to any force. Due in part to the progress that colonizers sparked, several African nations outperformed us.

Ethiopia nevertheless continues to be rich in resources and treasures. The only nation in Africa with a written past and its own alphabet is Ethiopia. 80 percent of Ethiopia’s bibles were completed and authored in the sixth century. At the time, the western bible was still in its infancy.

Additionally, Ethiopia was crucial in the spread of Islam and Christianity. Ethiopia was the destination of the first Hijira, not to Meca and Medina.

Unfortunately, because we were isolated for a millennium in between, Ethiopia’s civilization did not maintain its early impetus. We woke up when the world is already way ahead of us. We were still plowing the ground with oxen and yolk when Ethiopia awoke once more.

Youth in rural communities no longer have access to land for farming as a result of the land policy. Therefore, everyone is moving to the cities. Not only are Ethiopian towns crowded, but the proportion of farmers is out of proportion to the country’s growing consumerism.

Unemployment is widespread. There is a shortage of farmland. Ethiopia’s current issue stems from this. For the first time, PM Abiy Ahmed is attempting to spread large-scale agriculture to lowland areas in addition to the rain-based, often small-scale farming in highland areas.

What do you think of the administrations ongoing judicial system reform?

We voluntarily submitted to Ethiopia’s complicated legal system. One institution cannot bring about justice system reform. Huge amounts of public resources are being used by the decentralized justice system.

Ethiopia cannot support a decentralized judiciary when dozens of regional entities each have their own legal framework. This has to be combined.

Abiy recently complained to the parliament about how corrupt the legal system and police are. A few judges have been furious. It is well known that some judges accept bribes. Even judges of the top court experience this.

It is incorrect to hold the PM responsible in a legal system as tainted as Ethiopia’s. Though it is a challenging undertaking, we must find solutions to fix the issue rather than pointing the finger at one another.

The Court has the most authority in any nation that wants to advance. The future of the nation, business, and daily life depend on the Court.

What big setback do you believe has occurred since PM Abiy came into power? Was the transition peaceful?

We must research the causes of our ups and downs. Ethiopia has not done a very good job at nation-building. There are distinct state borders in Europe. However, the societies are very interconnected and quite similar. They are similar in terms of culture, languages, and universities. But the Ethiopian society has been segregated from one another, living in separate cultural enclaves.

Social media is currently dividing our society even more and pitting everyone against one another. Nobody is accepting accountability. We have much work to do in order to build a civilized society.

Ethiopia’s unemployment and unrest don’t surprise me because I am aware of our incapacity to provide quality labor and excellent jobs.

Five years ago, nation-building and good governance were the social movement’s top demands. Today, the issue has expanded to include the state’s continued existence. The student movement during Haileselasie began with a “class struggle” and concluded with ethnic politics in a similar manner. Why do political groups in Ethiopia consistently fail to achieve their goals?

Due to the students’ limited exposure to other ideas and the “class struggles” popularity in Cold War-era politics, the students’ movement adopted it. However, the class battle diminished and gave way to an ethnic conflict, which Meles Zenawi pursued.

Many Ethiopian academics today, particularly those in the diaspora, believe that ethno-nationalism poses a threat to the state’s very survival.

This indicates that the nation-building process in the country has been derailed by ethnic identity politics, which is having an impact on both the nation-building process and the state’s very existence.

Nationalism is not necessary for Ethiopia. The United Kingdom, France, the Netherlands, and even Italy are examples of nation states. The US, however, is not a nation-state. Europeans make up half of the American population.

One hundred years ago, Ethiopia became a nation-state. However, due to a number of criteria not being met, Ethiopia was unable to become a nation-state.

Many academics, particularly those from Addis Ababa University, continue to vehemently inform the media that Ethiopia needs to become a nation-state.

Talking about nation states now is a farce. Instead of a nation state, Ethiopia needs to be a patriotic state. Everyone in their own ethnic group is patriotic. Every Ethiopian, including Oromo, Kembata, Amhara, and everyone else is a patriot. That is what the United States is.

Everybody is present in America, including Latinos, Chinese, Indians, French, and Blacks. However, they never give up on the United States, which is their nation. Although they are patriotic states, they are not nation-states. To advance a patriotic state, we must work together.

In Gojam, there is no such thing as a pure Amhara. Every ethnic group has ancestors from different ethnic groups. Only our names reflect our racial origins.

Ethno-nationalists and ethio-nationalists swing back and forth in Ethiopia’s politics all the time. This constantly sparks conflict and a struggle for dominance. How can we transform it into a nation of patriots?

The constitution may impose restrictions on it. It can be written into the constitution if everyone agrees to it. Otherwise, Ethiopia will experience civil conflicts and revolutions.

Many people concur that the majority of Ethiopia’s issues can be resolved if the present constitution is altered. Do you agree?

It should be altered, in my opinion. Both educated and uneducated individuals are condemning PM Abiy for sticking with the current constitution. The constitution is frequently compared to an Ark. If the public does not believe in the law, it is just a piece of paper.

Therefore, if a carefully considered constitution is substituted, Ethiopia’s issues can be resolved.

Human rights advocates and even government representatives claim Ethiopia’s judicial system, especially the court system, is unprepared to handle cases involving human rights violations. They advise Ethiopia to start accepting the jurisdiction of extra-national judicial systems as a result. This means that Ethiopia must recognize the authority of regional and international tribunals over any violations of human rights.

Does doing so undermine Ethiopia’s sovereignty?

Only when the executive, judicial, and legislative branches operate in accordance with the check and balance principle can Ethiopia’s justice system be said to be in operation.

Judges are only answerable to the law. Because I criticized the Derg’s military court system, I was removed from my court position. Since 1948, Ethiopia has fully embraced the rule of law. Judges must, however, exercise their authority.

Courts have full authority to resolve any dispute, with the exception of arbitration disputes. Ethiopian courts have the authority to adjudicate matters involving violations of human rights, particularly at the high courts and Supreme Court.

The establishment of a different type of court system in Ethiopia must be spelled out in the constitution. For human rights matters, we can set up special benches, but we cannot establish a separate court or division.

The UN human rights commission is currently requesting entry to the country in order to examine human rights abuses that occurred during the Tigray war. The agreements and treaties were approved by Ethiopia. What would happen if Ethiopia resisted?

We have observed that the west consciously wants to harm Ethiopia in numerous instances. Since the founding of the League of Nations, this has been the case. Sanctions are being imposed on Ethiopia.

Mussolini would not have been able to attack Ethiopia if only the US had imposed gasoline sanctions on Italy. Because the US continued to supply fuel to Italy at the time, Mussolini resumed the invasion.

Ethiopia was brought up thirteen times in UN Security Council discussions last year.

International law thus serves as a vehicle for both justice and abuse.

The US regularly uses the UN to impose sanctions on nations it wants to destroy.

Never should Ethiopia yield to outside pressure.

Ethiopia has ratified a number of international human rights accords and conventions. By the way, Theodore Roosevelt’s wife was the one who first proposed the 1948 Universal Declaration of Human Rights (UDHR).

It forbids the use of cruel or inhumane punishment. Ethiopia had a death penalty at the time. The emperor delayed ratifying the UDHR rather than repealing the death penalty law. Ethiopia, however, is the first country in Africa to sign the deal.

Politics is at play right now, not just a general worry about human rights abuses. Before authorizing foreign investigators and acknowledging their jurisdiction, it is imperative to exhaust all domestic options. Extra-national venues may be taken into consideration if there is no statute allowing human rights victims to appear in court or if the court is unable to uphold the law.

America commits to defending democracy. Democracy is the majority’s way of ruling. Therefore, by simply agreeing, the majority can flip the truth on its head.

Can the Chief Justice of the Supreme Court call the executive to inquire of him or her? How are checks and balances made?

The Chief Justice of the Supreme Court lacks any judicial or executive authority. The president only serves as the court’s speaker. The president only responds when asked.

By the way, a judge on the Supreme Court is distinct from a judge in a lower court. The author of ye’ ewunet Mirkuz, and a lawyer, Wondimu Ibsa was born in 1947 in Arsi. Having survived the 1969 revolution, he joined Wez League and then started teaching. In his career as a former politician, Wondimu had gone through several challenges as a former politician before becoming a lawyer. He survived the 1969 revolution in Ethiopia and was arrested in the famous Maekelawi for 150 days. When he decided to become a lawyer, his first task was serving political prisoners facing terrorism charges. Lately, he is more known for sharing his political views on main stream media outlets. The Reporter’s Selamawit Mengesha sat down with him, as he reflects on current affairs and his journey in politics of Ethiopia.

The Reporter: can you tell us a bit about yourself?

Wendemu Ibsa: I was born in what is considered a large family. I had 17 sisters and brothers and my father had 47 children from 3 different women. When I was growing up the schools in Arsi used to encourage us to learn Amharic. And some people associated it with racist remarks but it was purely to help us learn other languages.

I was amongst the students who survived the 1969 revolution, I was in ninth grade and I remember crying to my mom when soldiers would beat us senseless. When the ‘edget behibret’ campaign started, the Ethiopian People Revolutionary Party (EPRP), wez league (ወዝሊግ) and All Ethiopians Socialist Movement (AESP) were wreaking havoc across the country.

I joined senay leke’s party Wez League. Students whose average was above 90 were selected to give after class courses back then, for which I was selected. I started working as a teacher starting from 1969 to 1971 with a 180 birr salary. Through all of this, we were running the revolution on the side.

I’ve went from having my parent’s religion to having no beliefs but I eventually got baptized at 40 years of age and became an orthodox Christian. I then worked as a money collector at the church for four years.

I was also detained in the famous ‘Makelawi’ for 150 days, when EPDRF took power in 1983.

I’ve also worked as a supervisor and a director in Hawassa. As a lawyer in Adama, I joined the Oromo Federalist Congress in 1998–2002. In 2006, when more than half of OFC members, including Merara got arrested, I decided to give my services as a lawyer. Back then, lawyers used to charge more than 300,000 birr to represent people accused of terrorism, because representing people accused of terrorism could label them as terrorists as well. Knowing this, I offered my services at makelawi for free, and since then I have represented 600 people accused of terrorism.

When I was serving free of charge, I faced a lot of opposition from people including my family. I remember a judge telling me that I can’t defend people charged with terrorism anymore, but 17 of my colleagues had already decided to represent those accused of terrorism.

Prime Minister Abiy Ahmed (PhD) has said they will not arrest anyone without due diligence, yet we are seeing a lot of people arrested abruptly and detained for several days without cause. What do you think changed?

“We don’t arrest without due diligence,” is just a political way of speaking. Currently, the parties in Ethiopia including the incumbent follow a party politics system, meaning it is the top executive’s playground. A political party stands for justice for those that are with it or against it. The parties in America, the republicans and democrats, are political parties, while Prosperity Party, Ezema, ABEN, Enat, amongst others, look like they are trying to shift from party politics into political parties.

A lot of Ethiopians were involved in the green legacy campaign. But out of the 53 parties, not more than 10 were involved. Why weren’t the rest involved? The legacy is not for the PM but rather for generations to come. They could have contributed to something that made a difference but the only objective of party politics is to obtain power.

When Abiy said that, it was in the essence of party politics. To whom does the PP belong to? Is it for the prosperity of the city, the rural area or the farmers? It should have been called “Ethiopia’s prosperity political party.”

Political parties care about the country, its people, history and culture. Even if political parties try to gain power they still stand for the people. The Civil Code, which has been in action since 1952, says that people can be arrested based on suspicion with or without a court ruling. Back in the feudal days, it was only allowed to arrest suspects from 6 in the morning till the sun sets but not after even if they were guilty. Police can surround him but they can’t arrest him, no matter who the person is. If Abiy does not practice this law, then the EPRDF and Derg’s plague hasn’t quite left his system yet.

The practice that is becoming normal these days where they hold people in prison for eight or nine days is not acceptable by law. Statements like “We don’t arrest without due diligence” are said with a political intent. Politicians and political parties think about what to say to get more applause instead of thinking what would actually benefit the people.

What is the cause for the killings of innocent people in Ethiopia? Who do you think is responsible for these acts?

The instability in Ethiopia has its roots dating hundreds of years back, back when colonizers had their eyes on Africa. The victory at Adwa was not just a victory against Italy but against the whole of Europe. Ethiopians used to unite to defeat these outside forces. When the west found out the secrets to Ethiopia’s victory happened to be in our unity, they needed to dismantle this unity through civil wars and parties. These parties who have a budget from the west have the sole purpose of creating conflict and rift between ethnicities.

Controlling the source of income was also a measure used by the west since the country is dependent on donations. After the 1945 World War, Japan was forced to adopt a strong military system. Within 30 years, Japans capacity was just as good as the UK, after changing the policies they were forced into. The donations are an indirect attempt at colonization.

The crimes we’re witnessing today is a result of years of planning by the west. There is this thought process circulating where people think their ethnicity came first or that it is better.

Even banks organize themselves based on ethnic lines; they have the “divide” mentality. People that are losing their lives are Ethiopians and there is no need to classify them based on ethnicity. Being proud of your ethnicity only validates Ethiopia more, because our ethnicities are found within Ethiopia.

If we take the religious approach on how humans originated, it started with Adam and Eve. They were human beings and not Amhara or Oromo. We are Ethiopian’s first then ethnicity follows; so, to refer to the atrocities in Wollega as atrocities committed on Amhara women is accepting the narrative pushed by colonizers.

Amhara’s policy is Oromia’s policy and vice versa; we can only salvage Ethiopia when we stand all for one and one for all. Being Oromo, Amhara or any of the other 80 ethnicities is natural but claiming one is superior over the other is immoral.

How do you think this can be mitigated?

Parties and politicians that stand for terrorism should be dealt with to make way for the people to have an active role. The government feeds 1.7 million students in Addis Ababa and its surrounding. It provides books, uniforms and bags. The only thing families worry about is providing the dinners. This is not something to overlook. When I say this am not saying prosperity party or Dr. Abiy are without flaw, all governments have flaws.

The community’s outlook on laws and courts is relatively better than it was before. Do you think this has anything to do with the organizational change? If there is change since most organizations are individualistic, how can that be mitigated and continue long after the individuals have left?

Prosperity Party asks organizations to help it achieve democracy. A strong military can only be formed when there is a strong organization. Law enforcement is the government’s duty while respecting the law is everyone’s responsibility.

In a meeting amongst 1000 lawyers in Oromia held by the Oromia Lawyer’s Association, a lawyer said “there are no courthouses in Oromia, or judges. The only place where judges and courthouses exist is at the Oromia Supreme Court.” But there are Oromo judges and courts in Ethiopia. If we’re accounting for injustices, then every other supreme court could come into question. The acts of a few lawyers and judges that are deeply intertwined in ethnocentric beliefs do not dictate the profession as a whole. Even the PM has no right to misjudge the profession because there are honest judges and lawyers.

What should be done to promote accountability? Would people who have violated human rights be questioned in the court of law?

The current atrocities are due to terrorists, whether they are Oromo terrorists or Amhara terrorists. Both cultures have their own way of justice that involves forgiveness. The involvement of the elderly is needed.

Political parties are creating a better life for their children while condemning the innocent. Those responsible for these acts of terrorism shouldn’t be judged in court. All the region’s religious leaders and elders should judge and reconcile things themselves.

The newly formed National Dialogue Commission plays a vital role for this, but political parties have been skeptical since its inception. If all Ethiopians come together, it will help the national dialogue to be successful. As politicians put it, the dialogue is not one carried out between parties but one that involves farmers that make up 85 percent of the population. As of now racist politics and ethnocentric politics have spread.

The current problem will not go away easily. It will take several years of working together.

There is a noticeable change in courts after Meaza Ashenafi took power, but there are also a lot of problems at the same time. Just like how a teaspoon of poison could ruin a barrel of water, the acts of a few taint the entire institution.

How can we stop the problems in all the regions of Ethiopia? How can the region’s questions be answered while maintaining peace?

The people should give information as a way of solidarity with the government. The 547 representatives at the Parliament represent 120 million people. For a parliament member to talk about their own ethnicity alone is really shameful, they are not there to represent the Wereda that put them there but to represent the people of Ethiopia.

If there are people in Parliament that spread fake news, then prosperity party is negating its own progress. There are a few that are openly opposing the death of fellow citizens. When a citizen is hurt in wollega, there should at least be an opposing brief against it from the Parliament. If prosperity is leading the country, a region’s Special Forces should be able to help another region’s army. The defense force alone cannot save the country.

Rophnan Nuri, commonly known as Rophnan, is a prominent performing artist, musician, DJ, singer, songwriter and an audio engineer that blazed a trail for Ethio-infused electronic and house music. The Artist made a name for himself as DJ Rophi before releasing his first album, Reflection, in 2018. The album made him the first ever artist to release an electronic music LP in Ethiopia, becoming an influential figure locally and internationally.

Mixing traditional sounds with futuristic undertones and a powerful lyric, he dedicated his debut work as a voice for his generation. His work earned him multiple awards, featured with world famous groups like Major lazer, and collaborated with the Zambian rapper Chef 187 on the coke studio stage. He also held a successful country wide tour for a year and half.

His work and demeanor has earned him a feature on Forbes Africa’s 30 in the creative category, making him the first Ethiopian to feature on the list.

He recently released a successful album “3” earlier this year, which he followed up by “6” this past week. The two albums, which were released after his deal with Universal Records, offer incredibly produced music directed at the youth.

Rophnan announced the final album of the trilogy will be released before the end of 2022. Yosthena Aynalem of The Reporter sat down with Rophnan to talk about the mystery that is Rophnan Nuri.

The Reporter: let’s start from the beginning. Can you tell us about your upbringing and how you got into music?

Rophnan: Funny enough, it did not start out with music for me. Yes, I have known and loved music all my life but my journey did not start there. I am a singer but I am not just a singer, or just a writer. I am a recording artist that engineers and produces as well, but I am also a DJ. I think when you’re all of these things your journey must start with one thing. For me, it was recording.

I started recording sounds from a young age and little by little I went from recording to learning the guitar, DJ’ing and then singing. It all unfolded gradually to make me the artist I am today.

I remember I started recording my mom when I was 10 years old. That was my first experience of getting into music. Because to me it wasn’t just music, I thought everyone had the same relationship with sound and music as I did. Through time, I came to realize that not everyone was drawn to it the same way. At that age, I used to perform in front of students and they would love it, but I thought that was normal at the time.

I started recording my mom out of the love I had for her, I would use tape recorders that I make from scraps; I have always been a physics head because it helped me know the world better. I would always make things up from run down electronics or collect parts like dynamos; I have always been that kid.

I always wanted to keep a record of my mom’s voice in my tape recorder, so I’d play it on repeat until my battery dies and that was a 10-year-old me falling in love with sound and frequency. From then on, I started recording my little brothers, my neighbor’s kids, and my friends.

It became my way of keeping a photograph or picture of some frequency, those records painted pictures in my head that ensued emotions in me just like a picture would. I have recorded my mom till my last conversation with her, she is not here anymore, but I’ve kept her voice till our last conversation, so I have basically recorded my mom for 21 years.

So, how exactly do you experience sound?

I always see colors when I think of sounds, even when I am asked to do commercials. I will always ask them what their theme color is so I have a sound for that color. Every color in the way it’s painted or crafted has the same pattern in music because in order for something to exist it needs pattern. Music and creativity have a pattern of their own. A very good example for this is the project I did in Dorze in my first album, it was literally the pattern of their denguza (Welayeta Traditional Cloth) that inspired the music, and it is a mixture of black and red patterns.

So, the pattern on this attire is that when one color goes in, the other goes out, their song is the same way, so you can represent the color in different voicings and you have a pattern which is a harmony and the Dorze people are one of the most harmonious people and that is one of the things I learned from them.

Harmony is everything. It is embedded in their music, their day today life, culture; they know how to sing and be in sync within. That is how I see sound no different than pictures or any creative work.

What classes have you taken to master your craft?

Endless practice and my experiences were my lessons. I remember building my first studio with Abu-Walad biscuit box and Miyota DVD microphone when I was 13. I continued performing in class rooms and jamming, and I have also been listening to FM Addis 97.1 from the first day they opened. Eventually I started working there for three years later on in my life.

I think I was 10 or 11 when they started and from that moment on, my whole teenage time was spent listening to a lot of radio. Radio became a huge part of me, sound was everything because my experience is my mom’s voice but I started hearing her voice through other moms. Even when I travel and record, I know that tone, it has the same spirit.

A sound does not lie. That is why mostly my music is based on tone and notes. These are my inspiration when I make my music especially when I am trying to go deeper in the culture and get something out from it.

At what point did you start DJ’ing?

I started DJ’ing or I would say playing in mini media at the age of 15. I got introduced to computers at the same time and realized there is a thing called “software,” which allows me to record vocals and play with instruments that are already recorded, make patterns out of them and make music. So, I started doing that when I was 15.

What most people don’t understand is the reason my recordings are clear is because I’ve been recording for 21 years. I am more experienced than most people who are in my age group. I have been producing for 17 years now and I just turned thirty-two. So the reason why my production is this good and I am getting better every day is because I have been doing it for a long time. You have to understand that this recording, this clarity and this skill doesn’t come easily. You have to work on it and you really have to put your time.

When I turned 17, I actually started DJ’ing. I got introduced to a DJ mixer. I put out my first mixtape when I was 16, remixes of songs at that time, whether Amharic or English, I literally did what I used to do in the classroom and changed it into a record.

I already had recorded data in my head and the computer allowed me to turn that into a recording so I started DJ‘ing that music. It was a way to put my music out. It became the best platform for me instead of being a guitarist, a vocalist or anything else. DJ’ing was the first introduction for me to put my music out and then it goes on to working in Radio.

I used to play my mixtapes on the radio when I was 18, 19 or 20 and that gave me the platform to be famous. After that, I put out my second mixtape and then I continued producing even more, production has been there since I was 15 till now.

When I turned 21, I stopped putting out mixtapes after the third one because I wanted to do an album of my own. It took seven years of my life in the studio, worked day and night, 16 hours a day, every day, while DJ’ing at night and paying rent. That circle went on for seven years straight and then Netsebraq was born.

I went from 21 to 28 years old doing nothing but producing, learning how to write, learning to sing better, learning how to record, buying new better equipment, working on myself and my craft. It took everything out of me.

That is why Netsebraq sounds the way it does, it was crafted from scratch and I found a new sound for my generation the world has never heard of, a new sound for my country and for the industry and that took time.

I found myself in music, in a new way of writing, progression, of sounding, recording and all this took time. It was not just a project. Its impact can be seen through DJs coming into the mainstream, singers to find themselves. I hope I am not fooling myself when I say this but, I think Netsebraq proved to artist to be themselves and to sound like themselves. It brought free thinking to this industry but it didn’t happen overnight. It was something that was crafted for a long time.

When was the first time you Disk Jockeyed professionally?

I started doing my own Day Party’s after high school in college where I started throwing parties for people in my own age group and a lot of people came to my sessions. Back then, there was no platform you can use like Tik Tok so people just attended my parties using flyers and a lot of people showed up because of the mixtapes I used to release. At those parties’ attendees didn’t pay attention to the music, just how it made them feel, they don’t really understand the craft.

Out of the whole experience, what has been your favorite part?

Definitely my first album release party, because I had been working none stop before that and when reflection happened, I was famous in most cities as a DJ. I would go to Arba Minch and pack a place of 2000 people, as a DJ I was doing really well. I was making good money and had good exposure as well, especially on the last year before Netsebraq.

Netsebraq brought me to the stage as a singer, song-writer plus a DJ. The DJ part has been subtly following me. But my first album release party was a very special moment for me. It was three months after the album had dropped and the place was packed, people were at the gates lined-up because the place filled up early.

All of that happened within three months and it was very historic. An up-and-coming artist, who is a DJ, selling out a concert was not common; it was unheard of then. For me it was a moment I will never forget, because I remember the energy that night. I had never seen an energy like that in my life, that made me think to myself “oh wow, I have made it this far.” Seeing people sing along to songs that I wrote felt surreal, something I created spoke to them enough for them to know it by heart and that truly astounded me.

To answer the question, the release party truly stands out for me, especially when I was playing the piassa song. I remember time freezing, my friend and fellow DJ, who I grew up with, was back stage with tears in his eyes because of how amazing it was. We used to walk back home after DJ’ing because the first two years of my career, I didn’t have enough money to even pay for my taxi-fare home, so we walked to places instead. I dropped opportunities my family offered me to go to the US, I dropped out of Piloting school after completing almost everything, and I then joined computer school.

And were your family supportive through all this?

Well, my brother wanted me to go to Pilot School, he was ready to pay for it and arrange everything. I went and did everything, I didn’t think I would get in but then I ended up getting in. When I did, I went to my mom and told her that I made it in, that I could follow this path and that I didn’t think it was for me.

The only thing closer to music for me at that point was computers and I would rather go and study that. And she was very supportive, she said ok and that I should be careful. My family had always been supportive of my aspirations which I am forever grateful for.

I remember when I finally got the deal with Universal Records, the first thing I did was to tell my mom and record her in the process. She was always willing, she never turned me down. She was always there for me, had she said no to me backing out of pilot school back then, I would not be where I am today. Rophnan, as a musician would have never existed. I am forever indebted to them for that.

My father on the other hand used to always tell me “Whatever you do, sell it.” He never told me what to pursue or to stop music just that I should do what I love and whatever that is I should sell it. He raised all of us like that, if you love something learn how to sell it, so you’d learn to perfect it and love it even more. Selling it would give you the money, time and opportunity to grow it and polish it into something better.

If I never sold my first mix tape, even if my first salary was just 500 birr, I wouldn’t have had the resources to support my endeavors down the line. Money is money no matter how small it may seem; it will serve as a stepping stone. I am not saying to just do it for the money but you have to account for your time with something; gain something from it, no matter how small it may seem because your time is the most valuable thing you have.

You are currently amongst one of the top artists in the country, yet you are very private, not very active on traditional media but you’re also active on social media, why is that?

I wouldn’t say I am private, because I am always posting. People know what I eat, what the studio looks like, where I work out, when I’m working. If you ask an average person who follows me on social media what I do, they’ll tell you that “he eats healthy,” I go to gym at midnight.

But as for media, I usually don’t go out unto media because I don’t really have anything to say. I have been away from media for around two years now and that’s mostly because I didn’t believe I had anything substantial to say and I don’t want to come on and lie, so I chose not to say anything.

I am the kind of person who likes to understand people’s truth and delve in to it. I believe a lot of truth is subjective and I am open to hearing other people’s truth but I know that a lot of people don’t see it that way.

What I consider my truth might not be what people want to hear. So, if I were to come out on media and say what people want to hear and not my truth, it would be a lie. I never want to lie to my fans; that is disrespectful. I would rather communicate with my people through social media and show them what I hope would inspire them, show my craft and take them through my creative process. And when this album comes out, it wouldn’t be alien to them because they saw the work that went into it through my social media posts.

I would rather communicate through that because who am I to comment on things I don’t know and understand.

I know and understand that everyone also has their truth that they’re exposed to and I am nobody to negate or support that. Until we all find a common ground of saying I respect your truth as much as you respect mine, I don’t see the importance of going out in public and creating controversy instead of looking for a solution because we can see that nobody is listening to anybody anymore.

Everyone is looking for voices and opinions that confirm their truth instead of openly listening to everyone unbiased. So, of course I am private, because I have nothing to share that my fans don’t already know. I am just as confused as everybody else and if I can’t help, I would rather listen and try and learn about everyone’s pain and truth.

And to me, music helps me do that.

Interesting, steering a bit off topic, you’ve mentioned you regularly attend the gym at midnight, why do you do that?

For me, it’s more mental than physical, because I don’t want my studio to be the hardest thing that I do in my day. Because the hardest thing is always seen in comparison, the hardest part of your day is the most dreaded part no matter how much you love it.

To not lose the love, I thought I would create something more challenging for myself. Now for me, the studio will continue to be more exciting because it’s not as hard as getting up at midnight and going to the gym. Contrary to what most people would think being in the studio is very tiring. You sit there for hours and hours daily; the not knowing of what will come out of each session creates a lot of anxiety as well, so when I add the midnight gym on top of that, I would have a much harder thing to do, which pushes me to like the studio better.

I needed that push because I had to finish three albums in two and a half years. It took a lot out of me and not just me but it took a lot out of my management as well. To deliver three albums in this time frame was really hard. Normal working hours don’t quite cut it.

Back in the days, it was really hard for artists to make a living off of music but the tides are changing now and artists like you are making a difference in that. What do you think propelled that change from your part and your peers as well?

I know it is getting better comparatively but it is not on the trajectory it needs to be at. There are still artists that are not earning their fair share but I think YouTube democratized so many things. It gave the power to artists to some extent. What got better is not the payment but the exposure. Artists get to be discovered in a quicker, better way.

As for back in the day, if the person who worked at ‘hire treat’ did not like you personally no one would know your name. Now, we’re exposed to more artists because we have access on our own terms. Young artists have better platforms now and bigger exposure where their music gets the chance to be discovered by many.

For me personally, I am rooting for all of us. When I hear an artist getting paid a million birr or dollars for music, it makes me ecstatic whether I like the music or not. It makes me so happy because the industry is getting paid this much, which is a win for all of us. It would mean fewer artists who are unable to support themselves and their family through their craft.

At least they would set a standard of artists earning a good life. I think what is happening is there is the YouTube market that is supporting local artists. Even if the public isn’t directly paying for the music, they are exposed to it at least. There are platforms that would support artists even more like Awtar but people barely use them.

When people buy the music, the artists will directly benefit from that so I encourage listeners to get their music from platforms like that. I think that is the main market but for now, YouTube works wonders for the industry.

What are your thoughts on people saying Ethiopian music died after the golden age? Some might say today’s music is more diverse and the time for it is now. What is your input on that?

Whoever says the time for Ethiopian music is now, I just want to say that I appreciate you all. Because a lot of people discourage what the industry is right now, saying it could never amount to what it was back then. The way I see it, if you grow up listening to any type of music, even if it’s just whistling, you’re going to have an attachment to it because it would be nostalgic.

It is hard to compare today’s music to something that has been part of people’s memory for 40 plus years. There is a lot of memory attached to it that can’t be compared. It is like expecting a new born baby to win a race against a 40-year-old, if you were to give 20 more years to the new born they will definitely win against a 60-year-old.

So, if you give us time, we too will have that nostalgia factor that would make us amongst the classics in people’s mind. Every generation has a favorite and it mostly has to do with the memory attached to it. I think it has more to do with nostalgia rather than production, quality. The golden age music was well produced, very powerful and well written too but I don’t think they need to be compared with today’s music.

Today’s musicians are very creative. They too have things to say, they too are well written; the people making the comparison probably grew up with those songs and they might not understand today’s music. Not understanding something does not make it lesser.

Considering artists back then, even the greats, did not put out a lot of albums or singles when compared to today’s artists who put out music more often. Why do you think that is?

I think it was very hard to put out albums back then than these days. But artists suffer to put out albums these days as well. There are easier platforms to make and sell your music on but I think artists are still suffering in a sense that studios are not easy playgrounds to play on.

The industry still does not really pay creatives; studios, composers and writers are not paid the right way. So, until that day comes, don’t expect too much creativity because creativity is also run by the freedom of time that you can make music.

If I am not getting paid well, I’ll just do something to pay my rent. Something that is easier. That is why getting paid can make a difference. When I say this, people might automatically say in the 60s they were not paid but they did so many things, no they were hired by the government.

These writers were hired by the Ethiopian National Theatre, Ras theatre, Cinema Ethiopia, and all those bands in mazegaja were hired and they were workers who were paid a monthly salary especially during the time of Haile Selassie I. That’s their actual job. They were workers who went in at 2 o’clock and left at 8. Most of us are self-employed so that also has its own impact on what you’re going to do and what you’re going to deliver to the art because you can abuse that freedom as well.

In general, I don’t agree with the comparison and I don’t think it’s fair. My generation is putting out a lot of good stuff. Think about it, if you call your days the good days and things were so well in the 60s and everything was nice, then why you would expect better things from me then, while you understand I’m living in a worse time.

So, coming to the new album, you said earlier that you were into physics; does that have anything to do with the 3, 6, 9 and the universal numbers?

Yeah, I mean you have to understand the Orthodox Church has a big explanation over this because it has a lot of knowledge about the world and the universe and everything from ancient times, but also those teachings were spread throughout the world in different ways and one of the people who understood this in early times was tesla.

He brought this idea of these three numbers being the key to unlock the universe and to understand the whole thing. If you understand things from the perspective of frequency, vibration and energy, you’d understand the world in a much better perspective.

Instead of saying me, me, you will start to say us; instead of just boosting up your ego and saying, man is everything in this world. You will understand the relationship of man in the world. And then you will protect the world.

What I’m trying to put here is for my generation to see things from a bird’s eye view. Let me put it this way, everything that we use today, phones, computer, internet, technology, all these things that we kill each other for is made by the people who understood this, these higher understandings of the world. Because how can a person make a phone that can do miraculous things without understanding the world holistically. I think the perspective that we have about ourselves and the universe is distorted and that’s why we’re very tribal and biased.

The bottom line is, I think the understanding we have about ourselves and the world should change or should be in check.

So, what I try to do with this 3, 6, and 9 is to show people that there is a higher perspective of looking at yourself, the world, how it goes and how it functions. If you understand that, everything becomes lighter, everything becomes a shape that will be understandable by the next person.

The names are inspired from that. So, when people say, oh, it’s three, it’s six, it’s nine, it’s like you’re engaging with these numbers, raising curiosity amongst listeners to look into these numbers, which will hopefully raise a question in people’s head so that they can have a better understanding of the world.

It’s always much better to look at yourself within the world. What I mean by that is like, yes, you are you, but you are in the world so know the relationship you have with the world, and then you’ll have a healthy thought, instead of saying what did the world give me? You’ll understand and you’ll start to say, what did I give to the world, what are the things that I said this morning? Most of us we’re just living inside our head, we don’t really live.

How has the experience been with Universal Records?

Well, I’m learning a lot from how the world moves, how it works, how everything is intentional; intentional in a sense that the world is moving faster. It was like going from being a small fish in a tank into a small fish in an ocean, it’s so big and sometimes it’s challenging but exciting for the most part.

I’ve seen a lot of people working day and night to make things go the right way. For me, it starts from my management company, Dots, all the way to universal music Africa and the whole team who have worked tirelessly to make things go smoother for me. I am very thankful.

The one thing I’m most thankful for is getting to release 6 at this moment, because according to our deal with the record company, I wasn’t supposed to release it now but we demanded it because I felt my generation needed it. There are songs in the album I really want to put out at this moment because my generation needs it.

They’ve been willing to compromise on things for me and understand that I’m coming from a different side of the world that they never existed in. So, it’s been challenging for them and I can understand but they they’ve been nice to me, I feel like I’m in great hands to join the world.

Other artists like Aster and Gigi have signed to international companies and represented our country. Hopefully, I’ll be able to get to do that as well. I’m following in the footsteps of giants. I hope I deliver something worth a while. Honestly speaking, to join the international world has been a dream come true.

Do you still get to work on crafts that are still true to yourself?

Of course. They do not affect my craft, rather they just help. That’s what people don’t understand. People thought they’ll make me do things their way, if that was the case, I would have never signed anything.

They’re here because they loved what I do. So, why would they touch it? But they will help me delve in deeper. They want me to experiment in our cultural music more and they also allowed me to stay here. I’m still based here; I’m producing my music on our soil. I’m still intact with the people. I’m still a part of the community.

The future is exciting. I have a full control over my artistic freedom. They don’t bend my music into anything, they even provide me with more freedom and guide me through the lines, and present me with better opportunities.

What is the perspective of 6 and what does it mean?

Yeah. So 6 means a perspective of a six-year-old. When we were at that young and impressionable age, our intentions were clear and our ego was not built the way it is now. We were not stiff. We were eager to learn and we had a better understanding of the world.

I think in order to become a better generation, we have to learn how to become young and find our inner child. To tap into my inner child, I went to kids. I went to orphanages and just spent time with the kids, communicating with them, asking them to paint me stuff.

I’ll give them words and learn their perspective. For example, I’ll ask them for testify. Like, what do you think about the word testify? And they’ll just paint me stuff. Through the genius of my graphic designers Fanuel Leul and Tsegaw Tesfa, we were able to incorporate those paintings on the album art.

I also wanted for those six-year-olds to see themselves being represented, so that they can have better guts, that our traumas cannot hurt them, for them to have a thicker skin to say no to us, if we are ever to push our biases onto them.

I want my generation to be purposeful in not passing that trauma to the young. I am hopeful this would empower them both. We are alien to kids because our biases have molded us somehow. They don’t quite vibe with us that much. When they hear their voice in my album, they’re automatically engaged through the things that I say and to the songs that I put in there. It will eventually become theirs. So, when they grow up people will not manipulate them, the way we have been manipulated.

What can we expect going forward?

“9” is coming out in December and somewhere between then and now, we’re planning on having a festival celebrating all my music with fans.

It’s going to be a series of beautiful engaging events, and till then I hope everyone enjoys 6 and gets the message.

The TPLF is the enemy of Ethiopia and the people of Tigray point blank. The government says that it would make peace with the group but as Ethiopians we can’t forgive that party even if the government fulfils its diplomatic responsibilities. I did not say the people of Tigray, rather just TPLF.

The role of Ethiopia’s government should be identified; the election board should not be giving out certificates for parties that work with terrorists. If they get a certificate, then the TPLF would need one as well.

The country is on the precipice of prosperity now. Our current state could be depicted as a nine month pregnant women ready to give birth on any day. It is always darkest before dawn, Ethiopia’s people come together even stronger when there problems pile up.

We should be careful with parties that try and create the gap between ethnicities.

How can the government enforce a justice transition? What should be included?

Justice transition means the world did not get civilized through a revolution, but rather through reforms. Reform means averting the negative impacts and carrying on already started projects.

Justice transition implies those that refuse forgiveness and acceptance from the recently started national dialogue and the people that are being accused. Each one of the perpetrators will not be brought before court but instead will have to reconcile their differences in the regions customs, which is according to justice transition.

This is the outcome of the reforms. A new education law is now being drafted, in addition to changes to the education policy. These and other innovations in teacher education are greatly appreciated.

The Association applauds the improvements and supports the next developments.

In the last three years, for example, the panda bag arrived in Djibouti and stayed for more than a month, and we were required to pay tax. We would not pay that money if the Ethiopian government was facilitating faster. We occasionally lose bags or items in a warehouse where we keep the bags.

It’s pointless for me to go over what happened. It is all well known that we simply need to take our time and evaluate everything before coming up with a way to mediate it.

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Ethiopian Reporter, Political, Kibir Minister, Editorial….

Ethiopia Country Report Context

Key changes and developments in the newspaper marketplace in the past five years

According to the Ministry of Information, there were 68 newspapers and magazines published and distributed in July 2006. This is an increase from five years ago (though figures for 2000 could not be found). There are 56 newspapers and 12 magazines. Most papers are weeklies, bi-weeklies and monthlies, with only three dailies, all national, in existence. Many of the new papers in recent years have been tabloid weeklies responding to news events, such as the 2005 elections. However, some of these papers disappear when there are no strong news events to cover.

Newspaper in Ethiopia

Daily

Twice a week Weekly

Every two weeks Monthly

Source: Ministry of Information, personal communication, August 2006

The newspaper sector is limited by the country’s low literacy rates, and most titles are said to have small print runs of only about 3,000 copies. At the time of writing this report, no data could be sourced on the percentage of the adult population that reads a newspaper.

At national level, there are three daily newspapers (see Figure 8). The three national dailies are Addis Zemen (Amharic), The Ethiopian Herald (English) and the Monitor (English). The Monitor is the only private-owned daily. There is no information available to distinguish whether the remaining 53 newspapers are national or regional papers.

There are 12 national magazines; 10 published monthly, two published every two months, and two published quarterly. Ten of these magazines are in the Amharic language, and two are published in English, a monthly and a bi-monthly (Ministry of Information, personal communication, August 2006).

7.2 Investment and growth in newspapers in the past five years

There has been a significant increase in the number of papers in the past five years, with new privately-owned papers leading this growth.

However it is difficult to comment on the exact size of the newspaper market, as there is no research available in this area. Anecdotally, however, there was evidence of high demand for private papers during the May 2005 election period, but with a contraction in the number of private papers after the election.

Only a few of the newspapers, such as The Reporter (with Amharic and English editions, owned by the Media Communication Centre) and Addis Admass (in Amharic) are backed by strong private investment. Some papers have folded after not being strong enough to withstand challenges pertaining to legal or other matters. Some complain about delays in getting permits due to delay in finalisation of the provisions of the new Press Law. Another barrier to newspaper sector growth, according to the International Press Institute (IPI, 2005), has been the banning of some newspapers and the detention of journalists following the unrest after the May 2005 elections.

There is a state-owned news agency, Ethiopian News Agency, and a private local one, Walta Information Centre, both of which mainly serve the state media. Walta Information Centre is owned by the ruling party (EPRDF), so is categorised as state-owned in Figure 9. The private media do not have arrangements with these news agencies to provide them with the content they require, and this remains a major challenge for the private media. The other five news agencies operating in the country, such as Reuters and AFP, are all international.

State or government-owned/backed

Plurality, ownership and control

The private newspaper sector in Ethiopia is still very young and, because of lack of transparency around ownership, it is not known whether ownership is diverse or concentrated in a few hands. However, Kifle Mulat, president of the EFJA, states that all newspapers are under censorship and all are pro-government and controlled by the government (directly or indirectly) (K. Mulat, private communication, 1 September 2006). There is strong opposition to this view, however, from one Ethiopian editor and publisher, Mr Amare Aregawi, who argues that there is no censorship in the country because it is unconstitutional and illegal for the government to practice it.

The Minister of Information states that of the 56 newspapers currently being published, six are government-owned and 32 are privately-owned. The remaining papers are owned by Religious Organisations (8), Associations (6), Political Parties (3) and NGOs (1).

Of the 12 magazines published, 11 are privately-owned, while one is owned by a religious organisation (Ministry of Information, personal communication, August 2006).

Figure 10 below lists the 10 most-read newspapers. These papers can be classified into state, private and party papers. Addis Zemen is a daily state paper. Netsanet, Addis Admas, Ethiop, Askual, Minilik and Ethiosport are private weeklies. Party weekly papers include Oromiya, Abyotawi Dimkrasi and Woyin.

The number of newspaper readers is generally thought to be quite low, and there could be several reasons for this. First, it is possible that the culture of reading has not been properly cultivated, despite the fact that literacy has been increasing over the past few years. Another possible reason is that, in the case of the private newspapers, they cannot afford to distribute beyond the capital Addis Ababa, due to both financial and infrastructural constraints.

Newspaper Netsanet Oromiya

Abiotawi Democracy

Addis Admas Ethiop Asmat Minilik

Addis Zemen Woyin Ethiosport

Percentage

Source: Ministry of Information, personal communication, August 2006

7.4 Diversity

The past five years has seen an increase in the plurality of ideas found in newspapers. For instance, there is frequent newspaper coverage of women’s and religious issues, with some papers even published by religious institutions. Private newspapers provide more entertainment coverage than the government ones do.

The majority of the newspapers are in the Amharic language (33), and the second most common language is English (14). There are also several bi-lingual newspapers, publishing in both Amharic and English (5), and there is one newspaper that publishes in Amharic, English and French. There are also newspapers written in Oromifa (2), Tigrinya (1) and Arabic (1). (Ministry of Information, personal communication, August 2006). One interviewee expressed the need for further objective research to obtain more accurate data on readership.

7.5 Quality of newspaper reporting

With the great increase in the number of papers, there has also been an increase in journalistic work. The quality of journalism is highly uneven. Whilst some commentators describe work as lacking in ethics, independence and professionalism, others assert that concerted efforts are being made by journalists to improve standards in the sector.

7.6 Specific challenges

Challenges faced by newspapers in Ethiopia include low reading levels, the high cost of distribution outside the capital Addis Ababa, and a lack of professional journalists.

Key findings

The past five years have seen increased private sector participation in the press sector, but many of the private papers are not financially strong.

The largest group of publications is the national weeklies.

The panoply of challenges facing Ethiopia and its people show no sign of respite. Though active hostilities in the northern part of the country, have almost stopped after the forces of Tigray People’s Liberation Front (TPLF) were pushed back to Tigray from most of the territories they had captured in the adjoining Amhara and Afar regions, the security situation in a number of areas of the nation is fragile owing to the interminable endless cycle of violence that has been racking them for years now. Aside from the death of tens of thousands and the displacement of millions frequent outbreaks of internecine conflicts have led to, the unchecked rise in extremist attitudes, the cost of living, corruption, and land grabbing, among others, have made life an ordeal for the vast majority of Ethiopians. It’s in this backdrop that an incident, whose fallout could potentially plunge Ethiopia into a crisis of catastrophic proportions, recently took place.

On March 29 at least 26 people were killed and several more injured in clashes between armed groups hailing from the Minjar Shenkora Woreda of North Shewa Zone, Amhara regional state, and local militia in the bordering Fentalle woreda, East Shewa Zone of Oromia regional state. The blame game began soon thereafter with both sides issuing conflicting a slew of contradicting statements regarding the incident. Amhara region officials lay the blame on “anti-peace groups” whom they accused of perpetrating the attack. Their counterparts from the Oromia region though disputed the accusation, blaming the attack on “extremist forces operating in the Amhara region”. They also took these forces to task for displacing people and looting property in other woredas of Oromia bordering the Amhara region. It’s surprising that both the federal government and the ruling Prosperity Party (PP) have not made any overt attempt to defuse the tension between the Amhara and Oromia regional administrations even as both escalate the war of words among them.

Ethiopia is a nation that continues to be on the wrong side of the global digital divide. Only a fifth of its over 110 million people have Internet access that is expensive and often unreliable. In cognizance of the imperative to tackle the multi-faceted challenges this poses the government has embarked on liberalizing the telecom sector and adopted Digital Ethiopia 2025— a digital transformation strategy described by the government as a visionary strategy that serves as a blueprint for different sectors and institutions—as it tries to position the country competitive in the brave new digital world. Efforts to open up the telecom industry have had limited success with one international consortium awarded a license to operate telecom services in the country so far while plans to sell 45 percent of the state-owned telecoms monopoly to international buyers have been repeatedly pushed back. Meanwhile, a number of public services have begun to benefit from Digital 2025 through developments like e-government, digital ID, the national payment system, online trade registration and licensing system, electronic single-window customs clearance and electronic tax filing.

As the government ramps up its roll out of various services aligned with the digital transformation strategy, the suspension by the National Bank of Ethiopia (NBE) of digital remittance platforms, namely CashGo and MamaPay, the Bank of Abyssinia (BoA) uses has caused a furore, leading many to question whether the central bank is on the same page as the government in the latter’s quest to create an inclusive digital economy through the national digital strategy. CashGo is an international money transfer system which allows anyone abroad to transfer funds in the local currency to accounts maintained at BoA while MamaPays allows users to request payment from remitters or payment to be settled on behalf of a third party. The reasons cited by NBE to justify its decision are varied. It says both BoA and the developers of the applications behind the platforms do not possess a valid license permitting them to provide remittance services. It also alleges that the applications enable BoA to avail travelers foreign exchange through credit cards in disregard of its regulatory mandate over currency management. The regulator further raised the need to address safety and security concerns, particularly relating to privacy breaches, and ensure that local fintech companies survive the inevitable competition from foreign rivals via a major initiative currently in the works.

The developers of the applications, however, refute the points mentioned by the central bank. They argue that they are authorized fintech companies engaged in developing applications and as such do not require to have a remittance license, adding the applications were vetted by the NBE and the Information Network Security Agency before they were integrated into BoA’s system. They also suspect that foul play may be involved, saying some of the remittance companies active in the Ethiopian market probably conspired with regulators at NBE to close them down because the country would save up to USD 800 million it annually lost to them through steep service charges and redirection of the forex they receive to informal channels. Moreover, they point out that NBE’s compliance and safety concerns could have been worked out while the applications were still running.

While NBE may have grounds it deems legitimate and warrants the suspension of the operation of the digital remittance platforms, its decision is heavy-handed and lacks foresight. In the first place, it did not hold formal consultations on the matter with all the stakeholders involved. If it had demonstrated the willingness to engage them constructively, the dispute between the parties could have been amicably solved. The decision also discourages fintech companies from investing in the development of platforms that help Ethiopia bridge the digital divide. The Digital 2025 strategy aspires to transform Ethiopia’s digital landscape to accomplish such lofty goals as playing a vital role for inclusive prosperity; innovating and applying the culture, practices, processes and technologies of the digital era to respond to citizens raised expectations. The realization of the strategy requires, among others, the collaboration and commitment of everyone including government, non-governmental, development partners and societies as well as a robust commitment to increase infrastructure and put in place an enabling ecosystem. If the government is to succeed in pushing the country through digitalization and making it a viable investment depends on its dedication to reforming the bureaucracy, implementing the right regulation and creating credible institutions. As Prime Minister Abiy Ahmed (PhD) once said leveraging digital opportunities demands a new mindset and leadership style. Leaders at the central bank must take this advice to heart and adapt to the new digital environment.

The feuding between officials heading two branches of the ruling party cannot be confined to them given the party is still ethno-centric despite claiming to be a national party. In fact it has led to spats among major opposition parties active in the respective regions and social media activists, which are spewing a hateful rhetoric that could very well pit the Oromo and Amhara people, the two largest ethnic groups in Ethiopia, in a bloody conflict. The consequences of such a conflict are too horrible to contemplate. From a protracted and destructive civil war in which no side emerges victorious to a total state collapse all the scenarios facing the nation are lose-lose not only for its citizens, but also the Horn of Africa and beyond. It’s not entirely clear whether the protagonists to the ongoing verbal warfare realize that their actions are liable to lead to Ethiopia’s unraveling or are indifferent to the ensuing heavy price.

With three decades of experience in the banking industry, Mulugeta Asmare is known for his successful years at the Bank of Abyssinia. During his five year tenure as the president of the Bank until 2019, the Bank’s profit doubled to over half a billion birr, while its paid-up capital skyrocketed from a little less than one billion birr to 2.5 billion birr.

Last year, he was appointed as the president of Goh Bank, the first self-proclaimed mortgage bank in Ethiopia. The Reporter’s Selamawit Mengesha sat down with Mulugeta to learn about his new journey at Goh and his insights in the banking industry. Excerpts:

The Reporter: Tell us about your experience in the banking industry.

Mulugeta Asmare: I have been working in the bank industry for the past 31 years. I have an all-round experience in the banking industry, meaning I had started work in the banking sector as a clerk and have now reached the position of general manager. I have worked as deputy president of Abyssinia Bank for four years-and-a-half until 2019. I believe that I was able to make a lot of reforms and changes while working at Abyssinia Bank. I was faced with a lot of challenges while working at this bank, since it had a lot of shortcomings at the time.

I believe that I have contributed a lot towards the betterment of the banking system at Abyssinia Bank, for it to get to the stage that it is in now. We started off by inviting global market leaders like Deloitte, PWC, KPMG, and Ernest & Young to participate in a bid to frame a five-year strategy for the bank. Winning the bid, Ernest & Young have done a remarkable job in improving our system-wide operations. We used to have such work done by in-house experts. So, this is the first time that we enlisted the services of a globally renowned company. We have focused on manpower development and raising pay, measures that have surely contributed to the development of the bank.

Following my previous stint with Abyssinia Bank, I used to focus on private contractual jobs here and there. I was informed of this new concept of establishing a mortgage bank system which was unique and different, and it got my attention. After establishing the bank and selling the shares and raising enough capital to establish the bank, we couldn’t find the right person to run it. The 11 founding members are well-known business professionals that have worked for years in the banking system, and they wanted me to take the role. I couldn’t say no to such noted personalities as former National Bank President Getahun Nana.

Before delving into the mortgage bank, I would like to raise a question regarding saving. Most people open bank accounts for saving purposes while few dare to ask for loans. Why do you think that is the case?

The major mission of a bank is to help develop the culture of saving. It is evident that once there is a saving, the next step is to provide a loan. Without savings, there are no loans. Customers can resort to saving for they have some future plans to invest or to purchase something, or it can just be a leftover from their monthly expenses. This saving is directly forwarded to producers and service providers who are planning to expand a business, or who are looking forward to enter into new business ventures. The main job of a bank is to act as an intermediary between the depositor and the borrower.

Banks have advanced and sophisticated role nowadays compared to the old times. I believe that low-scale savings at the banks is the main reason for the small number of loans. The loans are mostly provided to customers that have a convincing project idea with a guaranteed profit. You don’t find such projects every day, not everyone can be a producer, a service provider or a farmer. Banks have a limited access to capital and deposit, which is the reason for setting strict criteria. These are some of the reasons for having more savings while there are less loans being provided.

The last three years have seen a remarkable change in the banking sector. The number of private banks has increased to 23, including Goh Betoch Bank, which is managed by you, and an interesting enterprise at that. Why do you think private banks are increasing at such a pace? Is it because the banking industry is profitable?

It is obvious that the banking industry is becoming more profitable today than ever. All banks are recording a profit since the market demands such service. Even though our economy is underdeveloped, the banking sector is essential to reach the population that is not getting access to the service. Until recently, only 25 percent of the population was banked. But that is changing thanks to the increasing number of banks and the opening of branches in the regions. This shows that the market is still untapped. That being said, the capital requirement to establish a bank is also increasing drastically. The set of criteria laid down by the National Bank is complex. Therefore, I don’t believe that we have banks mushrooming left and right. For a population of 110 million, the number of banks we have is far from enough. I think the main challenge for potential new banks forming is the rules set by the central bank. Allowing specialized banks to open branches in the country is not yet a trend but it’s a must. We have paved the way as a mortgage bank but there can be many others that specialize in farming, industry, housing, import and export, etc.

Goh Bank specializes in the housing sector. I’m sure you’ve conducted a thorough research before establishing the bank, including the case of the then Construction and Business Bank. What is the sustainability plan?

The Construction and Business Bank has its own flaws. During the reign of the Derg, it was taken over by the government and it was functioning under the name of Housing and Savings Bank, the only service provider specializing in mortgage banking. It was later on transformed into a commercial banking system and was named as “Construction and Business Bank.” Keep in mind that both the Constriction and Business Bank and Commercial Bank were providing the same traditional banking service under a different name. The bank didn’t have enough capital. Therefore, it has struggled to keep in the same pace as private banks. The Construction and Business Bank later on merged with the Commercial Bank since it couldn’t stand on its own. This has caused a gap in the mortgage banking system. It provides a service that is in high demand. That is the main reason for establishing the Goh Betoch Bank with a view to addressing the problem. A lot of customers have savings in their account that is not enough to purchase a house without bank financing. These people can opt to switch funds used to rent a house in favor of mortgage payments.

Does the bank provide mortgage service or does it focus on commercial services?

The bank purely provides mortgage services. It is also registered with the national bank as a provider of mortgage services. We are the first bank in Ethiopia to offer this service. We have done rigorous feasibility studies. We haven’t provided any commercial loans to businesses. We only give loans to customers who want to buy a house.

Is there a push from the government to make the service partially commercial?

Actually, we are the ones pushing. That is since the country doesn’t have laws regulating such a specialized banking system. According to the law in the books, all banks are treated equally, be they private or government. But we are demanding a special treatment, and the national bank has lately been cognizant of this fact.

Do you cater to folks lower in the socio-economic ladder, and can you also reflect on the high cost of housing in Ethiopia?

It would take days to discuss issues regarding housing. In Ethiopia, there are many programs that were drafted in order to provide solution to these problems. For instance, the Integrated Housing Development Program was developed by the government in 1997. This condominium-housing project was later on developed into the ‘40/60’ housing. The idea was to construct a lot of housing units and help the general public own their house. A mere 400,000 housing units have so far been built. Many Ethiopians have been into the culture of housing saving schemes for years now. There is a study indicating that 400,000 housing units needed to be built every year in order to meet demand in Ethiopia. Specifically, 100,000 housing units should be constructed in Addis Ababa every year, but a tenth of that is being accomplished.

What is more, the already existing houses in Ethiopia do not meet habitat standards established by the United Nations. Based on this requirement, around 74 percent of the housing units in Addis Ababa need to be reconstructed since they do not meet the standard. The main reason for the soaring price of houses is the ever rising cost of land as well as construction materials. The paucity of hard currency coupled with unbridled inflation has worsened the situation. The current going rate for a housing unit is beyond the reach of middle and lower income citizens.

According to our study, medium income is 30,000 and up, way below the threshold to afford buying a new house. We should also look into our construction system that is backward and traditional. It takes two to three years to build a house. Time is essential; we should be able to construct houses in one year. If we want housing to be affordable, we should look into ways of cutting down the price of land and construction inputs as well as employing modern technology. Financing should also be factored in, and this is where we come in.

Apart from huge outlays by private banks, the government is also spending 50 to 60 million birr to construct condominiums. These houses are designed to be affordable to low-income people, but that’s not the case. How does your bank intend to make housing affordable to middle- or low-income citizens?

The housing problem can’t be solved only by private banks. The main role should be played by the government since having shelter is a human right. The government being a responsible body should provide land at a lower price or for free to the lower and medium income people. What’s more, the government should regulate the price of construction materials besides encouraging their ample supply. Banks as financers should also expedite provision of capital in the form of loans.

Most banks are reluctant to engage in mortgage banking. How come you chose it?

We dared to join the banking sector, especially mortgage financing, because of the need for one on the market. Our shareholders took the initiative to establish a huge institution that can support the country’s economy. The realty on the ground in Ethiopia is such that a 40-year-old individual lives with his or her parents. This is so due to the dearth of financing schemes to own one’s house. Therefore, we are trying to help individuals with limited means.

What is the plan this year as regards providing mortgage loans for customers?

We have started business since October 25. We haven’t provided much service because we just launched our bank a few months ago. But we are planning to provide one billion birr in loans until the end of the year. Based on the outlook of the economy, this might not be attainable, but that’s the plan.

How much would that be per client?

It depends on the customer. Some might take a 10 million-birr loan while others ask for more. Anyways, we are planning to provide 1 billion birr in loans until the end of this year. While framing this plan, we were under the impression that we can go around the country and find deposits, but there were many unforeseen events such as the war that disrupted the economy. Therefore, we might not be able to meet the target.

So there is no plan to provide this service to other regions?

We will cover other regions as well. We might not have many branches like other banks but being a mortgage bank, we are going to employ technology to scale up services. The main branch is in Addis Ababa while the second branch is in Dire Dawa and the third branch is around Lebu. The fourth branch in the CMC area goes online this month. We serve cities that have a high housing demand such as Hawassa, Adama, Bahir Dar,Gonder and Mekelle.

What do you think of foreign banks establishing mortgage banks in Ethiopia? How would they affect the already existing mortgage market?

Although I’m aware that foreign banks are joining, the timeline is not yet announced. A healthy competition is not bad; I don’t believe that they will take over the banking business instantly. The government will surely have some sort of plan in order to institute a gradual change. Some requirements might also be in order such as a fixed amount of capital. They should purchase shares to be able to establish a bank in Ethiopia. For instance, if a foreign bank buys 30 to 40 percent share from a private bank, then it will be perfect since they can invest in human-resource development and bring in capital for the existing bank.

Mortgage bank is no different from other private banks; I believe that foreign banks can help a lot since there is an untapped market. We can assist them in expediting the process of setting up shop. If foreign banks buy shares from us, then they can avoid that hustle. We would like the competition, although we are not sure when they can come to the market; we are preparing psychologically to work with them.

Can you briefly explain what it takes to get mortgage?

Those who seek loan at our bank, we welcome them all. We have started giving service for most customers now. It is required for the customer to save a minimum of 20 percent of the selling price of the house at our bank. And then, we can provide the remainder 80 percent. The other unique system is that we will provide 30 years grace period for paying the loan back to the bank. Our interest rate is lower than other banks’. For instance, Commercial Bank provides loans at 15 to 26 percent rate while we can provide loans for less. Our interest rate is flexible depending on the currency and frequency that a customer would return the loan. This makes us unique.

Customers can’t knock on any private bank and ask for a loan to purchase a house. Most banks provide a mortgage service to their employees, or for selected VIP customers that pay in foreign currency such as embassies, NGOs and exporting companies. We only require that a customer has a fixed monthly salary and that he or she can pay the loan back at the provided timeline. There’s also no need for any collateral since we use the house that will be purchased as collateral by itself. We are trying to reach the public with this information to mitigate the housing problem.

Since the public is very eager to get this service, what can we expect from your bank?

We would like to pass the message that any customer that has the financial means and the interest to purchase or construct a house, we are eager to help. Come to our bank, open a bank account and save the minimum amount of money required for purchasing the house that you want to have. We will advise you on the best option. We are also planning to construct houses by ourselves.

With three decades of experience in the banking industry, Mulugeta Asmare is known for his successful years at the Bank of Abyssinia. During his five year tenure as the president of the Bank until 2019, the Bank’s profit doubled to over half a billion birr, while its paid-up capital skyrocketed from a little less than one billion birr to 2.5 billion birr.

Last year, he was appointed as the president of Goh Bank, the first self-proclaimed mortgage bank in Ethiopia. The Reporter’s Selamawit Mengesha sat down with Mulugeta to learn about his new journey at Goh and his insights in the banking industry. Excerpts:

The Reporter: Tell us about your experience in the banking industry.

Mulugeta Asmare: I have been working in the bank industry for the past 31 years. I have an all-round experience in the banking industry, meaning I had started work in the banking sector as a clerk and have now reached the position of general manager. I have worked as deputy president of Abyssinia Bank for four years-and-a-half until 2019. I believe that I was able to make a lot of reforms and changes while working at Abyssinia Bank. I was faced with a lot of challenges while working at this bank, since it had a lot of shortcomings at the time.

I believe that I have contributed a lot towards the betterment of the banking system at Abyssinia Bank, for it to get to the stage that it is in now. We started off by inviting global market leaders like Deloitte, PWC, KPMG, and Ernest & Young to participate in a bid to frame a five-year strategy for the bank. Winning the bid, Ernest & Young have done a remarkable job in improving our system-wide operations. We used to have such work done by in-house experts. So, this is the first time that we enlisted the services of a globally renowned company. We have focused on manpower development and raising pay, measures that have surely contributed to the development of the bank.

Following my previous stint with Abyssinia Bank, I used to focus on private contractual jobs here and there. I was informed of this new concept of establishing a mortgage bank system which was unique and different, and it got my attention. After establishing the bank and selling the shares and raising enough capital to establish the bank, we couldn’t find the right person to run it. The 11 founding members are well-known business professionals that have worked for years in the banking system, and they wanted me to take the role. I couldn’t say no to such noted personalities as former National Bank President Getahun Nana.

Before delving into the mortgage bank, I would like to raise a question regarding saving. Most people open bank accounts for saving purposes while few dare to ask for loans. Why do you think that is the case?

The major mission of a bank is to help develop the culture of saving. It is evident that once there is a saving, the next step is to provide a loan. Without savings, there are no loans. Customers can resort to saving for they have some future plans to invest or to purchase something, or it can just be a leftover from their monthly expenses. This saving is directly forwarded to producers and service providers who are planning to expand a business, or who are looking forward to enter into new business ventures. The main job of a bank is to act as an intermediary between the depositor and the borrower.

Banks have advanced and sophisticated role nowadays compared to the old times. I believe that low-scale savings at the banks is the main reason for the small number of loans. The loans are mostly provided to customers that have a convincing project idea with a guaranteed profit. You don’t find such projects every day, not everyone can be a producer, a service provider or a farmer. Banks have a limited access to capital and deposit, which is the reason for setting strict criteria. These are some of the reasons for having more savings while there are less loans being provided.

The last three years have seen a remarkable change in the banking sector. The number of private banks has increased to 23, including Goh Betoch Bank, which is managed by you, and an interesting enterprise at that. Why do you think private banks are increasing at such a pace? Is it because the banking industry is profitable?

It is obvious that the banking industry is becoming more profitable today than ever. All banks are recording a profit since the market demands such service. Even though our economy is underdeveloped, the banking sector is essential to reach the population that is not getting access to the service. Until recently, only 25 percent of the population was banked. But that is changing thanks to the increasing number of banks and the opening of branches in the regions. This shows that the market is still untapped. That being said, the capital requirement to establish a bank is also increasing drastically. The set of criteria laid down by the National Bank is complex. Therefore, I don’t believe that we have banks mushrooming left and right. For a population of 110 million, the number of banks we have is far from enough. I think the main challenge for potential new banks forming is the rules set by the central bank. Allowing specialized banks to open branches in the country is not yet a trend but it’s a must. We have paved the way as a mortgage bank but there can be many others that specialize in farming, industry, housing, import and export, etc.

Goh Bank specializes in the housing sector. I’m sure you’ve conducted a thorough research before establishing the bank, including the case of the then Construction and Business Bank. What is the sustainability plan?

The Construction and Business Bank has its own flaws. During the reign of the Derg, it was taken over by the government and it was functioning under the name of Housing and Savings Bank, the only service provider specializing in mortgage banking. It was later on transformed into a commercial banking system and was named as “Construction and Business Bank.” Keep in mind that both the Constriction and Business Bank and Commercial Bank were providing the same traditional banking service under a different name. The bank didn’t have enough capital. Therefore, it has struggled to keep in the same pace as private banks. The Construction and Business Bank later on merged with the Commercial Bank since it couldn’t stand on its own. This has caused a gap in the mortgage banking system. It provides a service that is in high demand. That is the main reason for establishing the Goh Betoch Bank with a view to addressing the problem. A lot of customers have savings in their account that is not enough to purchase a house without bank financing. These people can opt to switch funds used to rent a house in favor of mortgage payments.

Does the bank provide mortgage service or does it focus on commercial services?

The bank purely provides mortgage services. It is also registered with the national bank as a provider of mortgage services. We are the first bank in Ethiopia to offer this service. We have done rigorous feasibility studies. We haven’t provided any commercial loans to businesses. We only give loans to customers who want to buy a house.

Is there a push from the government to make the service partially commercial?

Actually, we are the ones pushing. That is since the country doesn’t have laws regulating such a specialized banking system. According to the law in the books, all banks are treated equally, be they private or government. But we are demanding a special treatment, and the national bank has lately been cognizant of this fact.

Do you cater to folks lower in the socio-economic ladder, and can you also reflect on the high cost of housing in Ethiopia?

It would take days to discuss issues regarding housing. In Ethiopia, there are many programs that were drafted in order to provide solution to these problems. For instance, the Integrated Housing Development Program was developed by the government in 1997. This condominium-housing project was later on developed into the ‘40/60’ housing. The idea was to construct a lot of housing units and help the general public own their house. A mere 400,000 housing units have so far been built. Many Ethiopians have been into the culture of housing saving schemes for years now. There is a study indicating that 400,000 housing units needed to be built every year in order to meet demand in Ethiopia. Specifically, 100,000 housing units should be constructed in Addis Ababa every year, but a tenth of that is being accomplished.

What is more, the already existing houses in Ethiopia do not meet habitat standards established by the United Nations. Based on this requirement, around 74 percent of the housing units in Addis Ababa need to be reconstructed since they do not meet the standard. The main reason for the soaring price of houses is the ever rising cost of land as well as construction materials. The paucity of hard currency coupled with unbridled inflation has worsened the situation. The current going rate for a housing unit is beyond the reach of middle and lower income citizens.

According to our study, medium income is 30,000 and up, way below the threshold to afford buying a new house. We should also look into our construction system that is backward and traditional. It takes two to three years to build a house. Time is essential; we should be able to construct houses in one year. If we want housing to be affordable, we should look into ways of cutting down the price of land and construction inputs as well as employing modern technology. Financing should also be factored in, and this is where we come in.

Apart from huge outlays by private banks, the government is also spending 50 to 60 million birr to construct condominiums. These houses are designed to be affordable to low-income people, but that’s not the case. How does your bank intend to make housing affordable to middle- or low-income citizens?

The housing problem can’t be solved only by private banks. The main role should be played by the government since having shelter is a human right. The government being a responsible body should provide land at a lower price or for free to the lower and medium income people. What’s more, the government should regulate the price of construction materials besides encouraging their ample supply. Banks as financers should also expedite provision of capital in the form of loans.

Most banks are reluctant to engage in mortgage banking. How come you chose it?

We dared to join the banking sector, especially mortgage financing, because of the need for one on the market. Our shareholders took the initiative to establish a huge institution that can support the country’s economy. The realty on the ground in Ethiopia is such that a 40-year-old individual lives with his or her parents. This is so due to the dearth of financing schemes to own one’s house. Therefore, we are trying to help individuals with limited means.

What is the plan this year as regards providing mortgage loans for customers?

We have started business since October 25. We haven’t provided much service because we just launched our bank a few months ago. But we are planning to provide one billion birr in loans until the end of the year. Based on the outlook of the economy, this might not be attainable, but that’s the plan.

How much would that be per client?

It depends on the customer. Some might take a 10 million-birr loan while others ask for more. Anyways, we are planning to provide 1 billion birr in loans until the end of this year. While framing this plan, we were under the impression that we can go around the country and find deposits, but there were many unforeseen events such as the war that disrupted the economy. Therefore, we might not be able to meet the target.

So there is no plan to provide this service to other regions?

We will cover other regions as well. We might not have many branches like other banks but being a mortgage bank, we are going to employ technology to scale up services. The main branch is in Addis Ababa while the second branch is in Dire Dawa and the third branch is around Lebu. The fourth branch in the CMC area goes online this month. We serve cities that have a high housing demand such as Hawassa, Adama, Bahir Dar,Gonder and Mekelle.

What do you think of foreign banks establishing mortgage banks in Ethiopia? How would they affect the already existing mortgage market?

Although I’m aware that foreign banks are joining, the timeline is not yet announced. A healthy competition is not bad; I don’t believe that they will take over the banking business instantly. The government will surely have some sort of plan in order to institute a gradual change. Some requirements might also be in order such as a fixed amount of capital. They should purchase shares to be able to establish a bank in Ethiopia. For instance, if a foreign bank buys 30 to 40 percent share from a private bank, then it will be perfect since they can invest in human-resource development and bring in capital for the existing bank.

Mortgage bank is no different from other private banks; I believe that foreign banks can help a lot since there is an untapped market. We can assist them in expediting the process of setting up shop. If foreign banks buy shares from us, then they can avoid that hustle. We would like the competition, although we are not sure when they can come to the market; we are preparing psychologically to work with them.

Can you briefly explain what it takes to get mortgage?

Those who seek loan at our bank, we welcome them all. We have started giving service for most customers now. It is required for the customer to save a minimum of 20 percent of the selling price of the house at our bank. And then, we can provide the remainder 80 percent. The other unique system is that we will provide 30 years grace period for paying the loan back to the bank. Our interest rate is lower than other banks’. For instance, Commercial Bank provides loans at 15 to 26 percent rate while we can provide loans for less. Our interest rate is flexible depending on the currency and frequency that a customer would return the loan. This makes us unique.

Customers can’t knock on any private bank and ask for a loan to purchase a house. Most banks provide a mortgage service to their employees, or for selected VIP customers that pay in foreign currency such as embassies, NGOs and exporting companies. We only require that a customer has a fixed monthly salary and that he or she can pay the loan back at the provided timeline. There’s also no need for any collateral since we use the house that will be purchased as collateral by itself. We are trying to reach the public with this information to mitigate the housing problem.

Since the public is very eager to get this service, what can we expect from your bank?

We would like to pass the message that any customer that has the financial means and the interest to purchase or construct a house, we are eager to help. Come to our bank, open a bank account and save the minimum amount of money required for purchasing the house that you want to have. We will advise you on the best option. We are also planning to construct houses by ourselves.

Shewit Emanuel is the current country director of Farm Africa, an international NGO established 35 years ago. It started out in Kenya but has branched out to Ethiopia, Uganda, Tanzania and the DRC.

Active in majority of eastern African countries, it is a specialized NGO focusing on natural resource management and business development linked to agriculture including livestock. Yosthena Aynalem of The Reporter sat down with Shewit to discuss smart agriculture in Ethiopia. Excerpts:

The Reporter: In a country where agriculture dominates, what would you say you have achieved thus far?

Shewit Emanuel: In a nutshell, one of the biggest achievements so far is that we exclusively work with smallholder farmers. What we are trying to do is to ultimately enable them to move out from poverty and become a commercial farmer who is self-sufficient.

Developing methodologies that are sustainable, inclusive and impactful is also one of our achievements. That’s our own target at the end of the day, when we leave, we want to make sure the work continues and the farmers continue to thrive with the support that we have started.

We operate all over Ethiopia. Unfortunately, some of the projects have ended in some regions, but we have footprints across all the regions within Ethiopia. The biggest achievement starts from increasing the income of the smallholder farmers we supported to reducing deforestation as well as supporting Ethiopia sell carbon credit to the international market. That is actually the newest achievement. We have also supported farmers to sell coffee directly to international markets.

Since vertical intégration is allowed now, farmers don’t have to go to the Ethiopian Ccommodities Exchange (ECX) anymore. If you can connect them with exporters, they can directly sell to the international market. The whole point is to reduce the middle men for the farmers and get the fairest prices for them.

Food insecurity is a recurring problem in Ethiopia and Africa. Many approaches have been applied to reduce food insecurity but nothing seems to avert it thus far. Is there any approach you have tried that is poised to be successful?

Nowadays, everybody’s moving into climate smart agriculture and unless all your interventions are becoming climate smart, you are bound to go back to that vicious cycle of droughts and flooding; which is both damaging to farmers. So, making sure farmers practice climate smart agriculture is the number one thing that we are working on.

One of the things that Farm Africa is actually pioneering and becoming innovative and a champion of is the use of integrated landscape management. This means to look at the challenge holistically, you cannot talk about conservation of land without talking about the livelihood of the people.

The majority of past projects, if you look at them, are about conservation without addressing why the community is damaging the environment? Unless you tackle that, you are not going to sustain it and all your efforts will be for nothing.

It also has to be inclusive of everybody. Most of the time, when a project starts, they focus on the direct beneficiaries. Let me give you a good example. One of our biggest projects is in Bale Eco region, where we’ve been operating since 2016. Initially, we were focusing on the regions communities and when the current drought occurred, the lowland communities came looking for water and resources towards the forest. So, all the conservation that we made, all the protection of the forest become under threat.

So, what we tried to do is expand our support, with the support from the Norwegians and other likeminded donors. It is not just the highland communities, but the lowlands are also included now. We have somewhat built resilience so that they don’t have to come to the forest.

And to be fair, even though 1.6 million people live within Bale, as direct beneficiaries, 12 million people depend directly on the forest. So, to address their need, everything from livestock fodder and irrigation is being provided, moving them into climate smart agriculture to become sustainable. They then become the protectors of the forest themselves, becoming part of the solution.

The approach we advocate for is an integrated landscape management where you can make your intervention impactful, sustainable and more importantly, inclusive of everybody, including women, pastoralists and nomads.

Does Farm Africa give lessons to these people or just resources?

Not exactly. When I say climate smart agriculture, there are different kinds of approaches that we use. Starting from the training itself such as when to plant, how to plant and what type to plant, and everything that has to do with linking farmers is included.

It could be providing improved seeds or making sure that they move to organic fertilizers or connect them to the local market. The majority of farmers’ problem is linkage; they just need to be connected with the agro-dealers so they can get the seed, fertilizers, and safe deliver of their harvests to the market. And once they produce, they can aggregate it and sell it at a good price.

We also support the enabling environment, which means working with the government to make sure that the necessary policies and protection are there. At the end of the day, we need to build the capacity of the government. They are the ones we are making sure we align with, since they will take it forward. We can show it on a small scale for the government to expand it at a larger scale.

The climate smart market systems project in Amhara region that we piloted, is now being rolled out to all over Ethiopia, modified depending on the region and soil conditions. The value chain may be different, but in terms of supporting the full spectrum of the value chain, that’s what we do, so that farmers have the right tools and information on a timely basis.

Urban farming is something that is said will reduce food insecurity and that you are doing something along those lines. Can you tell me more about those projects?

Sure. When Farm Africa was actually set up, our attention was exclusively focused on rural farmers, but what has become very clear is that you cannot address the rural challenges if you are not addressing urban challenges.

Urban poverty is on the rise and food insecurity is becoming as critical as those in rural areas.

The government requested us to support them on how to improve urban agriculture. With that, we started to pilot a project in the Ministery of Planning and Development’s compound because they have the space. We have started testing out the pilot phase, trying to look at what urban agriculture looks like, if it is sustainable, and how the farming methodology works.

We are now actually setting up; the clearing has been done and the design has been finalized. We are left with the planting processes, and we hope in the next couple of months to have the first produce available. It’s not just crops we are producing. We are also piloting fish as well as poultry so that everybody can practice it.

If you were to go to rural areas, there is space, you can do horizontal farming, but in urban areas, we don’t have that space. However, vertical agriculture is the answer. We are coming up with new kinds of innovative ways to produce food at a scale that is required to feed the local community. We are working with around 105 households for now, including women and unemployed youth. We just started that this year. So, it’s still at the early stages.

So what can urban settlers do? Like you said, these projects will encourage them, but considering there’s inflation now, there’s even more food insecurity, which is compounded by the war.

That’s why we encourage the use of your back backyard or whatever space you have. It does not require space. What we are trying to show is that you can do this vertical farming. Within a limited space, you can actually produce enough, to feed your family at a lower cost because inflation is becoming an issue. Families are barely feeding themselves, so at least it supplements their food intake and more importantly ensures nutritional balance.

Scholars suggest encouraging farmers to diversify their source of income to fight food insecurity. One of the options is to promote off-farming activities. Is that being implemented? If so, is it working?

Unfortunately, this concerns the lack of knowledge. The diversity is not as much as you would expect it to be. As part of the business development, we exclusively focus on income generating activities that you can do beyond agriculture. You need to diversify.

The coffee producers used to only produce coffee and farm forests. So, instead of farming the forest and cutting down trees, we showed them they can do forest honey, forest coffee, incense and other products, helping them to diversify their income stream.

A lot of the evaluation reports can be shared on, for instance, income. We increased their income by 143 percent. Not only were they able to increase the volume but also the quality. Now, almost all our projects, be it in Bale or Illu Aba Bora, all of them are now 100 percent export quality standard. And by supporting them change into a cooperative, they could buy better machines and so on, to aid in the quality of the product, instead of using traditional means and do less damage to the product. The coffee they produce now has scaled from grade six to grade one.

But you need to provide them the option and training, ranging from the know-how, all the way to even financial literacy. We do a lot of voluntary saving and loans, by setting them up with associations so that they are able to save money and get loans to buy better inputs and be able to negotiate better with dealers.

Ethiopia has been hit by a drought recently and many cattle have died as a result. There are other east African countries going through the same thing, probably in countries Farm Africa is involved in. So why do you think countries like Ethiopia are being affected by these things more often than the rest of the world?

Unfortunately, we are still rainfall dependent and one of the biggest impacts of climate change is making this cycle of drought more frequent than ever before. It used to occur every 10 years or so but now it happens every two or three years.

So, unless we equip both the highland and the lowlands with the necessary climate smart interventions, they will still suffer. We have a huge project in Borena and mobilized fodder to be delivered as an emergency, because the animals are crucial for their livelihoods. I think it was reported to cost more than five million birr.

The second one was to make sure the ecosystem is protected because that generates the water that goes to the lowlands. The intervention here has a huge impact at the lower catchments. That is why you need to make sure your interventions are holistic. Just by protecting the Bale eco region, you protect 12 million people’s livelihood, livestock and food.

The support is not only in providing materials, but to improve small–scale irrigation, pound point constructions and watershed management, to become drought resilient.

Several projects have been implemented by donors and other NGOs that work on resilience, capacity building and the like. But soon after their launch and brief success, they dwindle out. What do you think is happening in the middle? Why does the impact subside quickly?

The problem lies in the projects design. You have to plan to make it sustainable. When we set up a project, we have to prioritize carefully. If you don’t do that, then what happens is you’ll just be replacing one challenge with another and the impact would be temporary.

Our intervention should be as a facilitator, not actors. If you become an actor, then you are disrupting the market. What we are trying to do is to become the catalytic process, by working clearly with the government, like the Ministry of Agriculture and other stakeholders, so that policies do not contradict.

When we set up the project initially, deforestation was very high. Awareness raising and capacity building campaigns were held not only with the government, but also the communities, on why they need the forest, and understanding why the forest was damaged was very critical.

By introducing a specific blend of coffee, which grows under a shade, to farmers, which fetches a higher market price, the community has started to protect the forest by themselves. By giving them ownership and accountability, when you leave, it will not stop.

That is why you have to be very careful and make sure you have addressed the challenges that surround it.

You mentioned traders usually get more money than farmers, and Farm Africa is doing things to help in this aspect. Could you elaborate more on that?

First, you have to improve their yield per hectare because they usually sell it to the local market due to the low yield of crops they harvest. So, increasing the yield per hectare and then the quality is crucial. Empowering and connecting them with the market also helps them know the market value of their products.

women are paid less in the coffee sector, even though they do just as much, if not more. Is there anything done to empower women into joining the sector?

We assessed where women were involved in the value chain of coffee. The majority of women were found at production sites, such as planting or coffee picking, but you see them less involved as you go higher in the value chain. That is why they earn less because they’re at the lower end of the value chain.

We are trying to build the capacity, knowledge and their participation at the higher end of the value chain and make sure they’re involved outside of the production itself. They must have the power and skills to take their matters to the union and get better prices. And in parallel, find them the necessary financing. That is why around 80 percent of our beneficiaries are woman.

Do you get resistance from the community while doing this?

Not so much. We undertook awareness raising campaigns before we started, to make sure they understand why not everybody had to be part of the growth, but nobody should be left behind at the end of the day either. That’s our principle.

Since the demand for coffee is so high, they don’t see it as competition, they just need more support. It is usually competition that makes you push each other a lot of the time, but now the demand is so much, especially for forest coffee, what’s available is not enough.

Unfortunately, the drought has affected us this season and the amount of coffee we are selling this year is going to be less than last year.

Is there any forecasts as to what the effects of the drought will look like in the coming few months?

No, we have not done that per say, but I know FAO is working around the forecast. We’re coordinating, collaborating and sharing our lessons, not just with likeminded NGOs, but with the government and donors, so that our aggregated knowledge can be able to solve the problem. We are also coordinating with the Disaster Risk Management Commission right now, chaired by the FAO.

Another major problem in Ethiopia’s farming sector is landlessness. Authorities would like to hear recommendations to avert problems arising due to landlessness. What would you like to recommend in this regard?

So, we are not going to solve the issue of land, but what we can do is to come up with ways that we can use the land efficiently and effectively. Once the farmers understand how to increase their yield per hectare, they can increase their labor input as well.

For example, when one of our coffee farmers started working with us, he could barely feed his kids or even send them to hospital. Now, from the coffee sales, he has not only generated substantial income, but has also diversified and is setting up stores in Bale. He also managed to employ 24 youth to help him in the coffee production.

So that’s how we address it by making sure you are climate smart and generating the number of jobs needed to absorb landless youth. Otherwise, you cannot solve the land issue, what you can do is only give access to it.

There are a lot of mechanisms you can do to address the issue. But from Farm Africa’s point of view, what we’re trying to do is to increase the yield per hectare and capabilities of farmers, so that they can hire more people.

From your experience, what has been the hardest thing to overcome in Ethiopia?

We haven’t been able to address or mitigate the impacts of climate change. For me, it’s always been three steps forward and three steps backwards, but we are going in the right direction. Until we address and minimize those impacts and make sure that the farmers move from rain–fed agriculture to a more sustainable climate smart agriculture, it will be difficult.

Access to information and inputs is crucial. We are doing a lot of studies on value chains, different crops and fruits and pulses, and are we disseminating enough information to everybody to make an informed decision, so that they can produce what the market wants.

If you go to speak to most of the farmers in rural areas, they produce using traditional practices. If they do not wait for rain anymore, then they can produce more harvest per year.

Does Farm Africa work on logistics as well?

No, not on logistics, but we try. What we are trying to do is to connect them with the dealers so they can come. The dealers will only come if they can find value. That is why we want to make sure the farmers are organized in cooperatives, so that when they come for the coffee, they can get 40 tons to 50 tons. The volume will make it interesting for the private sector. But, the private sector has to be part of the solution as well.

Do you have any comments regarding the crisis that is going on in the country right now and how it’s affecting the agricultural sector?

As an NGO, we are not allowed to talk about it. We are not allowed to talk about rights. But, Farm Africa is committed to support the reconciliation and recovery process. That’s where we can come in because we are not even a humanitarian organization. So, we can’t even support these kinds of interventions.

What we can do is once stability and security is established, we can quickly go in and support farmers to quickly recover and catch up with the coming harvest season. So, through the post conflict recovery, we have a lot we can contribute, but beyond that, not so much.

Is there anything you’d like to add that would help authorities, individuals or farmers?

Working with farmers is still the solution. They have the knowledge and know-how; you just have to be the catalyst to help them and enable them achieve their goals. We want to make sure the economy thrives.

We need to improve our productivity and production. Everyone including the government, NGOs, beneficiary communities themselves have a role to play to contribute to this. If we do that, we are able to not only feed our own society, but be able to export and help others.

Eskinder Nega is a household name in Ethiopia. Known for publishing newspapers with articles critical of the government, Eskinder has been in the media industry for over 25 years. In 2019, he established Balderas Political Party.

Though he lost the last election to the ruling party, he is still actively participating in political matters. He was among the people arrested in the aftermath of the killing of Hachalu Hundessa and was released a year and a half later on January 2022.

The Reporter’s Amanuel Yilkal and Samson Berhane sat down with Eskinder to understand his journey in the media industry and politics. Excerpts:

The Reporter: Let me take you back to the 90s when you started publishing Ethiopis after your return from the US. How were you attracted to the media world?

Eskinder Nega: I lived in the US for many years. When I returned to Ethiopia, the country was in the midst of changes. There were many magazines, while the only privately-owned newspaper was Eyita. The magazines were not assertive and they feared criticizing the government and its policies. They used to beat around the bush.

I was able to learn a lot from the media environment in the US, which is free to criticize the government without being censored. It is not because I am a daredevil (Jebdegna) as some see me but since I was aware of the media landscape in the US, I wanted to try a new thing.

Then I started publishing Ethiopis, a publication that was ardently challenging the ruling government back then. It continued till October 2006. Ever since I started publishing the paper, I was a target of the Tigray People Liberation Front (TPLF). I was in custody for over 10 years in the period of the TPLF-led government and another one and half years after the then Oromia People Democratic Party (OPDO) started to lead the country.

You were arrested for the first time due to a column dubbed “Fascism in Tigray” that appeared on Ethiopis.

“Facism in Tigray” appeared in the second edition of Ethiopis. The first edition’s cover story was the “killings at Sidst Kilo.” It was initiated after the death of students who opposed the secession of Eritrea from Ethiopia. It was a story that made officials angry. And when we published “fascism in Tigray” in the second edition, we became a target. May his soul rest in peace; Tesfaye Asmare was the Editor-in-Chief of the paper, while I was a publisher back then.

We did the “Fascism in Tigray” story because people in Tigray were not allowed to be a member of a party other than the TPLF back then. Those who did not become a member of the TPLF back then were not only being arrested but were also being isolated from Idir and other social institutions.

Many were isolated just because they didn’t want to be a member of TPLF. We opposed this in our article. The situation in Tigray was no different from totalitarianism, while what was happening in Addis was authoritarianism. The TPLF was controlling every step of the people in Tigray, where there was no freedom of press. In Addis, there was a freedom of press, though it was limited and was a show to create an image that the media landscape is improving after the fall of the Derg Regime.

You are saying the “Fascism in Tigray” column intended to voice the concerns of people in Tigray. However, this goes against what another newspaper of yours was publishing in a column dubbed “Wegid Yihuda”, authored by Tadios Tantu. Articles written under this column were for long criticized for belittling ethnic Tigrayan’s.

Whenever you criticize dictators, they always give you a name. When we were publishing Wegid Yihuda, there was always another article that argues against what was written in it. The column always revolved around the history of Ethiopia. It discusses about King Yohannes IV.

When the British Empire invaded Ethiopia, it was him who received their army at Hamassien. This led to the death of King Tewodros. Tadios Tantu argued this is a betrayal and TPLF is born from such a history.

Do you consider this story as a common history of Ethiopians? Or are you blaming one ethnic group for it?

When Yohannes IV allowed the British to enter Ethiopia, he was not alone. He was assisted by King Teklegiorgis (also known as Wagshum Gobeze) who allowed the British to go through his territory to Mekedella. All of these are a part of our history. Yet I believe we did not learn from it. That is why I allowed the column to be published.

However, I have not gone through each of the words of the articles appearing on Wegid Yihuda. At that time, I was editing stories appearing on three publications with a scarce resource and professionals. We used to call it guerrilla journalism. While fighting the government, we were facing critical shortage of resources. In the midst of such challenges, there were several points that were published, though they were not supposed to be printed.

However, the aim of the article was not to disparage the image of Tigrayans. I never have been an enemy to Tigrayans and I will never be. The same goes with Oromos, even though many accuse me of being an enemy to the Oromo people. We were accountable to the contents appearing on the newspaper. We may have made some mistakes.

I cannot say mistakes were never made when we were publishing articles under the column. I apologize if we made a mistake and for the error. Yet, one thing is for sure, it was never our intention to portray the people of Tigray as our enemy.

You have been given several awards while you were in the media sector. Many also say you have paid a big price for journalism, while some claim that you are an activist rather than a journalist. For you, what are the things you have contributed for the development of journalism in Ethiopia?

Journalism can only prevail in a country where democracy exists. When you try to practice pure journalism in an undemocratic state of affairs, you face several challenges. Undemocratic elements of state target you not because you do not follow the ethics of journalism; rather it is because they don’t want to accept the truth or the reality on the ground.

It is the lack of objectivity that strains your relationship with the government. It is because a dictatorial government doesn’t accept the ethics of journalism. Under such a state, you cannot practice your journalistic profession and when you fail to do so, what you do is fight for your rights. You will also be forced to be an activist, a reality that you must accept because of the situation on the ground. The press in Ethiopia passed through such challenges. Our first aim was to practice journalism.

However, in our second edition, after we published the “fascism in Tigray” story, I was arrested and tortured at Meakelawi Prison. Since then, I was fighting for my rights. On one hand, I was practicing journalism. On the other, I was practicing activism.

We were not able to bring the experiences of the west and practice it here. That happened because we were operating in an undemocratic state, while the opposite is true in the western countries. Of course, when we build a democratic state, it will be the right time to talk about journalism.

Why did you become a politician before exercising what you called “pure journalism?”

In 2006, the TPLF suspended licensing of media outlets. When we got out of prison in 2007, we were hoping everything would go back to what it was and we will be allowed to reopen our media houses.

However, the TPLF-led government refused to give us a license. I then decided to become a human rights activist. I was arrested again in 2012 and remained behind bars until 2018. I then started publishing Ethiopis.

Soon after, the issues of special interest on Addis Ababa became a public agenda. To respond to this, I became an advocate and founded a civil society organization. However, we were not able to get a political party that pushed for the implementation of what we were advocating as a CSO. That forced us to transform the CSO into a political party and I became a full-time politician afterwards.

When you founded the party, you were saying your goal was to fight for the rights of residents of Addis Ababa and even Balderas is registered as a regional party of the capital city.

However, after your release from prison recently, you claimed that your plan from the beginning was to establish a national party. Is that not contradictory?

The problem of Addis Ababa is an outcome of nation-wide problems. Addis Ababa is not facing a challenge of its own. Its current problems are born from a dictatorial form of government. When we founded the CSO, our aim was to avert problems faced by the city and its residents.

We were hopeful that EZEMA [Ethiopian Citizens for Social Justice] will achieve what we wanted for the city, but that failed to happen. When we were opposing against special interest of Oromia in Addis Ababa, we went to the public to sell our ideas. Beyond that, we picked EZEMA to make our objectives a reality.

EZEMA’s closeness to the ruling party did not comfort us. In fact, EZEMA was the flip side of the coin when it comes to the ruling party. As we were not able to get a replacement, the public started to ask how we are going to implement what we wanted at a policy level. As a response, we established the party. However, as there were only four months left for the election, there was no time to establish a national party. That is why we were limited to Addis Ababa.

But as I said earlier, the problems faced by Addis Ababa can only be solved if national problems are solved too.

As a party that claims to fight for the rights of the residents of Addis Ababa, for you, what are the major problems faced by the city’s residents.

Residents of Addis Ababa want to see a democratic Ethiopia, a country with no risk of disintegration. They want a united country. Secondly, what they want is a universal democracy.

It is not a system of government that we create together as the current Prime Minister does. They want a universal democracy that is being practiced in the US, West Europe, India, South Africa, Japan and many other countries. That is what Ethiopians want. It is no different for Addis Ababa, who has the same vision for their country as other Ethiopians do. There are many problems born from a dictatorial government. The issue of special interest in Addis Ababa is also an outcome of such a system.

As home to several ethnic groups, there is a need for the introduction of more working languages in Addis Ababa.

After Prime Minister Abiy Ahmed (PhD) came to power, a new policy has been put in place that aims to increase the working languages of the federal government to five.

That did not follow the right procedure. It needs a legal amendment. The law works for everyone. Especially the government, it has the responsibility to uphold the law. At the national level, we all agree on the need for more working languages.

However, in Addis Ababa, there is no need to add more working languages. Amharic is enough. I never heard the people of Addis Ababa demanding for more working languages.

But there are ethnic Oromos demanding for the addition of Afan Oromo as a working language of the capital, along with the Amharic language. Have you ever conducted a survey to reach to such a conclusion that there is no demand?

I never encountered such a claim. Let alone in Addis Ababa, there was no such a demand even in cities surrounding the capital. Even in rural parts of these cities, residents speak two local languages, including Amharic.

We have not conducted a study. But we did not come across such a demand. I will apologize if I encounter anyone asking for the introduction of more working languages.

Critics say your party focuses on fueling violence. Your party is present wherever there are protests or riots. And you are rarely seen coming up with policy recommendations and solutions for problems faced by citizens. How are you going to address this criticism?

Some say we focus on issues of little importance to the public. That comes from two directions. The first is a concern coming out of kindness. The second is an attempt to silence us. And it is also an action taken to imprison us again.

There are people who believe things that we are giving an emphasis, like demolition of houses, can be solved by taking administrative measures. We have to awaken the public by publicizing and following each problem. We want to make the public aware that a problem that compromises the existence of Ethiopia as a country is happening and they must debate on it.

Supporters of ethnic federalism argue that regions should continue to have the right to secede. However, you argue that secession should not be allowed. Is that not against democracy?

Take India as an example. It is a model of democracy. But it does not allow secession. See the case of Kashmir. The Muslim majority living in the city want to secede from India and be part of Pakistan. That was why they were fighting an armed struggle for the last 80 years. There are also Indian states that want to secede but the law of the country prohibits them from doing so. The same is true in other democratic states, including South Africa and Nigeria.

In Nigeria, the attempt to secede Biafra failed, while the country’s law bans any federal state from doing so. Yet this does not make Nigeria an undemocratic state. The issue of the Catalan’s is no different. The administrators of Catalonia held a referendum and declared independence from Spain. But where are they now? They are in exile in Belgium. So does that mean Spain is not a democratic country? No!

To ensure the existence of Ethiopia and avoid of the risk of disintegration, secession must be prohibited. It is not Balderas that came up with such a rule for the first time. It is based on the experience of many countries across the world.

Agriculture is still the main driver of the economy, whether we like it or not. And we have to make sure it contributes to the GDP as its intended. I think we just have to keep our eyes on the ball.

We have collaborated with other organizations in order to increase our capital as well. Upon our establishment, our bank had one billion and fifty six million birr. Next year, we are planning to raise two billion birr by selling two million shares. We will give first opportunity to buy shares to existing share-holders and then it will be open to the public. The government has set out a rule whereby private banks have to have seven billion birr in capital in the seven years. We have six years to raise the other five billion birr.

We have collaborated with other organizations in order to increase our capital as well. Upon our establishment, our bank had one billion and fifty six million birr. Next year, we are planning to raise two billion birr by selling two million shares. We will give first opportunity to buy shares to existing share-holders and then it will be open to the public. The government has set out a rule whereby private banks have to have seven billion birr in capital in the seven years. We have six years to raise the other five billion birr.

Ethiopians have demonstrated on ample occasions that they will never tolerate anyone bent on advancing their selfish political agendas by sowing instability and thereby jeopardize Ethiopia’s very survival. All political actors need to abide by the notion that each and everything they do must be guided by the vital interests of the country. They also ought to realize that Ethiopia is much more about than the trappings of power, bankrupt ideologies belonging to the dustbins of history, manufactured historical narratives, ethnic and religious identities, and obsession with flags and emblems. It’s then that its citizens can embark on the journey to building a democratic nation that is the epitome of strong unity, durable peace, and sustained economic growth.

The panoply of challenges facing Ethiopia and its people show no sign of respite. Though active hostilities in the northern part of the country, have almost stopped after the forces of Tigray People’s Liberation Front (TPLF) were pushed back to Tigray from most of the territories they had captured in the adjoining Amhara and Afar regions, the security situation in a number of areas of the nation is fragile owing to the interminable endless cycle of violence that has been racking them for years now. Aside from the death of tens of thousands and the displacement of millions frequent outbreaks of internecine conflicts have led to, the unchecked rise in extremist attitudes, the cost of living, corruption, and land grabbing, among others, have made life an ordeal for the vast majority of Ethiopians. It’s in this backdrop that an incident, whose fallout could potentially plunge Ethiopia into a crisis of catastrophic proportions, recently took place.

On March 29 at least 26 people were killed and several more injured in clashes between armed groups hailing from the Minjar Shenkora Woreda of North Shewa Zone, Amhara regional state, and local militia in the bordering Fentalle woreda, East Shewa Zone of Oromia regional state. The blame game began soon thereafter with both sides issuing conflicting a slew of contradicting statements regarding the incident. Amhara region officials lay the blame on “anti-peace groups” whom they accused of perpetrating the attack. Their counterparts from the Oromia region though disputed the accusation, blaming the attack on “extremist forces operating in the Amhara region”. They also took these forces to task for displacing people and looting property in other woredas of Oromia bordering the Amhara region. It’s surprising that both the federal government and the ruling Prosperity Party (PP) have not made any overt attempt to defuse the tension between the Amhara and Oromia regional administrations even as both escalate the war of words among them.

The feuding between officials heading two branches of the ruling party cannot be confined to them given the party is still ethno-centric despite claiming to be a national party. In fact it has led to spats among major opposition parties active in the respective regions and social media activists, which are spewing a hateful rhetoric that could very well pit the Oromo and Amhara people, the two largest ethnic groups in Ethiopia, in a bloody conflict. The consequences of such a conflict are too horrible to contemplate. From a protracted and destructive civil war in which no side emerges victorious to a total state collapse all the scenarios facing the nation are lose-lose not only for its citizens, but also the Horn of Africa and beyond. It’s not entirely clear whether the protagonists to the ongoing verbal warfare realize that their actions are liable to lead to Ethiopia’s unraveling or are indifferent to the ensuing heavy price.

Ethiopians have demonstrated on ample occasions that they will never tolerate anyone bent on advancing their selfish political agendas by sowing instability and thereby jeopardize Ethiopia’s very survival. All political actors need to abide by the notion that each and everything they do must be guided by the vital interests of the country. They also ought to realize that Ethiopia is much more about than the trappings of power, bankrupt ideologies belonging to the dustbins of history, manufactured historical narratives, ethnic and religious identities, and obsession with flags and emblems. It’s then that its citizens can embark on the journey to building a democratic nation that is the epitome of strong unity, durable peace, and sustained economic growth.

Two pieces of legislation entailing catastrophic consequences for Ethiopia and its people are meandering through the United States Congress. The first, whose official moniker is H.R. 6600: Ethiopia Stabilization, Peace, and Democracy Act, is pending before House floor after it moved out House Foreign Relations Committee in mid-February. Entitled S. 3199: the Ethiopia Peace and Stabilization Act, the second was approved this week by the Senate Foreign Relations Committee for consideration by the full Senate. The bills require the President of the U.S. to impose sanctions on foreign persons the Administration determines to have “threatened peace and stability, undermined progress toward a ceasefire, obstructed humanitarian assistance, or violated human rights in Ethiopia.” They would also would suspend certain U.S. foreign assistance to Ethiopia and authorize the Administration to help entities investigate and seek accountability for war crimes, crimes against humanity, and genocide in that country. Furthermore, the bill would require the Administration to “develop and implement a strategy to promote peace, reconciliation, and human rights in Ethiopia and to report to the Congress on its actions under the bill and on other related matters.”

Ever since the forces of the Tigray People’s Revolutionary Democratic Front (TPLF) launched an unprovoked attack on the Northern Command of the Ethiopian National Defence Forces (ENDF), the bilateral relationship between Ethiopia and U.S. have broken down following the U.S.’ adoption a series of measures intended to arm-twist Ethiopia into choosing its side over China in the new cold war. Although the two countries have recently shown signs of improvements in their relations with the allocation of additional U.S. funds in support of different regional states and institutions in Ethiopia, the U.S. is still bent on applying more sticks than carrots to accomplish its strategic goal in Ethiopia and the wider region. The passage of these blatantly biased bills is sure to negatively impact Ethio-U.S. relations for they erode the trust, predictability and mutual cooperation on which they should be based.

What makes the contents of H.R. 6600 and S. 3199 more galling is the fact that they place no sanctions or threats of one against the TPLF despite its instigation, expansion and prolonging of the civil war as well as the commission of crimes of atrocities. In addition they fail to give due recognition to the steps the Ethiopian government has taken to bring a peaceful resolution to the civil war. Chief among these measures are the withdrawal of the ENDF from the Tigray region in June 2021 following the unilateral declaration of a ceasefire; the streamlining of aid delivery to the regions affected by the war; ordering the ENDF to not cross into Tigray after TPLF forces were routed from the positions they held in the adjoining regions they had invaded in December 2021; releasing several politicians, including TPLF leaders, from prison in January; lifting the six-month State of Emergency declared after three months; and declaring a humanitarian truce to facilitate the delivery of aid to the conflict-affected people of Tigray. Such inequity only serves to deepen Ethiopians’ distrust of the U.S. and its allies.

Punitive sanctions do more harm than good and seldom achieve their intended outcome. The US has not secured democracy, peace and stability by imposing debilitating sanctions on any country in the world. It is the poorest of the poor, low- and middle-income Ethiopians who will suffer the most by the passage of H.R. 6600 and S. 3199, not the government officials they target. The sanctions will adversely affect regions which have already been hit very hard by the war, including Tigray, Afar and Amhara given they make it very difficult to source the materials needed to reconstruct the health, educational infrastructure the war has ravaged as well as the resumption of other critical services. Moreover, by calling for an independent investigation into conflict-related human rights violations, the bills signal lack of confidence in the Ethiopian Human Rights Commission, whose report on a joint investigation undertaken with the U.N. Human Rights Commission on the war in Tigray, was endorsed and applauded. The debilitating impacts of the bills on a poor nation like Ethiopia will be devastating and apt to linger for years. This would lead to the very instability and fragility of Ethiopia that the U.S. ostensibly wants to prevent.

In a rare foray into engaging Ethiopians in candid dialogues since the advent to power of Prime Minister Abiy Ahmed (PhD) in April 2018, senior officials of the ruling Prosperity Party (PP) have fanned out across Ethiopia to hold dialogues with citizens from all walks of life. The discussions come on the heels of the premier’s pledge at the conclusion of last week’s meeting of the party’s executive committee that party officials would soon be dispatched throughout the country with a view to seek durable solutions to multi-pronged challenges in collaboration with the public. The party said the dialogue has two underlying objectives: informing the public about the decisions of the party’s first Congress held at a fortnight ago and reaching a consensus on the respective roles of the public and the government in the search for solutions. By most accounts the participants were apparently able to voice their views without any inhibition. Time will tell if the party is committed to heeding them.

The topics raised at the discussions largely coincided with the areas of focus PP’s congress vowed to tackle. Chief among these are the deteriorating security situation in large swathes of the country; the debilitating hike in the cost of living; the rise of extremism and exclusionism; and the proliferation of corruption and other forms of bad governance. The crux of the impassioned and sometimes angry views expressed by the public was that the blame for the current state of things squarely lay with the government. While some acknowledged that the plethora of problems besetting the nation and its people predate the government and thus absolve it of some degree of culpability, most did not buy into this line of reasoning saying that the government lacked both the desire and capacity to put paid to them. In fact, they argued, the rank of the government has been infiltrated by duplicitous elements intent on advancing their selfish interest or the sinister agendas of domestic and foreign enemies. The government would do well to take immediate corrective actions for the extent to which it genuinely responds to the demands of citizens will determine if and how long it may remain in office.

The gravest of the grievances voiced by everyone participating in the discussion forums is the cycle of violence that has been rocking Ethiopia for some years now. From the frequent outbreak of internecine conflicts and targeted attacks to the war in the Tigray, Amhara and Afar regions thousands of innocent citizens including children and the elderly have been butchered and injured with millions more displaced from their homes. Though the public has demanded time and again that the government protect its safety and security and bring the perpetrators of acts endangering its welfare, the latter has been found wanting when it comes to ending the recurrence of senseless carnage. The government’s predictable response to the calls for it to guarantee the fundamental rights of citizens to lead a secure life anywhere within the territory of Ethiopia has been to vow that it’s committed to upholding the rule of law. It must stop paying lip service to a matter of grave importance and back up its promise with action.

The second and equally pressing matter that arose during the course of the discussions was the backbreaking cost of living. The interminable escalation of the headline inflation rate has meant that life has become a living hell for the vast majority of Ethiopians and pushed a significant chunk of the population into poverty. There are a host of reasons driving inflation. One of them is the inability of the government to formulate and implement monetary policies instrumental to contain if not bring down the phenomenon. Its failure to allocate sufficient foreign currency to importers of basic necessities and eliminate the predatory behavior of unscrupulous market actors have further contributed to exacerbating the inflationary pressure. Although the government can do nothing to halt a significant contributing factor—the rise in the price of fuel and imported food items—it is incumbent on it to seek both short- and long-term solutions through meaningful consultations with the general public. Undertaking a course of action that does not take into consideration the views of everyone who has a stake is bound to fail miserably and worsen the problem. The serious ramifications of the spiraling inflation, namely stirring widespread public discontent that triggers political and social unrest, is something the government needs to wise up to and take appropriate steps to neutralize them.

As much as the government bears the primary obligation of easing the suffering Ethiopians are undergoing, it cannot succeed if it tries to go it alone. Aside from empowering political parties, religious organizations, educational institutions, civic and professional associations, elders, the youth and women to play an active role in the search for informed solutions, the government is duty-bound to clean its house and purge officials and functionaries in its structures who are complicit in the very problem they are supposed to fix. Important as organizing dialogue forums may be in garnering the views of the public, it’s paramount to ensure that they are inclusive. It’s only then that the government can effectively respond to the demands expressed by the public in the recent discussions.

As some U.S. lawmakers and lobbyists engage in a concerted endeavor to force Ethiopia into kowtowing to the demands of the West, it is incumbent on the government, people and friends of Ethiopia to do everything possible to foil their sinister design. While efforts are underway both at home and in the U.S. to stop H.R. 6600 and S. 3199 from seeing the light of day, they should be ramped up until the bills are defeated. It’s disheartening though to see some citizens and members of the diaspora community side with the sponsors of the bills. Ethiopians should not despair just because the bills have advanced to the House and Senate floors. In order for them to become law they will need a full vote of both chambers and the signature of President Joe Biden. There are several things that can be done in the meantime to ensure that even if the bills pass they are defanged and unrecognizable from their current form. It’s imperative that we keep up the fight to the death and resolutely defend our national interest.

The inability of the political class to resolve differences through discussions and negotiations has for far too long been a hallmark of Ethiopian politics. There is no disagreement under Ethiopian skies, however deep-seated it may be, that cannot be addressed through genuine dialogue. Politicians that truly have the interest of Ethiopia and its people at heart owe the duty to ensure that they comport themselves in a manner that advances the interests of the nation, not their selfish motives or the agendas of adversaries intent on doing the country harm. They need to work together to facilitate Ethiopia’s smooth transition to a democratic order, uphold the rule of law, and enable citizens to have access to justice. Furthermore, it’s incumbent on them to play an exemplary role in terms of, among others, rejecting discriminatory attitudes and practices, creating a mutually respectful relationship amongst themselves, and forging a culture of constructive dialogue. It’s then that the calamitous ramifications of the war of words between members of Prosperity Party can be averted.

The inability of the political class to resolve differences through discussions and negotiations has for far too long been a hallmark of Ethiopian politics. There is no disagreement under Ethiopian skies, however deep-seated it may be, that cannot be addressed through genuine dialogue. Politicians that truly have the interest of Ethiopia and its people at heart owe the duty to ensure that they comport themselves in a manner that advances the interests of the nation, not their selfish motives or the agendas of adversaries intent on doing the country harm. They need to work together to facilitate Ethiopia’s smooth transition to a democratic order, uphold the rule of law, and enable citizens to have access to justice. Furthermore, it’s incumbent on them to play an exemplary role in terms of, among others, rejecting discriminatory attitudes and practices, creating a mutually respectful relationship amongst themselves, and forging a culture of constructive dialogue. It’s then that the calamitous ramifications of the war of words between members of Prosperity Party can be averted.

Best known for playing a big role in establishing the Association of Chartered Certified Accountant Ethiopia (ACCA), Hikmet Abdella is currently the Director-General of Accounting & Audit Board of Ethiopia (AABE). She has been holding the position since 2019 after replacing Gashe Yemane, the founding DG of the Board.

Hikmet has been tasked to complete the path to full implementation of International Financial Reporting Standard (IFRS) in the next three years.

The Reporter’s Ashenafi Endale sat down with the Director General as she reflects on the path taken to make Ethiopia’s audit and accounting standard comply with internationally accepted principles and rules. Excerpts:

The Reporter: How is the progress of Accounting & Audit Board of Ethiopia (AABE) in professionalizing Ethiopia’s auditing system?

Hikmet Abdella: Financial statement is the cornerstone of any institution, whether they are business entities or NGOs. But Ethiopia had no financial statement standards for a long time and there were also no standards for professionals.

The Accounting and Auditing Board of Ethiopia (AABE) was established under such context. Before the AABE, the Auditor General (AG) used to provide licenses and undertake supreme audits for public institutions. So licensing auditors, accounts and firms was an additional job for the AG, at that time. It gave the licenses but had no capacity to control and regulate them.

A World Bank study in 2007 indicated that Ethiopia’s economy was growing faster and there is no accounting and auditing professionals that matched the growing businesses. The AABE was established based on this recommendation.

The AABE’s task is to license accountants, auditors, firms and regulate them. We also adopt and implement internationally accepted auditing standards in Ethiopia. These professionals undertake audits and submit documents to the AABE. We have a library of firms’ files.

Which companies are difficult to control? Which company structures are more complicated in Ethiopia?

Our prime priorities are Public Interest Entities (PIE) and the AABE is basically established to protect these entities from failing. If a company fails, it might not have much impact on the whole economy but if PIE fail it will have a wider economic impact.

Different countries have varying definitions for PIE.

PIE is defined qualitatively and quantitatively. For instance, financial institutions are PIE with huge numbers of shareholder’s with interests. They collect savings and give loans. So they must be protected from failing. Secondly, SOEs are protected because they are the highest taxpayers.

MFIs and share companies are our next priorities, while PLCs are our last priority. We don’t have to control vendors since they have absolutely no impact on the economy.

Every jurisdiction has its own definition. The AABE is currently developing its own definition for PIE and other business entities but we have to align with international standards.

Currently, a similar international definition for PIE is being debated and we have been participating in such debates virtually, due to the COVID-19. Probably by next year, we will have a new definition for PIEs. But there will not be much deviation from what we are using now.

The AABE’s task also relates to domestic resource mobilization. Big companies have to generate big taxes and the AABE controls big business entities strictly, than small businesses.

Ethiopia’s private sector is very new. It has only been 30 years since the communist regime changed and the only big players are financial institutions, followed by other share companies.

Generational companies, that have passed from generation to generation, have also a big role to play and we must be able to maintain family owned enterprises. They usually lie in the middle, between small and big companies.

Family owned enterprises, if well nurtured, can contribute up to 50 percent of the tax revenue. So they should be considered as PIE. But in Ethiopia, family owned enterprises are dying out currently, due to various reasons.

Scholars argue that the tax base should be diversified in Ethiopia. Is it big companies or small businesses that pay more taxes currently?

It is a matter of context. Large taxpayers have to get incentives in different mechanisms, so they can grow more robustly. A country cannot grow without diversifying its tax base at a small business level.

The number of taxpayers in Ethiopia must grow. Many small companies, pooled together, bring huge sums of tax revenues. But the tax authorities must be careful not to squeeze small businesses through stringent taxes. Small businesses must be relieved from stringent of taxes, so they can grow.

What is the AABE’s capacity in controlling and regulating Foreign Direct Investments since Ethiopia’s economy is integrating into the global economy?

The Prime Minister recently stated that the financial sector will open up. And the ongoing liberalization and privatization, as well as the World Trade Organization accession, need ultimate caution. It is good that big foreign players are coming to Ethiopia. But all regulatory institutions in Ethiopia, including the AABE, must sit down, and discuss whether we can handle it or not.

Ethiopia’s economy and regulatory institutions have been closed for a long time. Even neighboring countries have more capacity when it comes to regulatory capacity. There are also differences but we cannot remain closed. We must look for methods to bridge the regulatory limitations.

The east African block including Rwanda, Uganda, Kenya, have a system in which accounting and auditing professionals can move freely from one country to the other.

When Ethiopia opens up, they will bring their own systems and professionals. Ethiopia must produce its own professionals to control foreign firms. Currently, Ethiopia has no sufficient accounting and auditing professionals to support the economy.

We are currently preparing to establish the Ethiopian Institute of Certified Public Accountancy (EICPA). Hopefully, it will be operational this year and start to produce professionals. If you go to Kenya, there are close to 40,000 professional accountants but Ethiopia has around 250 professionals. We cannot support or handle the opening-up of the economy with such meager figures.

The Capital Market is nearing realization in Ethiopia, which requires precise and highly trained professionals. PIE will be affected if we launch a stock market without skilled professionals. In some countries, only firms listed on stock markets are considered PIE.

As soon as the stock market is opened, banks will be the first to be listed. These institutions must be valuated every three months, instead of annually as before.

Unless we have professionals to value the Initial Public Offerings, public interest will always be affected. Even statements made by politicians can affect the value of an IPO; so the listed firm must be valuated frequently. This is impossible without qualified accounting and auditing professionals.

Officials at the National Bank of Ethiopia are saying it will take three years to create a fully-fledged stock market ecosystem. Can we reach that with the absence of professionals?

Big things can be done in three years. With the EICPA established now, and is backed with a sufficient budget, we can generate 5,000 professionals annually.

There are already many graduates but there is much to be done to create the right stock market ecosystem. Public interest must not be affected, until we try to fill the gap in lack of professionals.

There are many distortions in the commodity value chain and malpractices in the corporate world in Ethiopia. Even recently, importers and wholesalers have been blamed for hoarding edible oil, which has caused a crisis. Do you think the AABE has created a good corporate culture in Ethiopia?

We did not achieve much progress. There is no responsibility. Do you think money laundering is done without the knowledge of accountants? Is the accountant responsible to the public, government, or the company owner?

Ethics is the biggest problem. Accountants can build or destroy a country. The demand for accountants is always up, even at war times. Accountants can change small money into big, or vice versa.

Currently, Ethiopia is negotiating to start the Africa Continental Free Trade Area (AfCFTA) and also the WTO. It should be accountants that represent Ethiopia on the negotiation table. Accountants know what the agreement articles mean. They can tell you what it means ten years from now.

Does the AABE work with the auditor general? Do you have the capacity to take action on accounting misbehaviors?

The Auditor General audits institutions and we produce the professionals. We do not audit public institutions. We do SOEs, private companies and NGOs and the Ministry of Finance reviews the financial statements. Currently, we are reviewing SOEs parastatal financial statements. We will discuss with the PEHA, the MoF and the AG next week.

Ethiopia embarked on the road to privatization and liberalization three years ago to shift the economy from state-led to the private sector. But currently, regional states are building their own conglomerates, while the federal government also establishes the Ethiopian Investment Holding. Do you think this can create productive and efficient firms in the economy?

That is a difficult question. What is for sure is less is done concerning financial statements. Many SOEs, endowments and other firms vanished, or merged, without any consultations with the AABE.

There is a huge problem on this issue. There is no procedure at all in cases of shutting down SOEs, mergers or creating a holding company. Assets, liabilities and other complexities go without proper accounting, especially in mergers. Firms usually close or merge in the middle of the year, before the fiscal year ends and a financial statement is compiled. This is a big problem.

Usually, the Cabinet of Ministers decides on the formation, closure or merger of SOEs.

I have no knowledge on why the government is making changes when it comes to its role in the economy. But strengthening parastatals is common in many countries. We are also seeing progress to accede to the WTO.

Is there capacity to regulate foreign firms like MPESA and are foreign banks allowed? Do you think banks can survive foreign competition?

Ethiopia’s financial institutions are better than where they were ten years ago. If a single foreign bank had come ten years ago, local banks would have never survived, even if they merged into one.

But now, local banks are stronger. The problem is, local banks cannot grow more than they have now. They cannot diversify their products anymore and are very similar. If foreign banks or MPESA come, more products can come with them and support the economy.

But the banking sector will not be opened at once and will be gradual and managed. Unless the regulatory capacity grows parallel and equally, Ethiopia will be in danger.

What do you think is the competitive edge of local banks?

There is not much but their organic growth is very appealing. But the quest for access to finance in Ethiopia is beyond the capacity of existing banks. The economy grew very fast but the access to finance did not.

Even now, we are facing a liquidity problem, which has affected the construction industry due to the lack of credit. The construction industry massively contributes to the economy. But it depends on finances.

The return on shares also remains very positive. But some banks are reaching their ceilings. Many people bought shares because there were no other alternative investment areas at the time. And once the stock market is opened, there will be more opportunities, even for the layman.

Did the new Commercial Code, which was amended after 62 years, bring changes to company structures and accounting systems?

Allowing the creation of a holding company, one person PLC and other minor changes have occurred. The code also allowed foreign accounting firms to come to Ethiopia. The big four, which include KPMG and PWDC, are allowed to operate in Ethiopia.

But these international financial institutions can only partner with local companies. They are allowed to have a 49 percent stake. They are currently requesting us for a license. This is one of the signs that the economy is opening.

The big four will have a big role in capacity building but are very unhappy with the 49/51 proportion. But for me, it is perfect.

So auditing is allowed for foreigners now?

Yes, but this was only made possible after the commercial code was amended.

Recently Ethio telecom’s CEO, Frehiwot Tamiru rejected the 80 billion birr asset valuation of the company. Some say the low valuation is intentional, and conspiracy concerning the valuator has been raised.

I am very concerned of the valuation issue in Ethiopia. Valuation is one input for accounting. In the old days, the value of vehicles dropped every year and on the tenth year, the value gets to zero. The Tax Law also states it must depreciate by ten percent annually. The IFRS states an assets value must be stated in its current market value, which shows the true value of a company.

In Ethiopia, the value of vehicles keeps appreciating. A Toyota bought with 200,000 birr ten years ago is now 2,000,000 million birr. So according to IFRS, the vehicle is worth 2,000,000 birr. But the tax system does not demand depreciation.

Who is the right valuator in Ethiopia? There are only three certified valuators in Ethiopia.

The conspiracy issue when it comes to foreign valuators is not a new issue. That is why I say the opening up of the country must be cautious. Ethiopia has been closed for so long that the process must be done step by step. The reasons why the big four hate the 49/51 ratio is because they want to come at once and manipulate the weak regulatory system.

Whatever your background, you care about your country. But foreign firms care only about their profit. The loyalty of their accountants and auditors is not to the Ethiopian public or the government. It is for their parent company abroad. This is why we must produce our own professionals, to maintain the balance.

Which institutions have shown progress in implementing IFRS?

That would be financial institutions. They have the money and IFRS is expensive. If a company can afford the expensive professionals, it is simple to implement IFRS. There is a huge demand for the professionals, but there are very few. The demand shot-up since the AABE came.

Financial institutions are implementing IFRS because they have the money and managed to engage international financial consultants, but SOEs are the first to bring an IFRS report four years ago.

Banks are blamed for engaging in informal financing including the black market, and informal Hawala services. Do you think IFRS brought transparency to the banking system?

Every time an economic system is closed, informal doors are opened, including corruption. Many problems will be solved, if the economy is opened but as long as it remains closed, it creates many loopholes.

New banks have come into the picture in the past three years. But lately, the PM has said the sector will open up soon. When should it be opened?

When foreign competition comes, it will be all about survival of the fittest. How long will it take for our banks to be fit? If they have to merge to be competitive, let it be. Mergers should be encouraged. It is better to have a few strong, internationally competitive banks than many banks.

So far, Ethiopian banks are not even going into regional states, because they did not even satisfy the urban clients while Kenyan and Nigerian banks are working at continental levels. That should be our direction.

What would be your expectations of the upcoming stock market?

It will engage the ordinary people. Only few have been able to buy bank shares. But in a capital market, people can have a stake in the stock market. Anybody can invest in profitable businesses, in a stock market.

Will the EICPA produce professionals for the stock market?

Yes. The institute will generate mainly certified public accountants, to address the diversified demand of professionals from different institutions.

Various institutions want to install their own institute to produce such professionals. But that would be unaffordable. So it should be the EICPA that branches-out and addresses these diversified interests.

Who will be listed on the IPO first?

Financial institutions, then SOEs, share companies, and family owned enterprises. The last one may need discussions on whether they want to go public.

Cross listing is also possible. For instance, companies like Coca Cola, which are listed in other countries and also operating in Ethiopia, can be listed in Ethiopia.

Why is it still difficult to solve under-invoicing and over-invoicing challenges in Ethiopia’s import-export business?

Our concern is how to address it through a transparent accounting system. But there are varying scholarly debates on this issue.

Lately, the Ethiopian Investment Holding company has been formed to be an umbrella company for SOEs. Do you think such a mammoth holding company, run by a government, can be efficient given that SOEs are known for wasting resource?

I believe such trend of creating holding companies is a good start. If there is a strong accounting and valuations system, SOEs and holding companies can be efficient.

Liability and asset management company (LAMC) was also recently formed to soak up SOEs’ debts. Credit default swaps, or trading credit derivatives, is common in other countries. In Ethiopia too, some banks are buying defaulted debts from prospective enterprises. Do you think the trend is recognized by the AABE in Ethiopia?

This area should be researched. Many new trends are emerging in Ethiopia’s economy and its contribution must be analyzed.

Before the Ukraine war and COVID-19, scholars were saying globalization is invincible. Now, self-sufficiency is becoming irreplaceable. We have been dependent on FDIs, but they abandon industrial parks when they want. Yet, Ethiopia is pushing for privatization and more integration in the international economic system.

Don’t you think it is time to focus on economic sovereignty, including import substitution? I am not talking about closing the economy, but where should be the boundary?

No country is economically self-sufficient, including the US. Their economy was stuck when Chinese supply declined during COVID-19. Many companies closed in the US, because the supply chain was disrupted. Ethiopia cannot think of self-sufficiency with a nascent manufacturing industry.

But I believe it is time to re-prioritize our policies. Especially, our negotiation skills on international economic activities must grow. The level of our negotiation skill determines the level of external debt stress on our economy.

Many countries have long term plans, up to a century. We must be clear and have a realistic plan on where we want to go in the long term, regarding self-sufficiency, import substitution, even on Chinese imports. For instance, we export oilseed and import edible oil at expensive prices. This can be replaced locally.

Many investments were damaged due to the conflict in northern Ethiopia and COVID-19 pandemic before that. Can they be compensated rightly?

Knowing their accurate accounting is critical, to determine their losses and compensations. We also need to produce professionals on investment insurance policies.

How man licensed auditing firms are there?

Basically, the AABE gives two kinds of licenses. Authorized accountants prepare financial statements. There are around 2,000 authorized accountants, at federal and regional levels and there are 162 independent auditors.

What are its challenges?

There are many challenges. The AABE is a regulatory body. We are expected to have much more capacity than those we control. One of the challenges relates to professionals earning more money if they operate privately, than work for the AABE.

Professionals in regulatory institutions, have less incentive. If the professionals have more power than the regulator, it is difficult to regulate. For the time being, the board is using consultants who are paid by the World Bank, with approval from the Ministry of Finance.

ACCA supported us too. Currently, the AABE is in good position. We know how to review audit reports, and control licensed professionals. Some companies take up to four years to finalize financial statements, but we always begin to review from the first year.

The world is celebrating March 8th. Do you think the affirmative actions provided in Ethiopia have really empowered women?

I do not know what incentives are provided. March 8th is good to highlight the challenges women face. But nobody cares about the details on normal days. Those women like us, who have succeeded, should share our experiences and become role models to young people. We have much homework ahead.

The statistics of women in higher corporate and leadership positions, is alarming. I think there is only one bank president currently and this is not because women lack capacity. If you look at the boards of banks, women constitute less than 10 percent. It is the same in SOEs.

Our definition of democracy is distorted. Ethiopians think ideological semblance comes from similar people. That is wrong. Successful women must nurture the young.

Some European banks which survived the 2008 financial crisis, were banks led by women. Do you think making women CEOs is a guaranteed success?

Women have different management philosophy than men. Women lead with humility. It is not because we have more capacity but because we have intense concern for humanity.

Usually women empowerment issues are used or raised during March 8th or elections. When will equal opportunity become embedded in the publics thought?

We live in a man’s world. The existing trend must change completely, to accommodate women. A new world and country that equally accommodates women and men must be created.

Radical feminists argue a new social order should be created from scratch.

That would be good, if it is possible.

But other groups argue the existing world can accommodate women, with some adjustments.

I agree with this one. But I do not think we should try everything foreigners tell us, especially on feminism. Context and culture are very important. Ethiopia has a different context from the west. We can create an indigenous system for Ethiopia.

First, we have to reconfigure what the education system, society and the media tells about equality. The narrations and practice must be seamless, while extremist views on gender issues only harms the efforts.

If completely erasing the existing system and creating a new order is possible, it should have been simple to reshape the country.

For instance, there are some jobs where women earn less for the same position. Can it be solved by policy actions?

There are various challenges posed on women, some to be solved by the government, some by the private sector, or the society. For instance, board compositions can be solved only by policy. Chambers can also do more work to bridge the inequality gap. And some challenges are inherently solved through time.

There is this discussion over equal opportunity versus equal outcome. There is opportunity for all. Both boys and girls go to school. But that equal opportunity does not continue. Women give birth and then must take care of children.

The inequality will change as more women come into leadership roles. No challenge can be solved overnight, through policies or campaigns. For instance, the AABE can play a role in board compositions because corporate governance is one of its tasks.

Sewagegn Chane is director of the Public Financial Institutions supervisory department at the Public Enterprise Holding and Administration (PEHA), which regulates state-owned enterprises. Sewagegn is currently responsible for directly supervising the Development Bank of Ethiopia (DBE) and the Liability and Asset Management Corporation (LAMC). The Commercial Bank of Ethiopia (CBE), Ethiopian Insurance Corporation (EIC), and the National Lottery were also under his supervision, until they are transferred to Ethiopian Investment Holding (EIH) past May.

Working in public financial institutions for 30 years, Sewagegn initiated the establishment of the stock market in Ethiopia, which is bearing fruit eleven years after the first feasibility study. He was also vocal and key in rescuing the DBE, initiating Ethiopia’s first reinsurance company, Takaful (Islamic insurance), among others.

Sewagegn is also researcher at i-Capital Institute and organizer of the East African Finance Summit. Currently, he is leading two teams formed at the institute, studying the establishment of an investment and agricultural development banks in Ethiopia. Although he has been advocating ending state protection over the financial sector for years, he has currently changed his mind, just as Prime Minister Abiy Ahmed (PhD) authorized a policy that envisages opening up Ethiopia’s financial sector to foreign competition. Sewagegn believes the banking sector should remain closed at least for the next few years. The Reporter’s Ashenafi Endale sat down with the public finance guru. The excerpts, does not necessarily reflect PEHA’s position.

The Reporter: What is the progress in reforming public financial institutions, which commenced after Abiy came to power?

Sewagegn Chane: The biggest reform we undertook is in the DBE. In 2018/19, the House of Peoples’ Representatives (HPR) decided DBE cannot continue as a financial institution and debated on how to dismantle it. That year, the bank reported 765 million birr loss so the HPR decided that the bank is not supporting itself, let alone the economy.

Myself, Haileyesus Bekele, the president at the time, and Yohannes Ayalew (PhD) DBE board president at the time, were called by the HPR to explain the issue. At that time, Public Finance Institutions Agency was a separate entity outside PEHA. The agency was led by Sintayehu Hailemichael (PhD) and I was the deputy director for operations. When some 36 SOEs were put under PEHA in 2018/19, the agency was included under PEHA, as a directorate.

The Budget and Finance Standing Committee at the Parliament insisted the DBE must be dismantled, because it was reporting a loss consecutively. The three of us were called to give our final comments on the committee’s decision. The committee was told that the fundamental problem of the bank was the lack of institutional independence.

Everybody was intervening in the bank, and it was unable to operate as a bank. The PM, other ministers, sectorial institutions, and even individuals have been meddling in DBE’s operation. Secondly, the bank gives loans but does not collect. Those who took DBE loans view it as the government’s budget, not as a client. Most of them had the “developmental investors” plate.

They take a loan and divert it to other businesses. Commercial farming in Gambella and Benishangul are good examples. I was in Gambllea for a year and half, to study why DBE’s loans failed there. There are so many rain-fed projects there. Particularly, six of those that took loans completely diverted the money to other businesses, instead of the commercial farming.

I stood before the standing committee, and pledged to give the DBE additional time. I told them if institutional freedom is restored, relationships with clients will be straightforward, and the bank’s loan collection capacity rebuilt, bringing DBE on track. So I asked the standing committee to give us just one year, and if we fail to rescue the bank in that year, then the committee can dismantle it.

Yohannes on his behalf explained how the IMF and the World Bank are happy to see the DBE dismantled because they do not want development banks in developing economies. He also elaborated how important a development bank is for Ethiopia. After a brief tea brake discussions, the standing committee announced it granted the one year time.

Immediately, we embarked on the reform agenda, introducing seven reform pillars. One of the biggest reform pillars was reducing DBE’s Non Performing Loans, which was over 40 percent at the time. If the bank cannot collect the loans, it cannot disburse loans the next time.

DBE’s NPL at the time was weighed in rain-fed agriculture and textile. So, we stopped any further loans for rain-fed agriculture. In textile, many foreign investors took loans in billions but did not pay, so we decided to take over all the projects that are not paying back their loans, and transferred them to other investors.

We also took the contract management of non-performing projects. For instance, the DBE took over the management of Elsi Addis, Etur and other textile factories, for the time being. Except Etur, most of these projects have been transferred to new investors, without reaching the foreclosure stage.

The major project left on our hands to date is Ayka Addis.

The other serious measurements we took were barring any officials from intervening in any loan appraisals and disbursement processes. Before the reform, orders for some loan approvals were given from the Office of the PM. Officials from the Industry, trade, agriculture, and many other ministries used to give such informal orders to the bank. Now, even the DBE board cannot involve in loan disbursement cases, except on strategic issues.

We managed to reduce DBE’s NPL to 30 percent this year, including Tigray loans. It is actually 17 percent, if loans in Tigray are excluded, which are affected by the war in northern Ethiopia. Profit comes from loan interest. If the loan is not collected, there can be no profit.

We managed to generate 1.2 million in 2019/20; just a year after the reform was launched. This year, the bank generated 3.9 billion birr in profit. If we did not put aside 4.1 billion birr provision for the Tigray loans, DBE’s profit this year could have been 7.8 billion birr. The DBE is rescued now and everybody is acting as a client now.

DBE’s source of finance is the guarantees from the Ministry of Finance and the National Bank of Ethiopia (NBE). The capital has increased from five million to one billion. The macroeconomic committee approved a study to allow new DBE bond, effective since January. This is apart from the GERD bond, which is the DBEs source of finance.

Before the reform, all the financial indicators of the bank were negative, and unhealthy. We completely reversed all of that, except for the NPL. Before the reform, there were only expenses and disbursement, but now there is income.

Out of the 31 strategic measurements we stipulated under the seven reform pillars, 21 are aggressively implemented and ten are in the process. Only one measurement has not started, which is the digital technology and modernization initiative.

The PEHA and DBE’s board has contributed for the success of DBEs management. One of the positive factors is the steel-serious discipline of Tegegnework Getu (PhD), the board chair of DBE. As a board chair, he is opaque to any external influence or favor. He never took stipends and incentives allocated for board chairs annually. Even he uses his own car for DBE activities.

Yohannes was the chief economist at the NBE for a long time. How did you believe in him, that he could rescue the bank?

Under past presidents, the bank had many deviations and exceptions. Instead of going through loan approval and disbursement procedures, loan seekers directly contact the president and get the loans, informally.

For instance, after we banned DBE loans for rain-fed agriculture in 2018/19, the bank gave 120 million for rain-fed agriculture project. The president at the time said he was forced because certain officials at the Ministry of Agriculture managed to give the order via the Office of the PM.

Surprisingly, the board chair does not know about the loan. The bank was bleeding. We had to be brutal to stop the bleeding. Most of the bad loans were given during Isayas Bahre’s time. Both Haileyesus and Getahun Nana were unable to save the bank. Our biggest worry was that Yohannes might decline the role to lead the DBE.

Over 200 large scale agricultural projects, and a number of foreign textile investors took loans from the bank and failed to pay. Are you pursuing them legally?

We are trying to acquire the lands currently. Our biggest problem now is with the regional governments of Benishangul and Gambella. The land is the key asset the investors provide as collateral to take the loan from the bank.

After the investors fled without paying the loans they took, the DBE has to acquire the lands, since it is the collateral. Once we finalize acquiring the lands, we will transfer it to other investors. Then we will recover the previous loans.

I heard the Benishangul and Gambella regional governments are demanding it pays taxes on the lands?

We reached agreements on some of the lands in Benishangul. There are ongoing debates on the amount. The bank agreed to pay the tax, if it agreed on the amount. The regional governments usually give one plot for multiple investors, so one certificate is given to multiple investors. The regional agriculture bureau has been reporting to us that the lands were being cultivated by the investors, which was false.

In general, rain-fed agriculture and textile investments have bled DBE.

For instance, Ayka Addis’s investor used informal channels to get the loans, instead of going directly through the bank. It either goes through the PMO or other officials. Solving all this was not simple.

Most of DBE’s clients were unruly. They had the right to take the loan, and the right not to pay. So we disciplined the clients first, and reversed the bank’s practice of negligence. All this was done in three years.

How much is the land leased for the rain-fed projects?

The rate depends on the regions. Basically, tax, lease and anything related to the land is handled by the investors. But since the investors went bankrupt, and the DBE took the lands, now the bank has to pay them. This is the reason why the regional states are asking DBE for the taxes, because it is under the bank now.

The investors who took the land in regional states for commercial farming, left, and the tax holiday period is over. So regional states are now claiming the taxes and the DBE agreed to pay. This is the game.

Did the Gambella commercial farms failed by design?

The loan was supported by policy. The policy of initiating commercial farming and modernizing the agriculture was not wrong. So the DBE prepared policy and procedures.

The major factor for the failure at that point, was the decision to give loans for rain-fed agriculture. This was a mistake because the investors knew the loopholes and abused the loans and failed to return it.

The DBE is on the right track now but business continuity is more critical.

What are DBE’s sources of funds, after the NBE’s 27 percent T-bill is replenished?

The NBE introduced another bond this year, in which banks channel one percent of their loan portfolio to the DBE. In the past six months, a bit more than 10 billion birr has been channeled to the bank from this new scheme. Once we start from insurances, these two schemes will become our biggest source of funds.

The GERD bond and loans from international banks also generate finance. It also accesses external funds like SME loans, through the MoF. DBE’s T-bill is almost zero currently.

How much is the loan interest the DBE is paying currently, when will the rest mature?

The DBE pays interests by adding two percent on the saving interest, which means nine percent. On the other hand, DBE’s interest rate is between 11 percent and 12 percent, the least being for import substituting projects. The margin covers its administrative cost. So the bank is able to pay all its interests duly.

DBE requested to put Tigray NPL’s off its balance sheet. But NBE officials told The Reporter that it is not going to take it off its balance sheet.

If Tigray’s NPL is put-off DBE’s balance sheet, DBE’s NPL could be 12.5 percent. But including the Tigray NPL, which is 10 billion birr, the NPL stands at 30.4 percent. What we are saying is this 10 billion birr in NPL happened by factors out of DBE’s control. We are not asking the NBE to cancel the Tigray loan.

We undertook a detailed study on how the NPLs could be taken off the balance sheet, and presented to the NBE. We do not know why NBE is silent on the issue. The CBE also requested the NBE to take off two billion birr off CBE’s balance sheet. This was also studied and presented to the NBE.

The NBE first said the request should be processed by the Bankers Association but the issue is still in the process. It is illogical to keep inactive numbers on banks’ balance sheet. When unrest occurred in Oromia over the past few years, the NBE allowed loans of affected investors in the region to stay off banks’ balance sheet. The same can be done for Tigray. It is not a big deal. It is NBE’s decision but I do not know why it is reluctant when it comes to Tigray NPLs. Tigray NPL does not represent DBE’s actual performance, which is outstanding.

DBE’s outstanding loan is 63.4 billion birr. Total NPLs stood at 19 billion, of which 10.1 billion birr is created in Tigray since the war. The president of DBE requested to exclude the Tigray NPL but PEHA does not agree, unless the NBE approves it.

Another investor is negotiating to buy Ayka Addis. Will this be the last negotiation?

A number of potential buyers have been trying to buy Ayka Addis in the past but failed. Especially a Chinese investor was very eager to acquire Ayka Addis. Any potential buyer is expected to contribute 50 percent of Ayka Addis’s portfolio. For instance, the initial investment loan was USD 1.7 billion so the buyer is expected to contribute half of it. But the Chinese lacked capital so it requested to contribute only 10 percent of it, which means around USD 200 million, so we refused because we cannot breach the 50 percent law.

If Ayka Addis is sold, DBE’s NPL will drop to around 15 percent, from the current 30.4 percent. Ayka Addis is holding a huge loan. The principal loan is 1.7 billion, a decade ago. Including the interest, probably it is around USD three billion by now. The value of the machines, factory building, raw materials when the DBE received Ayka Addis, is valued at USD 1.79 billion.

By the way, we are still paying the salary of 4,500 employees of Ayka Addis, though it has not operated for years now. It is between 13 million birr and 14 million birr every month. We cannot abandon the employees, after the Turkish investor left. We are carrying all this cost.

There were also other alternatives for Ayka Addis, other than selling it.

There were three major options tabled. The first is selling to a capable investor or buyer. The second is operating Ayka Addis under a management contract, just like Elsi Addis and the third was repurposing Ayka Addis into an Industrial Park. Some three potential investors have been negotiating. The Chinese came last.

Currently, another negotiation is underway. We hope this will be the last one. It is a consortium of local and foreign investors. We will disclose it when it materializes. Ayka Addis’s operation ranges from cultivating cotton to sewing the clothes. It pins the cotton, dyes it, and makes the clothes. It is an end-to-end project. So the potential buyer is expected to specialize in all these value chains.

Will the new buyer pay Ayka Addis’s accumulated tax?

Under Ethiopia’s law, a company does not pay taxes if it declares bankruptcy. After the DBE took over Ayka Addis, the tax authorities are saying Ayka Addis must pay tax, since it did not undergo liquidation. Ayka Addis was not operating for the past eleven years. So, the tax authority is asking for back-taxes for all these years, stating the project did not declare liquidation. So we are arguing with the tax authority.

But the DBE declared foreclosure?

When the Turkish investors left and the DBE started managing Ayka Addis, the tax authority started asking for tax.

Amazingly, Bmet cables, one of the Turkish investments abandoned after taking huge loan from the bank is a good example of how much Turkish investor’s exploited us. Under the Turkish investor, Bmet cables utilized 40 percent of operational capacity but they were not paying their loan.

Now, the local buyer, Tadesse Admasu of Red Star Trading, is operating at 12 percent of its capacity due to different reasons. The buyer acquired Bmet paying 890 million birr. Now, it has paid all the loans owed to Bmet.

How much has Ethiopia lost because Turkish investors left the country without paying DBE loans?

Before, their equity contribution was 30 percent. This means the DBE contributes 70 percent of the investment. Under the previous ratio, a Foreign Direct Investment comes with USD 30 million, and takes 70 million. The foreign investors left without paying the 70 percent loan they took from the DBE. But now, we adjusted the equity contribution to fifty percent, for foreign investors. Local investors pay 20 percent.

FDI is needed to bring technology, capital, forex, and create jobs. It did not meet any of these targets.

One of the other loopholes FDIs has been exploiting is that they highly under invoice export price. They usually have subsidiaries or a mother company operating abroad. So they export the clothes to them, with fake price documents. These investors also import raw materials only from those mother companies or subsidiaries abroad. The FDIs operating in Ethiopia do not want to use local inputs. They export t-shirts with USD 60 cents from Ethiopia. But the buyer abroad, which is affiliated to the FDI, resells it at a much higher price. So the FDIs generate meager forex for Ethiopia. Their bank statements also indicate loss, always. Especially the expats brought by FDI are highly abusive. Bmet’s former CEO has been paid 500,000 birr in salary monthly. This is excluding housing, vehicle and other accommodations. Now we decided to reduce expats inflow.

That is why, just when we started being strict on Ayka Addis that the Turkish investor’s fled Ethiopia immediately, without handing over the project’s properly. I think they left for Burkina Faso.

Are there new public financial institutions planned to be established, particularly to finance long term development projects?

Four years ago when the bank was in deep trouble, we conducted a study to determine its fate. One of our alternative recommendations in the study was to breakdown DBE into three different policy banks; into an industry bank, agricultural bank and an SME bank. Finally, a decision to reorganize and reform DBE as it is was made. In the meantime, we conducted a study to renovate the bank; the ATA was also making moves to initiate the establishment of an agricultural bank.

The initiative to establish a stock market was also conducted by us. We have been trying to convince the government to establish a stock market for the past eight years. It is only realized under Abiy.

Now, the importance of an independent agricultural bank and investment banks is imperative for Ethiopia. In line with the agricultural bank, agricultural insurance and micro-insurance firms are necessitated equally. These firms protect the loans provided by the agricultural bank to farmers.

We conducted the “Proposal of restructuring public banks” in 2014. The proposal included the recommendation to determine the fate of the former Construction and Business bank (CBB). We did not just demolish CBB without a proper study.

The same studies have later been modified for the DBE. The modified study also recommended the vitality of Agricultural Development Bank, and mortgage bank (construction bank). The plan is for the CBE to stop mortgage financing, and transfer the role to the new Construction Bank (CB). In fact, the proposed CB partly takes on the role of the now defunct CBB.

Currently, we have established two working groups at i-Capital Institute, studying on investment bank and the agricultural development bank each. PEHA has the mandate to give birth to new public enterprises, apart from managing the existing ones. It can also decide on mergers, and dismantling of SOEs.

As long as Ethiopia is progressing from an agrarian economy to manufacturing, a stock market is very essential. If we need more robust manufacturing companies, we must build a robust stock market, where the companies are listed, float shares, and mobilize capital. A manufacturing industry cannot grow without a stock market.

The banking sector fears to give loans to manufacturing industries because the banks fear losing their saving capital. Once the stock market is active, the interest in banks will drop. But the stock market will grow faster, hand in hand with manufacturing.

I hope the establishment of an agricultural bank is realized soon. Ethiopia has an agrarian economy. But the economy is currently distorted, as the service sector constitutes the largest portion of the GDP. In a bid to transform Ethiopia’s economy from an agricultural to a manufacturing industry, agricultural development bank cannot be an alternative. Agriculture is not developing due to lack of finance, fundamentally.

The agricultural bank also needs an insurance firm, to cover the risks of the loans. The bank finances tractors for the farmer, and then the insurance firm insures the machines as well as the harvest. It is highly imperative that agricultural development bank and investment banks are essential for this country.

A secondary market cannot operate without an investment bank. Since we are nearing the establishment of a stock market, we also need to establish an investment bank.

For instance, banks are planned to be listed on the stock market. The investment banks will study the banks, as well as other IPOs, inside out. So, the investment banks determine the exact value of shares, and securities. This means IPOs, including commercial banks, cannot determine the price of their shares by themselves, unlike now.

The underwriter preserves the interest of every stakeholder, investor, IPOs, and others. It sets standard but the investment bank cannot be listed on the stock market itself.

Once the two working groups wrap up their studies, the documents will be reviewed by stakeholders. Then, we will present the final documents to the government to decide on whether to drop or implement the study’s recommendations.

A few years back, we travelled to Nigeria to visit their central bank and development bank and took three months of training. I was amazed by their Islamic insurance. We extracted lessons and brought it to Ethiopia.

The government is saying the banking industry will be opened for foreign competition very soon. What is your take on this?

Before, we have been asking the government to open the banking industry. But recently, we have changed our perspective. We prefer the government to delay the opening up for now. I precisely know the exact capacity of each local banking institution.

Before, our assumption was that local banks will merge, at the face of an open up. So we have been advocating for it to open, at each meeting and financial summits.

Basically, banking and insurance businesses in Ethiopia is a captive business. The banks are formed either under religious, ethnic, political sentiments or other bands. So, Ethiopian banks and insurance companies lack the business mentality. If they had a business mentality, they will work with anyone who has a viable business idea. So I believe the government must delay the sectors opening up.

The NBE recently said mandatory merger and acquisitions will be forced on local banks, when the sector is opened up.

That is inevitable once the industry is opened up. Of course mergers can happen even before the opening up. For instance, the NBE raised the paid up capital to five billion. Those who failed to meet will have no option but merge. The NBE can also raise the reserve let’s say to 25 percent, from the 10 percent currently. Many banks could have merged. This way, competitive banks could be created.

Western banks, especially Europeans, strongly pushed Malaysia, Korea, South Korea, and Thailand to open up their financial sector. Once these Asian countries opened their financial industries, the western banks withdrew after joining the sector. The Asian economies were hit by financial crisis as a result.

But eventually the Asian tigers avenged the western banks. The 2007 financial crisis hit western banks, because the Asian tigers suddenly raised their banking capital. They intentionally gave more loans to American banks. Then the American and European banks disbursed those loans to mortgage, and small businesses. The western banks failed to pay their loans to the Asian tigers, taking revenge twenty years after the western banks played foul.

We do not need such turf wars.

The only reason Ethiopia’s economy is doing well after the war in the past two years, is because our financial industry is closed off. Our economy survived because the banking sector is not open.

If banking was opened to foreign competition, the economy could collapse, under this war. And had it been opened before the war, the economy would have collapsed by now. Foreign banks simply close and leave, when there is a war.

Many people say the banking industry should be opened. That is wrong. They do not know the exact capacity of local banks in surviving foreign competition. I have no confidence even in the CBE.

The CBE has a huge NPL owed by the government. The government owes over half a trillion birr. Unless it is fully paid, CBE will face many challenges.

So, I insist the banking industry should not be opened at least in the next three to four years. Local banks need up to four years to prepare. Mandatory merger is simple.

When the Home Grown Economic Reform was launched in 2019, the government promised to reduce the states hand in the economy, and reduce the pressure on CBE and domestic credit. Is there any progress?

The CBE is not giving loans to the government now. State pressure is reduced. The CBE has studied new organizational structure, and is implementing new business strategies. Before, especially during the previous regime, state banks give loans as if it is a budget. They do not collect the loan.

Do you follow up on CBE’s branches abroad?

We evaluate them during reporting. The bank has branches in Juba and Djibouti. The Juba branch is performing very well but the Khartoum branch was suspended while in the pipeline.

Did the CBE move from PEHA’s supervision, after it is placed under the EIH?

Currently, the CBE is in transition process, from PEHA to the EIH.

I heard SOEs will be categorized under three supervisory institutions according to their performance. These are the EIH, PEHA, and the LAMC. Is that true?

What I know is that there are SOEs going to the EIH, and the rest will remain under PEHA. The LAMC by itself is an SOE and is under PEHA’s supervisory. LAMC is under my supervision. The CBE, DBE, EIH, LAMC and national lottery, are under my directorate.

The EIH has recently on-boarded 27 SOEs, out of the 36 SOEs under PEHA. Does that mean they are completely out of PEHA?

The investment part of SOEs goes to the EIH, while the enterprise management aspect remains under PEHA. But so far, there is no definite decision on whether the selected SOEs completely move to the EIH, or partially. This is decided by the macroeconomic team of the PM.

Will all SOEs be listed on the stock market?

The plan was for the SOEs to list a certain percent of their value on the stock market. If SOEs like ET, ethio telecom and others trade 10 percent of their portion on the stock market, it builds the public’s confidence. But SOEs must meet stringent financial reporting systems.

I also hear that five percent of ethio telecom’s share will be sold on the stock market. SOEs that meet the right financial reporting system will be able to float shares on the stock market.

People are facing difficulties acquiring houses because real estate companies collect money from house seekers and disappear. The stock market will also solve this. Everything will take shape under the secondary market.

The government is allowing the establishment of new banks in the last two years. But lately it confirmed the opening up of the banking sector for foreigners. Isn’t this sending mixed signal?

Mergers can be done at any time. Then local banks can consolidate and ready for competition. PEHA is exemplary in merging CBB with the CBE six years ago. Private Banks must follow suit.

Local banks are in a comfort zone, registering lump profit, not because they are providing a class service. They are profiting because they are protected. Under state protection, they do not have to improve service. They survive at the expense of the client. Millions are saving in bank but only a few thousand get loans. All of this will change, once foreign banks come.

Yesuf Ibrahim is a founding member of the National Movement of Amhara (NaMA). He worked as the head of the strategic sector in the earlier stages of NaMA’s establishment. After its establishment, he worked as the head of the strategic sector for two years. After serving the organization as a vice chairman, he is currently working as the head of the party’s legal and ethical regulations and as a manager of the government’s property management authority. He received his LLM degree in law from Addis Ababa University and has worked as a law lecturer at a university. The Reporter’s Selamawit Mengesha sat down with Yesuf on issues concerning the party, region and the country at large.

The Reporter: How would you describe your participation from the time you first started working with the government as an opposition party, and the process until you became the manager of the government’s property management authority?

Yusuf Ibrahim: I have been heavily involved since the establishment of NaMA until its present stage. NaMA’s ideology is not an organization that paints itself as a liberator. It is synchronized with the people and the country.

Because the Amhara people have special problems and are being attacked by the constitution and narrative, protecting the people is one of the political targets. However, we have come to the historical notion that the attack on Amhara people is not something that has a special historical origin but an effort to destroy the country by making the community a victim.

The movement is one that could be traced back to colonialism. Weakening the beliefs, values, and social status of this community can be a way to destroy the country. Its origin is a colonial idea. Because of this ideology, a number of internal anarchist institutions were created.

By establishing such organizations, a political party based on identity has been established over time to save the Amhara people, who have suffered a lot. When the government moves into the phase of “change”, it is important to try because “change” has not yet been seen. When we look at the power alignment in Ethiopia, it is not a place where NaMA makes friends easily. In the course of time, after studying the intricate web of power, we analyzed the power that could become the friend of the enemy.

Compared to that, even if we can’t get along with everyone, we can work with anyone. As for figuring out to what extent and with whom, there are those who are known for backstabbing, so that’s a start. It was a timely analysis that was not particularly favorable to the Amhara. Therefore, it was established to fight anti-Amhara organizations.

Currently, even though it is an institution with many problems, we have an organizational position supported by a strategic document that we must work on together with the government. In general, it is necessary to work together with the government. When elections were planned to be held during COVID, there was pressure from many political organizations. Working together with the government was our own initiative.

We asked ourselves how we could safeguard the long-term interests of our country and people. We are a political organization and we take a position based on who we believe will betray us. We do this within the bounds of the law. It is necessary to work together with the government. They did not try to make it as big as NaMA, but there was pressure from other parties to make NaMA a part of the government, but the government did not want that. Regarding this, we explained to them that Prosperity is a traditional government.

This showed that the government was not proactive and did not identify its partners. As a party, it contributes greatly to the work of saving the country. We believe that we have especially united the people.

During this process, there was a conflict in the nature of misunderstandings between various issues, and because the problems of the parties and the government were not resolved quickly, it started to turn into a war.

With all of that happening, it was important to work with the government during that period. But keep in mind that working together with the government does not mean that we are the government but, in some cases, groundwork needs to be done. We had the idea that politics based on cooperation, not competition, was best suited for the landscape of the country.

Since the NaMA did not have a clear idea about working with the government (that is, we joined the government while the country was at war), we discussed it twice with the government when the issue was raised.

The matter has been tabled at the executive level. But it was fundamentally ignored by NaMA.

When the authority was given, I was called on the phone. I arrived in Gondar at 5 o’clock in the morning and was told that the appointment would be at 7:30. They have their own reasons for doing so. Since the appointment process was during the war, it was completed in secret until the end so as not to overwhelm the government.

On the side of the Prosperity Party, there was a bit of a misunderstanding because I received a call from the Addis Ababa city administration and then, on the same day, I received a call saying that they were looking for you for an appointment in the Amhara region; I made my own decision and chose Addis Ababa.

There is no problem with opposition parties working with the government. In Ethiopia, the process of democracy should gradually develop over time. Democracy needs to be improved by learning to work together.

In fact, it would be great if NaMA worked with the government. It would have been helpful if the lower level of government was more involved in areas such as kebeles and districts.

I made a proposal that if the government does not give us authority on the lower structure, we should give up big authority positions. But the party was not unified and could not consider the proposal.

NaMA is a party established to represent the people of Amhara. The Amhara people want you to be the voice of your party in any way. Working with the government means leading a multi-ethnic population, and haven’t you faced challenges in the middle?

This is also an issue of the reform process that the party intends to follow. The reform will work to clarify which level and which concept we are working on. There might be some changes in concept with the change of leadership.

It is about continuing to explore our strengths and solving our problems. The government does not exist only through the executive branch. The government has three branches and includes Parliament in the constitution.

We have representatives in the federal parliament in the state. The relationship between the party and its members at the top should be defined. As a party leader, when we work with the government, it must be based on the party’s principles. If I am going to move in that way, we should either leave the party or leave the leadership of the government.

There should be a strict procedure. In the current state of affairs, the federal structure that our party and the country are led by all is based on ethnic lines.

The constitution itself rarely even uses the word “citizen.” We want this to be liberal over time. We follow the philosophy that individual citizens should be the foundation of democracy. We want our organization to be a center for correcting the many mistakes made by extremists.

It should not be restricted only to Amhara. It should also be connected with other communities. Once this is fixed, the Ethiopian status will be announced. We believe that when we work as a party and as Amhara, we are operating as Ethiopia.

The Amhara community is the Ethiopian community. It has been pushed by many things. We are not saying it should be paid by revenge. We only remember the past to be able to fix the future. We do not believe that our people would be harmed if equality and freedom prevailed in Ethiopia. This is a modern principle. I do not believe that I am an advocate for the politics of a community at any time. As a company, we believe that we work for all Ethiopians.

It is one of the pillars of our society that it should not be affected by special circumstances. We want to be seen from the Ethiopian perspective. We do not want to separate Amhara. We want it to be governed by justice along with its fellow citizens. Amhara is affected in the same way that the rest of society is, but the incorrect narrative that has developed over time must be corrected. The question of who is the representative of political philosophy is bound to arise. Since NaMA is of Amhara origin, it is organized accordingly.

It is necessary to adapt to solve this problem for the time being. I think NaMA can adapt to all the parties. While working here, I am color-blind. I have neither the capacity nor the desire to take sides by saying who belongs to which nation. I also do not share such political views. We think that the perceptions created on us by the TPLF is in conflict with the people of Tigray. This is because the TPLF has been equating itself with the people of Tigray. But we still see their segregation. We believe that the TPLF is a criminal group. During the century, narcissistic institutions were created to hold back society and live for profit.

A while ago, it was tiring to find the issues that separate the people of Tigray and the people of Amhara. It was bound by various social, geographic, religious, and economic ties. We have to solve the existing problems with different justifiable methods. As it is known in Ethiopia, we do not accept ethnic politics. Therefore, I am running the people’s question in alignment with the government’s work.

Is there a division between the leadership of the government and other members of the party? What kind of situation is NaMA in right now?

Currently, changes are made every time political dynamism changes. The struggle is that when more energy is needed, society needs change. We have gone through many problems in our struggle for organization and society.

As the country’s problems continue to expand, members of the family are always at war. Therefore, leaders and members do not meet regularly. NaMA’s children are dying on the war fronts.

Don’t ask me how a peaceful party can fight with weapons. Since the declaration of seclusion, there has been a call to participate in the war. War has been waged on the Amhara people directly.

There are NaMA members in Raya, Wolkait, and in all the districts where there were members that were killed while in command of the brigade. There are several fighters in the structure. Therefore, the central one, the one at the top of each leadership, and the one at the bottom are not formally connected; we are connected informally.

During the second round of fighting, the party did not have a central committee or executive meeting for four months. Many gaps were created during that time, and it is not possible to update regularly. Politics brings the change of opinion closer to you when you meet and update regularly.

However, the more it is separated, the more the case is defined. So far, we’ve been supporting the idea that had majority support in debates. I have never seen a decision made without the approval of NaMA members.

Because we do not meet regularly, we have lost the opportunity to make decisions through debate and consensus. There were talks of NaMA coming into government appointments without the party’s consent, but in the process, although there were violations of discipline, the matter was adopted at the central committee level and this concept of working together will hopefully continue in the future.

The forces that wanted change were created in NaMA. First, there was a question that you should not lead the party part-time while in government, as the party requires a full-time dedication.

We will restructure. The party is a movement, and a movement needs to open up. It is not just a random party in power. Until the struggle reaches a certain level, the movement will open its doors and attract new talents, and it is not feasible to say that I will remain on the throne of the establishment once it is over. It is not correct, and it is not the principle of our struggle either.

People feel worried if there is no open discussion. There will be people who want to make the party a powerhouse. But in the end, the contradictions could not be easily reconciled.

On the other hand, it has shown differences in the way we see politics. But it is only in the top management that the difference should be noted. A certain difference was created between the Central Committee and the Executive Committee with only 10 to 20 people. There is no difference in the bottom structure of the broad members.

Due to Bahir Dar’s protest, I resigned on my own accord and changed from the position of vice chairman to the law department. What the party wants is not the change of one person or two. They say the movement wants to change from top to bottom. And this is their right.

An inquiring generation should be encouraged. There were misunderstandings with the top management. It deviated from NaMA and the general concept of democracy, which did not accept the reform and were going through a process that did not encourage internal democracy.

It is not a question of whether we like or hate individuals; it is a matter of history. It is the struggle of our people. It doesn’t define division for me. It is fundamentally settled by law. The structure is not split.

The main foundation is structure. I don’t think that the creation of division in the leadership of two or three people will divide the structure. We intend to hold a general assembly by October, which will hopefully restore NaMA.

Will the party become more organized by resolving the controversy within NaMA?

NaMA will come prepared. This happens at any party because it is a massive collection. The party needs time. The fight will then go into negotiations. The negotiation will be based on the concept of transitional justice from our point of view. There are a lot of processes that go through both material and human life. All of that should be resolved.

Politically, where are we going? Where are we going as a country and what is our collective ambition? NaMA must be prepared for this soon.

There are those who have applied what we brought as an idea to Ethiopian politics, which shows NaMa’s power to exert great pressure. After many pushes, debating and explaining to the people of Ethiopia, if politics is about to bear fruit, it will not happen unless the party exists.

There may be individuals with egos within the party leaders. They should be dealt with on the inside first. We were hoping that it wouldn’t show on the outside.

Most of the leadership and central committee members have petitioned the General Assembly’s request. A petition has been filed for reform. Yet undisciplined work is being done against the will of the people and the structure of the organization. That should be corrected. They are all being looked at from every angle.

Let us come to the current national issues. We have been at war for the past two years. Various efforts have been made to resolve the war peacefully, but another war broke out. Can you explain to us the whole political process and what Ethiopia’s politics should be in the future?

NaMA wants Ethiopian politics to be based on citizenship. Ethnic politics means a gathering of extremists where everyone who is offended hides. The TPLF and ONG should be held accountable for the Ethiopian-ism they attacked. It is a country known for caring and living together. Politicians must engage in a certain strategy. The structure should not be manipulated as intended.

NaMA will always cooperate with forces that can weaken the TPLF. As the TPLF has been in politics for a long time and has led the country, it must correct the mistakes of the past by deciding which is the most viable path for the future. They could not think of a way that would benefit the people of Tigray, whom they think they represent.

I do not think that the separation of the Amhara and Tigray peoples, a society that has lived together for many centuries and is bound by religion and culture, will achieve the goal. The people of Tigray must show that they are not enemies to the Amhara community.

During the war process, NaMA has been doing many other things by standing with the defense force, delivering food and coordinating with the diaspora. When the Amhara region was in battle, it gave studies on why they should fight for a purpose. It was heavily involved throughout the war.

How and under what conditions do you think the negotiations should be conducted?

Conflict always ends in negotiation. Even if the TPLF itself thinks that we should be divided, it knows that they will lack both resources and manpower. The TPLF should not go any further on the path of brutality and revenge. Ethiopia should follow the liberal approach and solve its problems. The war against the TPLF was not for revenge but was brought on by themselves.

In my view, I want transitional justice to happen. It is not because I believe transitional justice would calm everything down, but because it is an option. Justice is being served now, not for revenge but to bring harmony and move forward.

Negotiations should be conducted for the sake of peace and justice, with the decision that it will not happen again in the future and that what happened in the past was not right.

But in Ethiopia, it is seen that negotiations are used as a plot resource. It has been observed that only if the power to be negotiated is dangerous and one party wants to survive, is the proposal submitted for negotiation.

That is why I am afraid that the proposal presented by the TPLF might be some sort of treason. The deal requires a genuine broker. Since the war will inevitably end in negotiations, it all depends on who comes up with the better negotiating package. There is a risk that the negotiator who believes in violence may resort to violence at the negotiating table.

The TPLF should not exist as a political force. It is difficult to say that the TPLF is deceiving all these people with mobilization. I think most of them believe it. While the party was scattered, the individuals in the party lined up, reorganized, and attacked the defense force.

Such regeneration should not be ignored. The security guarantees should be adjusted and then they can enter into negotiations. A ceasefire is one way it can be done. But beyond that, there must be other stakeholders. The negotiations that should have been entered into after the collapse of the Derg left us in the situation we are in now. I believe that the Amhara region should have a negotiator on their behalf.

In the end, it should be known what level our politics should be at. Any person should be able to go and live in the area they want without being displaced from place to place because of ethnicity.

The TPLF has the capacity to rebel, not organize and re-enter. War itself should not be based on ethnicity. Who will benefit from this war?

There is no need to pretend like there is a war between two different countries. Both must work together. The negotiations must be conducted in moderation. Negotiations range from a ceasefire to a new proposal.

Although the African Union has little experience, it must mediate. They should all enter into the negotiation with good intentions. The very idea of secession is unethical.

To allow foreign banks, the banking proclamation, banking service code and the investment regulations must be revised. Especially, the code must allow banking for foreigners. The existing commercial code allows banking and insurance only for Ethiopians. Non Ethiopians cannot be investors, or operators.

Do you think the financial sector will be opened before five years?

I think so but I prefer it being delayed. All banks are giving loans to the service sector. Manufacturing and agriculture cannot grow unless we have banks that can give loans for long term projects. There are no consumer loans too.

Insurance companies complained over NBE’s order to direct 15 percent of their profit to DBE bond.

The rate has been reduced lately and the insurance companies agreed.

We must draw lessons from countries that have bridged the gender gap successfully. In some institutions, they say there are no women qualified to be board members. That is wrong.

Circulation of privately-owned papers is small and usually limited to Addis Ababa. Readership numbers are low.

A number of newspapers are now available online.

Ethiopian Reporter Business Page

MEDIA AND COMMINICATIONS CENTER (Ethiopian Reporter)

Media and Communication Center (MCC) a private limited media company established in 1995. Headquartered in Addis Ababa, Ethiopia MCC is the publisher of “Reporter” a bi-weekly Amharic, “The Reporter” a weekly English newspaper, a monthly Amharic and English magazines in both print and electronic versions.

Staff

MCC employs 137 permanent and part-time staff and has a sister company called the Horn of Africa Press Institute, which does research on Media related issues.

Mission and Vision

The Reporter’s motto “Free Press, Free Speech, Free Spirit” expresses the ideal of freedom that, journalists and editors, hope to enjoy and promote professional journalism.

MCC believes that it has responsibility to readers, the public, the people in and outside Ethiopia who rely on Reporter for news.

Each week we bring to the public critical stories without fear or favor and guarantee that our editorial choices about what to print are based on the importance and relevance of the topic to our country along with journalistic qualities. We refrain from any political, economic, or other unethical motivations.

We dedicate ourselves to help our readers in their effort to become an informed citizenry by giving as much information as possible.

We serve as a platform for the public’s thoughts, opinions and ideas by soliciting, accepting, reviewing and publishing letters and comments.

We intend to make our newspaper a model for those in our profession, a guide for novices.

Circulations and Reach

MCC distributes the newspapers and magazines to all business companies, governmental offices and non-governmental offices in Addis Ababa and all regional cities through subscription as well as street vendors.

Readers can access our news on our websites www.ethiopianreporter.com and www.thereporterethiopia.com and Reporter Tender Website www.reportertenders.com can download our apps from iTunes store and Google play to use on their android and IOS devices.

ሪፖርተር ዜና Media and Communication Center (MCC) a private limited media company established in 1995. Headquartered in Addis Ababa, Ethiopia MCC is the publisher of “Reporter” a bi-weekly Amharic, “The Reporter” a weekly English newspaper, a monthly Amharic and English magazines in both print and electronic versions.

Mission and Vision

The Reporter’s motto “Free Press, Free Speech, Free Spirit” expresses the ideal of freedom that, journalists and editors, hope to enjoy and promote professional journalism.

MCC believes that it has responsibility to readers, the public, the people in and outside Ethiopia who rely on Reporter for news.

Each week we bring to the public critical stories without fear or favor and guarantee that our editorial choices about what to print are based on the importance and relevance of the topic to our country along with journalistic qualities. We refrain from any political, economic, or other unethical motivations.

We dedicate ourselves to help our readers in their effort to become an informed citizenry by giving as much information as possible.

We serve as a platform for the public’s thoughts, opinions and ideas by soliciting, accepting, reviewing and publishing letters and comments.

We intend to make our newspaper a model for those in our profession, a guide for novices.

Circulations and Reach

MCC distributes the newspapers and magazines to all business companies, governmental offices and non-governmental offices in Addis Ababa and all regional cities through subscription as well as street vendors.

Readers can access our news on our websites www.ethiopianreporter.com and www.thereporterethiopia.com

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Policy caps foreigners’ acquisition in local banks to 40 percent

Local banks have less than one year to prepare

With an additional five percent stake allowed each for foreign individuals and foreign non-bank investors, the maximum stake local bank can sell to foreigners is capped at 40 percent.

Nigeria has confirmed that Ethiopian Airlines has been chosen as the core investor and partner for the country’s new flag carrier. Nigeria Air has been in the works for a while now and has slowly been approaching a full launch, pending support from partners. Ethiopian is Africa’s largest carrier and has shown a willingness to invest in new startups recently.

Foreign banks are allowed to acquire up to a 30 percent stake in local banks, according to a policy document approved by the Council of Ministers last month and obtained by The Reporter.

With an additional five percent stake allowed each for foreign individuals and foreign non-bank investors, the maximum stake local bank can sell to foreigners is capped at 40 percent.

Licensing foreign banks and implementation of the policy is slated to kick off in one year’s time from the ratification of the Banking Business Proclamation, whose amendment is already underway.

The highly confidential policy document has been off limits. The policy also excludes insurance and microfinance from the open-up initiative. It allows foreign banks to open a subsidiary firm and open branches in Ethiopia, besides giving an option to buy shares in local banks.

An NBE official that spoke to The Reporter confidentially stated that the window period for local banks until the liberalization takes off might not necessarily be one year.

“The Amendment to the Banking Business Proclamation is finalized and ready to be sent to the Council of Ministers. Most certainly, the proclamation will be approved in the current 2022/23 Ethiopian fiscal year. The licensing of foreign banks will start after the amendment of the banking business proclamation is finalized,” the official said.

The official believes that once the proclamation is amended, regulations and directives will follow, which can take six months or a year.

“We cannot say definitely that a bank will be opened up one year after the proclamation is finalized. It depends on our pace of finalizing the proclamation and the regulations and directives required to implement it,” the official added.

Foreign banks are also authorized to open a commercial representative branch in Ethiopia, a permit that was already given to some multinational lenders like Standard Bank, Egypt’s Commercial International Bank (CIB) and KCB Group.

The opening-up policy document was not revised after the Council ratified it. Comments forwarded by the Council are also not included, according to The Reporter’s sources.

The NBE will decide on the majority of the details regarding the implementation of the opening-up policy with the details to be stated in the upcoming proclamation, regulations, and directives, according to the NBE official.

“The policy is more of a broad perspective. Foreign banks, individuals, and strategic investors are allowed, but the exact ratio will be determined. Changes to investment regulations are not always necessary. The banking proclamation is sufficient by itself,” added the official.

Local banks are already in hot water since the Council of Ministers disclosed the approval of the open-up policy last month. Presidents of local banks The Reporter talked to, who did not have access to the policy documents so far, argued most of the decisions stated in the policy document.

“Of the four modalities, subsidiary and branch will have no benefit for Ethiopia. They are the biggest lunacy of Ethiopian government decisions. They will neither bring foreign currency nor improve the efficiency of Ethiopia’s banking industry. The government is wrong to assume local banks lack corporate culture and skills. I am sure if academicians and banking practitioners see the policy document, they will not approve it,” said a private bank president with two decades of experience.

He says the government committed two major breaches. “First, the government did not identify what it was really seeking to do to open the banking industry. Is it foreign exchange revenue, access to finance, efficiency, technology, or others? Then the government should have done intensive studies to determine which venue is suitable for that objective,” the bank president said.

“Secondly, the government did not discuss it with local banks and other stakeholders. The NBE did not discuss anything with us. The policy document is still kept a secret even after the Council approved it. It must be posted on the council’s website as soon as possible,” the president added.

Another bank president appreciated the decision to cap foreign bankers’ acquisitions. “Capping maximum equity local banks can sell to foreigners to minority shareholding ratios is very good. It will protect local shareholders and maintain the rights of local bankers. The issue with this equity acquisition is that there is no system in place to assess the value of local bank shares.”

“Since there is no stock market in Ethiopia, valuation of local banks is done traditionally. None of the local banks are listed on any stock market. The existing share market valuation system is traditional. Currently, shares of each of the local banks do not reflect the exact values. So there must be a new valuation system,” said the bank president.

On the other hand, he contends that valuing local banks at a time of peak birr depreciation will be detrimental to Ethiopia but beneficial to foreign banks and investors.

“The valuation will be high in terms of birr attributable to the devaluation. But in terms of dollars, the value is not large. Therefore, foreign banks and investors can acquire the stakes at a cheaper price in dollars. The injection of foreign banks into local banks will escalate inflation in Ethiopia because foreign investors will buy the shares with forex. But that forex is injected into the economy in birr, which is high in number. So the immediate impact of the banking opening-up will be higher inflation. I do not understand why Ethiopia keeps devaluing Birr,” he added.

The bank president also appreciated the one-year window period for preparation but questioned why private local banks have to work with the NBE to devise their competition strategy.

However, all the bank presidents rejected the government’s decision to ratify the open-up policy document without consulting them.

“The NBE did not even discuss with us the Banking Business Proclamation amendment underway, let alone the new policy. Many laws were introduced without consultation with bankers and have proved harmful to us. I understand the political and diplomatic benefits of this policy, which is why the Council hurried to ratify it without consulting us,” added the banker with two decades of experience.

For him, the policy is made to appease western countries, which are pressuring the government.

“Banking opening up is not as simple as opening up telecom, aviation, or any other sector. Ghana and Kenya sold their banks and became poor, overtaken by India, Pakistan, the UK and other countries’ banks. Many other countries, including in Africa, opened their banks after intensively deliberating on it and preparing a detailed catalogue of the modalities,” said the banker. “Nigeria, Ghana, Kenya, South Africa, Morocco, and Egypt all opened their banking sectors after much deliberation. Not all of these countries were successful after opening their banks. Unless wisely managed, this opening up will also make Ethiopia poor,” he added.

Ethiopia has canceled its contract with a Chinese company exploring oil and gas in the country since 2013, the government announced on Wednesday.

Takele Uma, Ethiopia’s minister of mines and petroleum, said the deal with Chinese firm Poly-GCL was called off because of its “financial and organizational inability” to develop gas in the Ogaden Basin, a resource-rich area in eastern Ethiopia, according to state-affiliated news agency Walta.

The report said Poly-GCL was issued a letter of ultimatum in March that listed several conditions for the company to fulfill.

“In accordance with the successive notices the Ministry has issued in the past and in full compliance with the PPSAs and the laws of the land, the termination has now been fully effected,” Takele said on Twitter.

“As long as the financing that would enable to develop the oil and gas fields the Ministry is open for mutual and expeditious settlement,” he added.

Takele had previously hinted that Poly-CGL’s contract would be terminated, saying that Ethiopia was actively searching for international companies that could develop the Ogaden’s confirmed reserves of 7 trillion cubic feet of natural gas.

Nigeria has confirmed that Ethiopian Airlines has been chosen as the core investor and partner for the country’s new flag carrier. Nigeria Air has been in the works for a while now and has slowly been approaching a full launch, pending support from partners. Ethiopian is Africa’s largest carrier and has shown a willingness to invest in new startups recently.

Ready to take off?

According to ThisDay, Nigeria’s federal government has formally chosen Ethiopian Airlines (Ethiopian) as a partner for the long-awaited Nigeria Air. The deal includes a 49% equity share for the airline, joined by 5% from the government since the project is set to be private-public. Notably, Ethiopian is sticking to its policy of not investing cash into a new business.

Instead, the airline will leverage its technical prowess, an abundance of aircraft, and management skills to establish Nigeria’s first flag carrier in years. While yet to be formally confirmed, an initial pool of pilots is set to arrive in Addis Ababa for basic training for certification on the Boeing 737NG.

Nigeria has confirmed that Ethiopian Airlines has been chosen as the core investor and partner for the country’s new flag carrier. Nigeria Air has been in the works for a while now and has slowly been approaching a full launch, pending support from partners. Ethiopian is Africa’s largest carrier and has shown a willingness to invest in new startups recently.

Ready to take off?

According to ThisDay, Nigeria’s federal government has formally chosen Ethiopian Airlines (Ethiopian) as a partner for the long-awaited Nigeria Air. The deal includes a 49% equity share for the airline, joined by 5% from the government since the project is set to be private-public. Notably, Ethiopian is sticking to its policy of not investing cash into a new business.

Instead, the airline will leverage its technical prowess, an abundance of aircraft, and management skills to establish Nigeria’s first flag carrier in years. While yet to be formally confirmed, an initial pool of pilots is set to arrive in Addis Ababa for basic training for certification on the Boeing 737NG.

The next few months will tell us more in terms of the airline’s timeline for takeoff. With a fleet of Boeing 737s and Dash 8s, we can expect a domestic and regional focus in the initial months, a market that has no shortage of travelers in Nigeria. Keep an eye out for this up-and-coming carrier in the near future.

Mesenbet Shenkute Re-elected to Lead Addis Chamber for Second Term

The one and only mortgage bank, Goh Betoch Bank, concludes the financial year with bright books, meanwhile it in fact operated for few months.
The bank which officially opened its doors on October 25, 2021 disclosed that the financial year that ended on June 30, 2022 was primarily used to finalize the formation process and create operational capacities like recruiting personnel, providing trainings, emplace core banking and data center facilities and others.
In the first months, the mortgage bank was also fully working on a five year strategy that was conducted in collaboration with HST Consulting PLC, a prominent consultancy firm.

Mulugeta Asmare, founding President of Goh Betoch Bank, said, adding, “We have also provided services to customers and have been able to mobilize deposits, provide loans, as well as facilitating some other operations like forex.”

The bank that has four branches including the one in Dire Dawa began providing loans in the fourth quarter of the financial year and disbursed over 300 million birr in this short period, while the deposit mobilization was about 260 million birr.
62 percent of Goh’s deposit mobilization is tending to savings for mortgage, which is its specialization even though it provides other basic commercial banking services.

In the financial year under review, the bank was able to conclude under a positive balance sheet, which is not common in the sector, “Compared with the period where we commenced our real operations, such types of success is quite rare.”
“We have been working to manage our expense. Thus for the closed period, we have attained to cover our costs including organizational expenses that were incurred starting from the under-formational processes, which started in 2019,” the President said.

“Despite working for a few months under limited scale, our income has surpassed the expenses, reeling in profits of 6.3 million birr,” he explained.
As a mortgage firm, the bank may not have a priority to run extraordinary ways of opening branches and in the current financial year it has targeted to double its branch number to including major cities like Hawassa and Bahir Dar.
Currently, the bank that has 127 staffs has four branches in Addis Ababa and Dire Dawa.

The Reporter Ethiopia

Patrick Hicks is a born-and-bred Texan from Waco. Fasicka Hicks is from Addis Ababa, the capital of Ethiopia. They met in 1997 after she immigrated to Texas.

Both of them liked to cook, and Patrick’s barbecue became a favorite of Fasicka’s Ethiopian family. Seeing her family’s delight gave Fasicka an idea.

The idea soon blossomed into Smoke N Ash, but it remained traditional Texas BBQ until 2019 when Fasicka decided to add Ethiopian options to the menu — and they soon became popular items.

With customers enjoying the two tastes together, the couple decided just having the meal share the same plate wasn’t enough. They decided to combine the flavors in the same recipe.

“And I was tellin’ him, ‘Hey, you know what? We can make money sellin’ this food.’ So we bought a trailer and made some extra money on the weekends. Before we know it, we start forming lines because people look forward to our cooking every weekend,” Fasicka recalled.

To guarantee authenticity, Fasicka’s sister gathers Ethiopian spices in Addis Ababa and ships them to Texas—the result is perhaps the only Ethiopian-Texas barbecue on the planet.

The Texas-Ethiopian platter is the signature dish at Smoke N Ash. American barbecue staples like brisket to catfish to Texas toast, as well as Ethiopian dishes like chicken doro wat are on the menu.

The couple says the success behind their restaurant isn’t the food but what it means to them.

“When it comes to food for me, it’s just about togetherness. You work on it with love and care, and you make it to be the best thing on the plate, on the table,” Fasicka said.

The couple says the success behind their restaurant isn’t the food but what it means to them.

“And I was tellin’ him, ‘Hey, you know what? We can make money sellin’ this food.’ So we bought a trailer and made some extra money on the weekends. Before we know it, we start forming lines because people look forward to our cooking every weekend,” Fasicka recalled.

Safaricom prepares to switch on Addis in early October

The amended National Payment Proclamation requires foreign and local fintech operators, including mobile money service providers, to pay a license fee regularly. The proclamation, which was passed by the Council of Ministers last month, is expected to be ratified once Parliament is back from recesses.

Officials at the central bank told The Reporter that “the amount is not fixed. It will be stated in the directives of the proclamation. We are currently finalizing the directive required to put the proclamation into effect.”

The amendment of the 2011 proclamation is necessitated to open the mobile money sector to foreign operators. This came especially after Safaricom Ethiopia requested to bring onboard its mobile money arm, Mpesa.

However, Mpesa, a Kenyan mobile money service provider awaiting the amendment of the National Payment Proclamation, is unhappy with the requirement for a license fee, sources close to the matter told The Reporter.

Mpesa is already undertaking preparations to enter the Ethiopian market after government officials gave the green light last year. Managers of Safaricom Ethiopia also confirmed to The Reporter that technical work is already afoot.

“Mpesa has already started building the backdoor software developments. At the beginning, Ethiopian officials told us there would be no license fee for Mpesa. But now, they are telling us there will be a license fee,” complained an official working with the Safaricom Ethiopia, linking the inconsistency with the ebbing Ethiopia’s forex reserve.

However Tewedaj Eshetu, public relations and communication manager at Safaricom Ethiopia, said, “We are waiting for the proclaimation to be ratified.”

Managers of local mobile money companies believe the license fee is a global trend and the amount is not as large as many fear.

“The NBE consulted with owners of mobile money companies before approving the amended Payment System Proclamation. Comments and complaints were included during the stakeholders’ discussion on the draft document,” said a manager of a local mobile money company.

On the other hand, Safaricom Ethiopia is currently preparing for a wide service provision.

Safaricom will launch commercial service in Addis Ababa at a national level in October, according to Tewedaj, though she refrained from disclosing the exact date.

However, sources close to The Reporter disclosed that the launch date is slated for October 6, 2022. A grand ceremony in the presence of higher Ethiopian officials and top management of the five consortiums of Safaricom Ethiopia Plc is expected to be held on the day.

Safaricom launched its first service in Dire Dawa town last month, with a plan to reach 25 cities, including Addis Ababa, by April 2023.

Ever since the start of a brutal war between the government of Ethiopia and the forces of Tigray People’s Liberation Front (TPLF) following the latter’s unprovoked attack on the troops of the Northern Command of the Ethiopian National Defence Forces (ENDF) based in the northern region of Tigray on November 3, 2020, Ethiopia has been subjected to an unrelenting campaign of hybrid warfare waged by a set of actors with vested interests. The campaign has comprised of different actions including an informational warfare depicting Ethiopia in a negative light, a coordinated diplomatic pressure aimed at coercing Ethiopia into submitting to the demands of the TPLF as well as imposing punitive sanctions on the country and withdrawing its benefits under the United States’ tariff-free African Growth and Opportunity Act (AGOA). Western governments and such institutions as the U.N., Western mainstream media, humanitarian aid agencies, human rights “defenders” and think tanks figure prominently among the slew of actors which have been involved in the grey-zone tactics being pursued against Ethiopia.

The latest example of the diplomatic pressure being brought to bear on Ethiopia is the release this week of a politicized report by the International Commission of Human Rights Experts on Ethiopia (ICHREE). Derided by any Ethiopians as a braze attempt whose overarching goal is to demonize the Ethiopian government, the ENDF, the Amhara Militia and Fano, the report’s “findings” gloss over documented atrocities perpetrated by the TPLF. The report says the Commission has reasonable grounds to believe that the ENDF and Eritrean Defense Forces (EDF) committed a catalogue of egregious crimes ranging from widespread extrajudicial killing and injuring of civilians to rapes and other forms of sexual violence against Tigrayan women and girls, and looting and destruction of civilian infrastructure. It also indicates there were reasonable grounds to believe that the Federal Government and allied regional State governments implemented a widespread range of measures designed to systematically deprive the population of Tigray of material and services indispensable for its survival, including healthcare, shelter, water, sanitation, education and food. As for the TPLF, it says Tigrayan Forces have also committed acts of rape and sexual violence, albeit on a smaller scale, and killed civilians and persons rendered hors de combat, looted, and damaged or destroyed civilian infrastructure and property in two towns in the Amhara region.

The ICHREE report is riddled with a raft of shortcomings that rob it of credibility. As the Ethiopian government says, “… the report was written in breach of all principles of professionalism, independence, impartiality, and standards of proof entailed in any such process under international practice”. The Commission, by its own admission, carried out a remote investigation into selected incidents and themes even as it excluded from its report the serious human rights and humanitarian law violations which could amount to war crimes and crimes against humanity in the Afar region. The omission of an entire region— whether by design, negligence or lack of capacity—from the Commission’s investigative work misrepresents the true state of things in the war-affected northern region of Ethiopia. It also constitutes a clear failure to “conduct a thorough and impartial investigation into allegations of violations and abuses of [international human rights law, international humanitarian law, and international refugee law in Ethiopia committed since 3 November 2020 by all parties to the conflict…] by building upon the report of the Office of the High Commissioner and the Ethiopian Human Rights Commission.” Moreover, the Commission’s use of language implying that the Ethiopian government has engaged in acts that may amount to ethnic cleansing is entirely unbefitting a human rights body and lays bare its political bent.

The Ethiopian government had rightfully condemned the decision to establish the ICHREE from the outset, describing it as being imposed on it without its consent and an unwarranted meddling into its internal affairs under the guise of protecting human rights. The Ethiopian Human Rights Commission also reserved criticism for the decision arguing the creation of a new body was repetitive, counterproductive to the ongoing implementation processes as per the recommendations of the joint investigation it undertook with the UN rights office into the alleged violations and abuses committed prior to the unilateral cease-fire declared by the Ethiopian government in June 2021, and further delayed redress for victims and survivors. In fact following the adoption of the joint investigative report, the Ethiopian government established the Inter-Ministerial Taskforce (IMTF) to comprehensively deliver on accountability and redress measures and initiated an independent criminal investigation. These flaws thus tends to undercut a fundamental principle of international law, namely that the primary responsibility for the promotion and protection of human rights rests with states themselves.

Western governments and such international institutions they control as the U.N. have a checkered history when it comes to the protection of human rights. Although they espouse human rights values in their rhetoric and policies, their excoriation of human rights violations are by and large is dependent on the extent to which other countries (or certain groups) are willing to obey their commands. Consequently, the horrendous human rights violations states and groups, such as the TPLF, that have cultivated friendly ties with the West or dutifully carry out the West’s bidding, commit are whitewashed or completely ignored. That is why the assertion that the ICHREE magnified the alleged atrocities committed by the Ethiopian government while making a perfunctory mention of the slaughtering of innocent civilians, rape and sexual abuse, use of child soldiers, pillaging, and destruction of civilian infrastructures the terrorist-designated group is guilty of would not be far off the mark. If the U.N. or for that matter any other international body tasked with advancing the protection of all human rights for all people, empowering people to realize their rights, and assisting those responsible for upholding such rights in ensuring that they are implemented, they must never be weaponized for political ends.

Budget allocated by the Ministry of Education for public universities has been utilized for political purposes, a report published by the Ethiopian Ethics and Anti-corruption Commission reads.

The Commission’s report, which was initiated to assess corruption risks in the private and public educational sector, highlighted a plethora of issues in both public and private-owned educational institutions which severely compromise the quality of education.

The report, which The Reporter has obtained, shows that there is a corrupted and political party-affiliated organizational system in educational development programs in those institutions. Illegal and inappropriate recruitment of teachers and other staff members, employing relatives and family members and recruitment of staff with fake educational certificates are also mentioned.

Many staff members of some educational institutions have employees with fake education certificates, while private university colleges are printing and selling degrees and diplomas like a good, and registrars purposely destroy students’ certificates and request money to replace them, according to the report.

It showed that while the university structure attempts to preserve the reputation of those who are in power, private schools, on their part, seek to preserve the interests of their students as commodity customers.

The absence of teachers from their classes, fake educational certificates, leaders’ engagement in theft, illegal employee recruitment and development, inappropriate procurement, lack of clear transparency and working system, inappropriate registrars’ staff members’ engagement malpractices, and tender embezzlement pose risks to educational quality, according to the finding.

The report underlines how colleges and university administrators compromised the quality of buildings by plotting and signing with the contractor to accept buildings before their completion date.

The study, which was conducted in 61 institutions, revealed a lack of internal financial control mechanisms, purchased goods of low quality, and budget allocation for politically motivated activities outside educational institutions’ key responsibilities.

Most of those educational institutions were reluctant to provide the requested information to undertake the assessment, unable to obtain accurate information and due to the absence of leaders in their working places, according to the finding.

The Reporter’s endeavors to get comments from the Ministry of Education bore no fruit as some officials were unable to respond.

However, Ethiopia’s education and training authority communication director, Tarekegne Geresu, speaking about private colleges, said that despite there being certain issues that might be considered findings, the authority has clear criteria to uphold rules and regulations in private schools.

Tarkegne also mentioned the authority’s ongoing efforts to identify and take serious measures against over 200 institutions, reaching up to the revocation of licenses and closure of institutions.

“After graduation, we provide authentication for every single degree certificate, and unless the authority certifies this certificate, employers should not recruit those with unverified certificates from private colleges,” Tarkegne told The Reporter.

Only seven insurers meet the new threshold

The National Bank of Ethiopia (NBE) raised the minimum paid-up capital of insurance firms by six-fold. The revised ‘Minimum Paid-up Capital for Insurance Company’, which is effective as of September 15, 2022, replaced the existing threshold introduced in 2013.

The new capital requirement to obtain a general insurance license is 400 million birr, up from 60 million birr. The minimum capital for long-term insurance licenses was also raised from 15 million to 100 million birr. A company needs to deposit 500 million birr in a closed account to obtain a license for both, which was 75 million birr under the old directive.

Existing insurance companies whose paid-up capital is below the new threshold are given a five-year window period to meet the new minimum threshold by the end of June 30, 2027. However, these insurers are required to submit an action plan to the NBE by October 16, 2022.

“There is plenty of time to fulfill the requirement. The minimum requirement was very low from the outset,” said Zafu Eyessueswork, a veteran in the industry and founder of United Insurance and Hibret Bank.

Fikru Tsegaye, an insurance profession known for his commentaries in the sector, also welcomed the decision.

“The inflation has been eating the capital of insurers. If you compare capital of insurance companies against dollar, it was declining, so the amendment is a step in a right direction,” said Fikru.

Out of the 18 existing insurance companies in the country, only seven have capital of more than 500 million birr, according to NBE’s report. The insurance industry has been struggling with low market penetration and declining premiums in a stiff competition for the limited market niche.

However, the old directive remains active for new insurance firms in the pipeline until September 15, 2023. This means organizers of new insurance firms can attain a license under the existing directive in the next year. A discussion is underway to adjust license fee required to acquire new license and renew existing ones. The fee is expected to be adjusted by 2000 percent, though that is still under discussion.

The new directive states that insurance companies in the process of share subscription that successfully collect a minimum paid-up capital of 60 million birr for general insurance business, 15 million birr for long-term insurance business, or 75 million birr for both, and submit a final application to NBE within one year after the effective date of the new directive, shall get the license.

Industry players called the new directive “hair-raising,” as the insurance industry’s growth remains nascent.

“Raising the minimum capital from 75 million to 500 million birr at once is very difficult. The new directive is inconsiderable to the difficulties the industry is facing. The industry has achieved very little capital growth in the past 20 years due to the nascent environment. The NBE itself has contributed to the weakness of the industry,” said an insurance consultant speaking to The Reporter regarding the new directive.

“The NBE was never giving appropriate attention to insurance, as the central bank was primarily occupied with banks. We have been requesting the government for the insurance industry to be regulated by a commission, authority, or agency separate from the NBE. We believe this will help the insurance industry to get better support and better attention,” the consultant explained.

Yesuf Ibrahim is a founding member of the National Movement of Amhara (NaMA). He worked as the head of the strategic sector in the earlier stages of NaMA’s establishment. After its establishment, he worked as the head of the strategic sector for two years. After serving the organization as a vice chairman, he is currently working as the head of the party’s legal and ethical regulations and as a manager of the government’s property management authority. He received his LLM degree in law from Addis Ababa University and has worked as a law lecturer at a university. The Reporter’s Selamawit Mengesha sat down with Yesuf on issues concerning the party, region and the country at large.

The Reporter: How would you describe your participation from the time you first started working with the government as an opposition party, and the process until you became the manager of the government’s property management authority?

Yusuf Ibrahim: I have been heavily involved since the establishment of NaMA until its present stage. NaMA’s ideology is not an organization that paints itself as a liberator. It is synchronized with the people and the country.

Because the Amhara people have special problems and are being attacked by the constitution and narrative, protecting the people is one of the political targets. However, we have come to the historical notion that the attack on Amhara people is not something that has a special historical origin but an effort to destroy the country by making the community a victim.

The movement is one that could be traced back to colonialism. Weakening the beliefs, values, and social status of this community can be a way to destroy the country. Its origin is a colonial idea. Because of this ideology, a number of internal anarchist institutions were created.

By establishing such organizations, a political party based on identity has been established over time to save the Amhara people, who have suffered a lot. When the government moves into the phase of “change”, it is important to try because “change” has not yet been seen. When we look at the power alignment in Ethiopia, it is not a place where NaMA makes friends easily. In the course of time, after studying the intricate web of power, we analyzed the power that could become the friend of the enemy.

Compared to that, even if we can’t get along with everyone, we can work with anyone. As for figuring out to what extent and with whom, there are those who are known for backstabbing, so that’s a start. It was a timely analysis that was not particularly favorable to the Amhara. Therefore, it was established to fight anti-Amhara organizations.

Currently, even though it is an institution with many problems, we have an organizational position supported by a strategic document that we must work on together with the government. In general, it is necessary to work together with the government. When elections were planned to be held during COVID, there was pressure from many political organizations. Working together with the government was our own initiative.

We asked ourselves how we could safeguard the long-term interests of our country and people. We are a political organization and we take a position based on who we believe will betray us. We do this within the bounds of the law. It is necessary to work together with the government. They did not try to make it as big as NaMA, but there was pressure from other parties to make NaMA a part of the government, but the government did not want that. Regarding this, we explained to them that Prosperity is a traditional government.

This showed that the government was not proactive and did not identify its partners. As a party, it contributes greatly to the work of saving the country. We believe that we have especially united the people.

During this process, there was a conflict in the nature of misunderstandings between various issues, and because the problems of the parties and the government were not resolved quickly, it started to turn into a war.

With all of that happening, it was important to work with the government during that period. But keep in mind that working together with the government does not mean that we are the government but, in some cases, groundwork needs to be done. We had the idea that politics based on cooperation, not competition, was best suited for the landscape of the country.

Since the NaMA did not have a clear idea about working with the government (that is, we joined the government while the country was at war), we discussed it twice with the government when the issue was raised.

The matter has been tabled at the executive level. But it was fundamentally ignored by NaMA.

When the authority was given, I was called on the phone. I arrived in Gondar at 5 o’clock in the morning and was told that the appointment would be at 7:30. They have their own reasons for doing so. Since the appointment process was during the war, it was completed in secret until the end so as not to overwhelm the government.

On the side of the Prosperity Party, there was a bit of a misunderstanding because I received a call from the Addis Ababa city administration and then, on the same day, I received a call saying that they were looking for you for an appointment in the Amhara region; I made my own decision and chose Addis Ababa.

There is no problem with opposition parties working with the government. In Ethiopia, the process of democracy should gradually develop over time. Democracy needs to be improved by learning to work together.

In fact, it would be great if NaMA worked with the government. It would have been helpful if the lower level of government was more involved in areas such as kebeles and districts.

I made a proposal that if the government does not give us authority on the lower structure, we should give up big authority positions. But the party was not unified and could not consider the proposal.

NaMA is a party established to represent the people of Amhara. The Amhara people want you to be the voice of your party in any way. Working with the government means leading a multi-ethnic population, and haven’t you faced challenges in the middle?

This is also an issue of the reform process that the party intends to follow. The reform will work to clarify which level and which concept we are working on. There might be some changes in concept with the change of leadership.

It is about continuing to explore our strengths and solving our problems. The government does not exist only through the executive branch. The government has three branches and includes Parliament in the constitution.

We have representatives in the federal parliament in the state. The relationship between the party and its members at the top should be defined. As a party leader, when we work with the government, it must be based on the party’s principles. If I am going to move in that way, we should either leave the party or leave the leadership of the government.

There should be a strict procedure. In the current state of affairs, the federal structure that our party and the country are led by all is based on ethnic lines.

The constitution itself rarely even uses the word “citizen.” We want this to be liberal over time. We follow the philosophy that individual citizens should be the foundation of democracy. We want our organization to be a center for correcting the many mistakes made by extremists.

It should not be restricted only to Amhara. It should also be connected with other communities. Once this is fixed, the Ethiopian status will be announced. We believe that when we work as a party and as Amhara, we are operating as Ethiopia.

The Amhara community is the Ethiopian community. It has been pushed by many things. We are not saying it should be paid by revenge. We only remember the past to be able to fix the future. We do not believe that our people would be harmed if equality and freedom prevailed in Ethiopia. This is a modern principle. I do not believe that I am an advocate for the politics of a community at any time. As a company, we believe that we work for all Ethiopians.

It is one of the pillars of our society that it should not be affected by special circumstances. We want to be seen from the Ethiopian perspective. We do not want to separate Amhara. We want it to be governed by justice along with its fellow citizens. Amhara is affected in the same way that the rest of society is, but the incorrect narrative that has developed over time must be corrected. The question of who is the representative of political philosophy is bound to arise. Since NaMA is of Amhara origin, it is organized accordingly.

It is necessary to adapt to solve this problem for the time being. I think NaMA can adapt to all the parties. While working here, I am color-blind. I have neither the capacity nor the desire to take sides by saying who belongs to which nation. I also do not share such political views. We think that the perceptions created on us by the TPLF is in conflict with the people of Tigray. This is because the TPLF has been equating itself with the people of Tigray. But we still see their segregation. We believe that the TPLF is a criminal group. During the century, narcissistic institutions were created to hold back society and live for profit.

A while ago, it was tiring to find the issues that separate the people of Tigray and the people of Amhara. It was bound by various social, geographic, religious, and economic ties. We have to solve the existing problems with different justifiable methods. As it is known in Ethiopia, we do not accept ethnic politics. Therefore, I am running the people’s question in alignment with the government’s work.

Is there a division between the leadership of the government and other members of the party? What kind of situation is NaMA in right now?

Currently, changes are made every time political dynamism changes. The struggle is that when more energy is needed, society needs change. We have gone through many problems in our struggle for organization and society.

As the country’s problems continue to expand, members of the family are always at war. Therefore, leaders and members do not meet regularly. NaMA’s children are dying on the war fronts.

Don’t ask me how a peaceful party can fight with weapons. Since the declaration of seclusion, there has been a call to participate in the war. War has been waged on the Amhara people directly.

There are NaMA members in Raya, Wolkait, and in all the districts where there were members that were killed while in command of the brigade. There are several fighters in the structure. Therefore, the central one, the one at the top of each leadership, and the one at the bottom are not formally connected; we are connected informally.

During the second round of fighting, the party did not have a central committee or executive meeting for four months. Many gaps were created during that time, and it is not possible to update regularly. Politics brings the change of opinion closer to you when you meet and update regularly.

However, the more it is separated, the more the case is defined. So far, we’ve been supporting the idea that had majority support in debates. I have never seen a decision made without the approval of NaMA members.

Because we do not meet regularly, we have lost the opportunity to make decisions through debate and consensus. There were talks of NaMA coming into government appointments without the party’s consent, but in the process, although there were violations of discipline, the matter was adopted at the central committee level and this concept of working together will hopefully continue in the future.

The forces that wanted change were created in NaMA. First, there was a question that you should not lead the party part-time while in government, as the party requires a full-time dedication.

We will restructure. The party is a movement, and a movement needs to open up. It is not just a random party in power. Until the struggle reaches a certain level, the movement will open its doors and attract new talents, and it is not feasible to say that I will remain on the throne of the establishment once it is over. It is not correct, and it is not the principle of our struggle either.

People feel worried if there is no open discussion. There will be people who want to make the party a powerhouse. But in the end, the contradictions could not be easily reconciled.

On the other hand, it has shown differences in the way we see politics. But it is only in the top management that the difference should be noted. A certain difference was created between the Central Committee and the Executive Committee with only 10 to 20 people. There is no difference in the bottom structure of the broad members.

Due to Bahir Dar’s protest, I resigned on my own accord and changed from the position of vice chairman to the law department. What the party wants is not the change of one person or two. They say the movement wants to change from top to bottom. And this is their right.

An inquiring generation should be encouraged. There were misunderstandings with the top management. It deviated from NaMA and the general concept of democracy, which did not accept the reform and were going through a process that did not encourage internal democracy.

It is not a question of whether we like or hate individuals; it is a matter of history. It is the struggle of our people. It doesn’t define division for me. It is fundamentally settled by law. The structure is not split.

The main foundation is structure. I don’t think that the creation of division in the leadership of two or three people will divide the structure. We intend to hold a general assembly by October, which will hopefully restore NaMA.

Will the party become more organized by resolving the controversy within NaMA?

NaMA will come prepared. This happens at any party because it is a massive collection. The party needs time. The fight will then go into negotiations. The negotiation will be based on the concept of transitional justice from our point of view. There are a lot of processes that go through both material and human life. All of that should be resolved.

Politically, where are we going? Where are we going as a country and what is our collective ambition? NaMA must be prepared for this soon.

There are those who have applied what we brought as an idea to Ethiopian politics, which shows NaMa’s power to exert great pressure. After many pushes, debating and explaining to the people of Ethiopia, if politics is about to bear fruit, it will not happen unless the party exists.

There may be individuals with egos within the party leaders. They should be dealt with on the inside first. We were hoping that it wouldn’t show on the outside.

Most of the leadership and central committee members have petitioned the General Assembly’s request. A petition has been filed for reform. Yet undisciplined work is being done against the will of the people and the structure of the organization. That should be corrected. They are all being looked at from every angle.

Let us come to the current national issues. We have been at war for the past two years. Various efforts have been made to resolve the war peacefully, but another war broke out. Can you explain to us the whole political process and what Ethiopia’s politics should be in the future?

NaMA wants Ethiopian politics to be based on citizenship. Ethnic politics means a gathering of extremists where everyone who is offended hides. The TPLF and ONG should be held accountable for the Ethiopian-ism they attacked. It is a country known for caring and living together. Politicians must engage in a certain strategy. The structure should not be manipulated as intended.

NaMA will always cooperate with forces that can weaken the TPLF. As the TPLF has been in politics for a long time and has led the country, it must correct the mistakes of the past by deciding which is the most viable path for the future. They could not think of a way that would benefit the people of Tigray, whom they think they represent.

I do not think that the separation of the Amhara and Tigray peoples, a society that has lived together for many centuries and is bound by religion and culture, will achieve the goal. The people of Tigray must show that they are not enemies to the Amhara community.

During the war process, NaMA has been doing many other things by standing with the defense force, delivering food and coordinating with the diaspora. When the Amhara region was in battle, it gave studies on why they should fight for a purpose. It was heavily involved throughout the war.

How and under what conditions do you think the negotiations should be conducted?

Conflict always ends in negotiation. Even if the TPLF itself thinks that we should be divided, it knows that they will lack both resources and manpower. The TPLF should not go any further on the path of brutality and revenge. Ethiopia should follow the liberal approach and solve its problems. The war against the TPLF was not for revenge but was brought on by themselves.

In my view, I want transitional justice to happen. It is not because I believe transitional justice would calm everything down, but because it is an option. Justice is being served now, not for revenge but to bring harmony and move forward.

Negotiations should be conducted for the sake of peace and justice, with the decision that it will not happen again in the future and that what happened in the past was not right.

But in Ethiopia, it is seen that negotiations are used as a plot resource. It has been observed that only if the power to be negotiated is dangerous and one party wants to survive, is the proposal submitted for negotiation.

That is why I am afraid that the proposal presented by the TPLF might be some sort of treason. The deal requires a genuine broker. Since the war will inevitably end in negotiations, it all depends on who comes up with the better negotiating package. There is a risk that the negotiator who believes in violence may resort to violence at the negotiating table.

The TPLF should not exist as a political force. It is difficult to say that the TPLF is deceiving all these people with mobilization. I think most of them believe it. While the party was scattered, the individuals in the party lined up, reorganized, and attacked the defense force.

Such regeneration should not be ignored. The security guarantees should be adjusted and then they can enter into negotiations. A ceasefire is one way it can be done. But beyond that, there must be other stakeholders. The negotiations that should have been entered into after the collapse of the Derg left us in the situation we are in now. I believe that the Amhara region should have a negotiator on their behalf.

In the end, it should be known what level our politics should be at. Any person should be able to go and live in the area they want without being displaced from place to place because of ethnicity.

The TPLF has the capacity to rebel, not organize and re-enter. War itself should not be based on ethnicity. Who will benefit from this war?

There is no need to pretend like there is a war between two different countries. Both must work together. The negotiations must be conducted in moderation. Negotiations range from a ceasefire to a new proposal.

Although the African Union has little experience, it must mediate. They should all enter into the negotiation with good intentions. The very idea of secession is unethical.

Olufunso Somorin (PhD)

Olufunso Somorin (PhD), regional principal officer of climate change and green growth for the eastern Africa region at the African Development Bank (AfDB), was in Addis Ababa to participate in a high-level technical conference on climate change aimed at summarizing takeaways for the upcoming COP27 conference. He presented his research titled “Adaptation Agenda: Beyond COP27” during the meeting on September 13 at the Hyatt Regency in Addis Ababa. Ashenafi Endale of The Reporter sat down with the expert to learn more about initiatives underway to lessen the effects of climate change on the global south and the rest of the world.

The Reporter: Africa emits only four percent of the global Greenhouse Gas emmisions (GHG), so why should Africa bear the burden of climate damage caused by the rest of the world?

Olufunso Somorin: Africa’s total GHG emissions are 3.8 percent. Compared to countries such as the US, a region like Europe, or even a country like China, this is very low for a continent of over one billion people. Africa is not responsible for climate damage.

However, when it comes to the impact of climate change, Africa is the most vulnerable. That is why more conversation is crucial to changing the global climate change discourse.

The region that is the least responsible is the region that is the most affected.

How much of their GDP are African countries losing to climate change?

The impact is already affecting the African population, economies, infrastructure, etc. The development we have achieved so far is under enormous threat due to climate change.

Every African country spends anywhere between two percent to 10 percent of its annual GDP dealing with the effects of climate change. This is an enormous resource that could be used to build more infrastructure, train more teachers, invest in energy and other development projects. The magnitude of climate change in African economies is hugely affecting development.

A large chunk of the available climate resources in Africa goes to mitigation. Currently, you are advocating shifting that resource from mitigation to adaptation. What exactly do we mean by climate adaptation projects?

There is a paradox that the region that needs the most global climate finance to respond to climate change is also the region getting the least.

Africa receives only three percent of global finance. This is despite the fact that Africa is the least contributor to the climate crisis but the most affected. This is what we need to change. Between 80 and 90 percent of the money that comes to Africa is used to mitigate climate change. Of course, mitigation is also good for development. When you use renewable energy, you are increasing access to power.

But adaptation, which is implemented across many sectors, is much more rewarding. Our economies in Africa are very dependent on weather systems. Agrarian societies account for up to 80 percent of the population. The moment there is a change in weather, for instance, a five percent change in rainfall, can lead to a significant impact in crops, and instant impact on food security. If the rain is delayed just by a season, it has a direct impact on food security.

So adaptation entails doing agriculture correctly, using water resources appropriately, refraining from activities that affect rain, and changing one’s mindset in order to achieve a stable climate. Adaptation is not for one sector, it is for every sector. There is a possibility in every sector for adaptation.

How much is Africa spending on climate change, and how much of it is coming from local financial sources?

There is a data accuracy problem. There is a lot of funding and finance that many countries are undertaking to handle climate change. They are not reporting it. Keep in mind that African countries spend between two and 10 percent of their GDP to respond to climate change disasters. So the data is not perfect because they are not reporting it precisely.

Domestic resources for adaptation are still low. Of course, it is very much under-reported. Nobody wants a climate-resilient modern Africa. Nobody desires a prosperous and modern Africa. So it should be our desire and our job to be climate resilient. We already paid for it. Our responses must be structured, coordinated, and lasting.

Is humanitarian assistance mitigation or adaptation?

Humanitarian assistance is a short-term coping mechanism; hence, it is a mechanism. Adaptation is a continuous, long-term solution. You do not move from zero to a hundred at once. The greater the risk, the more we need adaptation.

So adaptation is always in relation to the risks at hand, so you cannot achieve the highest level of adaptation. People affected by climate change on the ground are coping every day. But those are short-term solutions. They cannot respond to larger pressures.

A humanitarian response, if it is to respond to a climate crisis, is an adaptation measure.

How can we shift from mitigation to adaptation?

We do not shift in a way that ignores mitigation. We allocate more values, resources, responses, institutional systems, and capacity for adaptation.

Have African countries approved the National Adaptation Finance Framework (NAFF) so far?

NAFF is an idea we are testing. In many countries, including Ethiopia right now, we have developed a number of policy documents on adaptation. We have a national adaptation program of actions (NAPA), national adaptation plans (NAPs), and an adaptation component in our NDCs. Ethiopia has a climate resilient green economy (CRGE) strategy. Apart from the NDC, there are a lot of adaptation plans in various sectors.

However, none of these plans specify where the money will come from. All countries, including Ethiopia, have the plans but lack the financing. That is why we are developing the framework.

For instance, if Ethiopia introduces a strategy that charges an additional two dollars per every tourist or traveler coming to Ethiopia, which the airline collects per ticket, and that two dollars goes to a climate resilient fund, that is an innovative way of raising money to finance adaptation. Ethiopia can also levy a 0.5 percent tax on every business operating in the agricultural sector, and we call it the ecological or agricultural productivity fund.

We can also formulate legal frameworks in which every private sector operator reports what they are doing on climate change. You give them a template for how they report. Then the finance is aggregated and channeled to adaptation. We are ultimately thinking of a national level adaptation approach.

There is no such thing as a climate change project. What we have is a “climate-informed development project.” That is very important. If we mainstream adaptation into all our development projects, that is how adaptation works.

Do you recommend mandatory finance contributions for the private sector and other institutions?

Consider it a business strategy. The financial framework in Ethiopia may be different from that in Kenya, Nigeria, or others. Adaptation is very local. Adaptation does not operate in a vacuum. Adaptation is nested in an institutional structure in place, social relations in a country, and state-society interactions. It is crucial to capture that and craft a financial strategy around it.

We must start thinking of adaptation as something critical for development. We have to find an innovative way of funding it.

How can the private sector turn the climate change crisis into a business opportunity?

The private sector itself depends on climate change. Climate change is a risk for the private sector too. By investing in adaptation, it is also a way for the private sector to guard its own investments and do sustainable business. Businesses are not completely insulated from the climate crisis. When they see that as a threat to their business and start to respond, businesses start to adapt.

The private sector is not exonerated. There are opportunities and advantages for the private sector to channel private capital into adaptability.

Do you think Africa is exploiting carbon trading?

The good thing about the carbon market is that even though it focuses on mitigation, it exists largely in sectors that are adaptability-oriented. Whether it is forestry, as in the African case, conservation, nature-based solutions, carbon trading can be an adaptation intervention. Reducing emissions is the core target of all NDCs, including Ethiopia.

Carbon trading is a good opportunity. The financial flow from the carbon market and investment can also trigger adaptation finance.

What do we expect from COP27?

Cop27 is very important for Africa, because we need to be able to make progress on the financial commitments that the developed countries have made. There is also something about capital that is additional and predictable.

We need capital in quantity and quality. We need a lot of money. Somebody can pledge a trillion dollars and put too many conditions on the table, so you may not get even five percent of it. In such cases, the money has the quantity side, but the quality side is very difficult.

Africa needs a climate adaptability roadmap. Climate action is just a basket containing mitigation and adaptability. The truth is that mitigation and adaptation are different. The approaches, strategies, implementation modalities, design, and projects are different.

What we need is an adaptation strategy cognizant of the African context that is structured and practical.

So in global climate finance, a specific resource for the adaptability finance segment is crucial.

One of the agendas expected at the COP27 is the issue of banning the extraction of fossil fuels. What is your reflection on this, as Africa is just beginning to extract its fuel resources?

It is still a conversation at this early stage. The global conversation at the climate conference is very cognizant of Africa’s concerns. When we say green energy, it is a gradual transition. You do not go from fossil fuel to green energy in one day. There has to be a gradual transition. Substitution for fossil fuel is in the long run. This plan must also capitalize on technology.

Do not forget that fossil fuel is a natural endowment for these countries. How do you tell countries like Angola, Nigeria, or others to go from burning fuel to 100 percent green? We need to clarify that. I do not think the global system is going to put a gun to your head. It is about placing attractive incentives in place, and support mechanisms, to make that gradual transition.

For African countries, they are not under any legal obligation to make that transition. There has to be an incentive and encouragement for it.

The decision made 13 years ago to commit USD 100 billion to Africa’s climate response remains a pledge. Now we expect more pledges at the conference. Why do we always believe in pledges that will not materialize?

The way global diplomacy works is that we must always agree to move forward. So there is an agreement in principle that USD 100 billion a year comes from developed countries. That is one side of the coin. The other question is, do they really actually deliver? Some countries did, and many did not. COP27 is expected to urge these countries to push for these pledges to be met.

Is there any mandatory legal framework or convention to make countries fulfill their financial obligations as per their contribution to GHG emissions?

Climate diplomacy does not work as expected. Probably global trade and other sectors based on international laws. But for climate issues, you need to reach consensus. Most of the time, you are not going to find a situation where there is a legal penalty. It is not an annual contribution and “if you do not pay, you go to jail.” There is no climate court. Countries must understand the value of those resources and their contribution to climate value.

Do you think the world needs green politics like in the 1980s and 1990s, or do you think the current climate crisis can be solved under the conventional mainstream political systems?

First, to be honest, we have made progress since. It might not be on the scale we anticipate. But we have made enormous progress by bringing people around the table. The fact that we are having conferences for parties to discuss climate is a good sign. Maybe developed countries might say “we pledged USD 100 billion for Africa annually. We managed 80 billion,” and they might promise to improve it.

That is why I call it a fragile win. It is not a complete win. But it is still a win.

Do we need something radical? The answer is no. We would not get that. Because global diplomacy does not work around radicalism, it works around building consensus on the solution and the way forward. Then some countries may be part of the solution. The bigger part of diplomacy is that the further you talk about problems, the more you can talk about solutions.

But for many African countries, that is not enough and you want to see results on the ground. That is still a work in progress. So we expect a progressive step forward at COP27.

You recommended in your research that “debt for climate swap” as an alternative climate financing method. Do you think that can work, as many African countries, including Ethiopia, have piled up external debt?

These are the innovative climate financing schemes we are talking about. During the 2008/9 financial crisis, a country not far from here, Seychelles, was affected, as a service-based industry was severely affected at the time by the crisis. The Seychelles was able to negotiate “a debt for nature” swap. So a certain portion of its external debt was swapped for natural protection.

Basically, instead of paying the external debts back, you are allowed to use the money to do projects and investments that sustain the environment. We can do that as well. There is also a resilient bond, which is doable.

African countries need to come up with different innovative financing schemes because the one that works in one might not work in the other.

The fundamental departure is, let’s go beyond concessional loans and grants. Let us bring in equities, risk-sharing facilities, and all the types of financial instruments. Debt for nature swaps are just one instrument. I really like this scheme, and I would love to see it work in other parts of Africa.

Currently, the Horn of Africa is being rocked by an elongated climate crisis.

The Horn of Africa issue is a very special case. This is a region where some of the scariest challenges of climate impacts are unfolding. This is also one of the most resilient regions. In the past, regions had to deal with drought every decade or so. But this time, the frequency has been very high. Yet, many governments, institutions, and even the private sector are rising to the task of dealing with the crisis.

But we must start planning for the long term. Our actions in the Horn region are always reactive. We always start doing things after a drought has struck. Early warning systems, productivity optimization, water harvesting systems, and other readiness are very important ahead of the next drought. Proactive adaptation investment is very important instead of the reactionary type of investment.

In the Horn, resources are mobilized every time drought comes around. Why is it that a lasting solution remains difficult? What kinds of projects are needed?

Some drought resilience programs and projects are underway. The AfDB is one of the largest donors of drought-resilient programs in the Horn region. What is important is that we must coordinate projects at different levels.

Many initiatives are done at scattered levels, and they are not coordinated. Most importantly, we must push for proactive investments. We need more focus and investment on development spending so we can reduce our humanitarian spending.

Governments keep saying “we do not have money” and suddenly, when a crisis happens, they find money. Why do not we find the money before the drought strikes? That could have saved a lot of lives and damage.

Drought can happen, but it must not leave a humanitarian crisis behind. There are countries that face drought all year round. But we have to find different ways to change things.

Most importantly, we need partnerships at different levels.

Sewagegn Chane is director of the Public Financial Institutions supervisory department at the Public Enterprise Holding and Administration (PEHA), which regulates state-owned enterprises. Sewagegn is currently responsible for directly supervising the Development Bank of Ethiopia (DBE) and the Liability and Asset Management Corporation (LAMC). The Commercial Bank of Ethiopia (CBE), Ethiopian Insurance Corporation (EIC), and the National Lottery were also under his supervision, until they are transferred to Ethiopian Investment Holding (EIH) past May.

Working in public financial institutions for 30 years, Sewagegn initiated the establishment of the stock market in Ethiopia, which is bearing fruit eleven years after the first feasibility study. He was also vocal and key in rescuing the DBE, initiating Ethiopia’s first reinsurance company, Takaful (Islamic insurance), among others.

Sewagegn is also researcher at i-Capital Institute and organizer of the East African Finance Summit. Currently, he is leading two teams formed at the institute, studying the establishment of an investment and agricultural development banks in Ethiopia. Although he has been advocating ending state protection over the financial sector for years, he has currently changed his mind, just as Prime Minister Abiy Ahmed (PhD) authorized a policy that envisages opening up Ethiopia’s financial sector to foreign competition. Sewagegn believes the banking sector should remain closed at least for the next few years. The Reporter’s Ashenafi Endale sat down with the public finance guru. The excerpts, does not necessarily reflect PEHA’s position.

The Reporter: What is the progress in reforming public financial institutions, which commenced after Abiy came to power?

Sewagegn Chane: The biggest reform we undertook is in the DBE. In 2018/19, the House of Peoples’ Representatives (HPR) decided DBE cannot continue as a financial institution and debated on how to dismantle it. That year, the bank reported 765 million birr loss so the HPR decided that the bank is not supporting itself, let alone the economy.

Myself, Haileyesus Bekele, the president at the time, and Yohannes Ayalew (PhD) DBE board president at the time, were called by the HPR to explain the issue. At that time, Public Finance Institutions Agency was a separate entity outside PEHA. The agency was led by Sintayehu Hailemichael (PhD) and I was the deputy director for operations. When some 36 SOEs were put under PEHA in 2018/19, the agency was included under PEHA, as a directorate.

The Budget and Finance Standing Committee at the Parliament insisted the DBE must be dismantled, because it was reporting a loss consecutively. The three of us were called to give our final comments on the committee’s decision. The committee was told that the fundamental problem of the bank was the lack of institutional independence.

Everybody was intervening in the bank, and it was unable to operate as a bank. The PM, other ministers, sectorial institutions, and even individuals have been meddling in DBE’s operation. Secondly, the bank gives loans but does not collect. Those who took DBE loans view it as the government’s budget, not as a client. Most of them had the “developmental investors” plate.

They take a loan and divert it to other businesses. Commercial farming in Gambella and Benishangul are good examples. I was in Gambllea for a year and half, to study why DBE’s loans failed there. There are so many rain-fed projects there. Particularly, six of those that took loans completely diverted the money to other businesses, instead of the commercial farming.

I stood before the standing committee, and pledged to give the DBE additional time. I told them if institutional freedom is restored, relationships with clients will be straightforward, and the bank’s loan collection capacity rebuilt, bringing DBE on track. So I asked the standing committee to give us just one year, and if we fail to rescue the bank in that year, then the committee can dismantle it.

Yohannes on his behalf explained how the IMF and the World Bank are happy to see the DBE dismantled because they do not want development banks in developing economies. He also elaborated how important a development bank is for Ethiopia. After a brief tea brake discussions, the standing committee announced it granted the one year time.

Immediately, we embarked on the reform agenda, introducing seven reform pillars. One of the biggest reform pillars was reducing DBE’s Non Performing Loans, which was over 40 percent at the time. If the bank cannot collect the loans, it cannot disburse loans the next time.

DBE’s NPL at the time was weighed in rain-fed agriculture and textile. So, we stopped any further loans for rain-fed agriculture. In textile, many foreign investors took loans in billions but did not pay, so we decided to take over all the projects that are not paying back their loans, and transferred them to other investors.

We also took the contract management of non-performing projects. For instance, the DBE took over the management of Elsi Addis, Etur and other textile factories, for the time being. Except Etur, most of these projects have been transferred to new investors, without reaching the foreclosure stage.

The major project left on our hands to date is Ayka Addis.

The other serious measurements we took were barring any officials from intervening in any loan appraisals and disbursement processes. Before the reform, orders for some loan approvals were given from the Office of the PM. Officials from the Industry, trade, agriculture, and many other ministries used to give such informal orders to the bank. Now, even the DBE board cannot involve in loan disbursement cases, except on strategic issues.

We managed to reduce DBE’s NPL to 30 percent this year, including Tigray loans. It is actually 17 percent, if loans in Tigray are excluded, which are affected by the war in northern Ethiopia. Profit comes from loan interest. If the loan is not collected, there can be no profit.

We managed to generate 1.2 million in 2019/20; just a year after the reform was launched. This year, the bank generated 3.9 billion birr in profit. If we did not put aside 4.1 billion birr provision for the Tigray loans, DBE’s profit this year could have been 7.8 billion birr. The DBE is rescued now and everybody is acting as a client now.

DBE’s source of finance is the guarantees from the Ministry of Finance and the National Bank of Ethiopia (NBE). The capital has increased from five million to one billion. The macroeconomic committee approved a study to allow new DBE bond, effective since January. This is apart from the GERD bond, which is the DBEs source of finance.

Before the reform, all the financial indicators of the bank were negative, and unhealthy. We completely reversed all of that, except for the NPL. Before the reform, there were only expenses and disbursement, but now there is income.

Out of the 31 strategic measurements we stipulated under the seven reform pillars, 21 are aggressively implemented and ten are in the process. Only one measurement has not started, which is the digital technology and modernization initiative.

The PEHA and DBE’s board has contributed for the success of DBEs management. One of the positive factors is the steel-serious discipline of Tegegnework Getu (PhD), the board chair of DBE. As a board chair, he is opaque to any external influence or favor. He never took stipends and incentives allocated for board chairs annually. Even he uses his own car for DBE activities.

Yohannes was the chief economist at the NBE for a long time. How did you believe in him, that he could rescue the bank?

Under past presidents, the bank had many deviations and exceptions. Instead of going through loan approval and disbursement procedures, loan seekers directly contact the president and get the loans, informally.

For instance, after we banned DBE loans for rain-fed agriculture in 2018/19, the bank gave 120 million for rain-fed agriculture project. The president at the time said he was forced because certain officials at the Ministry of Agriculture managed to give the order via the Office of the PM.

Surprisingly, the board chair does not know about the loan. The bank was bleeding. We had to be brutal to stop the bleeding. Most of the bad loans were given during Isayas Bahre’s time. Both Haileyesus and Getahun Nana were unable to save the bank. Our biggest worry was that Yohannes might decline the role to lead the DBE.

Over 200 large scale agricultural projects, and a number of foreign textile investors took loans from the bank and failed to pay. Are you pursuing them legally?

We are trying to acquire the lands currently. Our biggest problem now is with the regional governments of Benishangul and Gambella. The land is the key asset the investors provide as collateral to take the loan from the bank.

After the investors fled without paying the loans they took, the DBE has to acquire the lands, since it is the collateral. Once we finalize acquiring the lands, we will transfer it to other investors. Then we will recover the previous loans.

I heard the Benishangul and Gambella regional governments are demanding it pays taxes on the lands?

We reached agreements on some of the lands in Benishangul. There are ongoing debates on the amount. The bank agreed to pay the tax, if it agreed on the amount. The regional governments usually give one plot for multiple investors, so one certificate is given to multiple investors. The regional agriculture bureau has been reporting to us that the lands were being cultivated by the investors, which was false.

In general, rain-fed agriculture and textile investments have bled DBE.

For instance, Ayka Addis’s investor used informal channels to get the loans, instead of going directly through the bank. It either goes through the PMO or other officials. Solving all this was not simple.

Most of DBE’s clients were unruly. They had the right to take the loan, and the right not to pay. So we disciplined the clients first, and reversed the bank’s practice of negligence. All this was done in three years.

How much is the land leased for the rain-fed projects?

The rate depends on the regions. Basically, tax, lease and anything related to the land is handled by the investors. But since the investors went bankrupt, and the DBE took the lands, now the bank has to pay them. This is the reason why the regional states are asking DBE for the taxes, because it is under the bank now.

The investors who took the land in regional states for commercial farming, left, and the tax holiday period is over. So regional states are now claiming the taxes and the DBE agreed to pay. This is the game.

Did the Gambella commercial farms failed by design?

The loan was supported by policy. The policy of initiating commercial farming and modernizing the agriculture was not wrong. So the DBE prepared policy and procedures.

The major factor for the failure at that point, was the decision to give loans for rain-fed agriculture. This was a mistake because the investors knew the loopholes and abused the loans and failed to return it.

The DBE is on the right track now but business continuity is more critical.

What are DBE’s sources of funds, after the NBE’s 27 percent T-bill is replenished?

The NBE introduced another bond this year, in which banks channel one percent of their loan portfolio to the DBE. In the past six months, a bit more than 10 billion birr has been channeled to the bank from this new scheme. Once we start from insurances, these two schemes will become our biggest source of funds.

The GERD bond and loans from international banks also generate finance. It also accesses external funds like SME loans, through the MoF. DBE’s T-bill is almost zero currently.

How much is the loan interest the DBE is paying currently, when will the rest mature?

The DBE pays interests by adding two percent on the saving interest, which means nine percent. On the other hand, DBE’s interest rate is between 11 percent and 12 percent, the least being for import substituting projects. The margin covers its administrative cost. So the bank is able to pay all its interests duly.

DBE requested to put Tigray NPL’s off its balance sheet. But NBE officials told The Reporter that it is not going to take it off its balance sheet.

If Tigray’s NPL is put-off DBE’s balance sheet, DBE’s NPL could be 12.5 percent. But including the Tigray NPL, which is 10 billion birr, the NPL stands at 30.4 percent. What we are saying is this 10 billion birr in NPL happened by factors out of DBE’s control. We are not asking the NBE to cancel the Tigray loan.

We undertook a detailed study on how the NPLs could be taken off the balance sheet, and presented to the NBE. We do not know why NBE is silent on the issue. The CBE also requested the NBE to take off two billion birr off CBE’s balance sheet. This was also studied and presented to the NBE.

The NBE first said the request should be processed by the Bankers Association but the issue is still in the process. It is illogical to keep inactive numbers on banks’ balance sheet. When unrest occurred in Oromia over the past few years, the NBE allowed loans of affected investors in the region to stay off banks’ balance sheet. The same can be done for Tigray. It is not a big deal. It is NBE’s decision but I do not know why it is reluctant when it comes to Tigray NPLs. Tigray NPL does not represent DBE’s actual performance, which is outstanding.

DBE’s outstanding loan is 63.4 billion birr. Total NPLs stood at 19 billion, of which 10.1 billion birr is created in Tigray since the war. The president of DBE requested to exclude the Tigray NPL but PEHA does not agree, unless the NBE approves it.

Another investor is negotiating to buy Ayka Addis. Will this be the last negotiation?

A number of potential buyers have been trying to buy Ayka Addis in the past but failed. Especially a Chinese investor was very eager to acquire Ayka Addis. Any potential buyer is expected to contribute 50 percent of Ayka Addis’s portfolio. For instance, the initial investment loan was USD 1.7 billion so the buyer is expected to contribute half of it. But the Chinese lacked capital so it requested to contribute only 10 percent of it, which means around USD 200 million, so we refused because we cannot breach the 50 percent law.

If Ayka Addis is sold, DBE’s NPL will drop to around 15 percent, from the current 30.4 percent. Ayka Addis is holding a huge loan. The principal loan is 1.7 billion, a decade ago. Including the interest, probably it is around USD three billion by now. The value of the machines, factory building, raw materials when the DBE received Ayka Addis, is valued at USD 1.79 billion.

By the way, we are still paying the salary of 4,500 employees of Ayka Addis, though it has not operated for years now. It is between 13 million birr and 14 million birr every month. We cannot abandon the employees, after the Turkish investor left. We are carrying all this cost.

There were also other alternatives for Ayka Addis, other than selling it.

There were three major options tabled. The first is selling to a capable investor or buyer. The second is operating Ayka Addis under a management contract, just like Elsi Addis and the third was repurposing Ayka Addis into an Industrial Park. Some three potential investors have been negotiating. The Chinese came last.

Currently, another negotiation is underway. We hope this will be the last one. It is a consortium of local and foreign investors. We will disclose it when it materializes. Ayka Addis’s operation ranges from cultivating cotton to sewing the clothes. It pins the cotton, dyes it, and makes the clothes. It is an end-to-end project. So the potential buyer is expected to specialize in all these value chains.

Will the new buyer pay Ayka Addis’s accumulated tax?

Under Ethiopia’s law, a company does not pay taxes if it declares bankruptcy. After the DBE took over Ayka Addis, the tax authorities are saying Ayka Addis must pay tax, since it did not undergo liquidation. Ayka Addis was not operating for the past eleven years. So, the tax authority is asking for back-taxes for all these years, stating the project did not declare liquidation. So we are arguing with the tax authority.

But the DBE declared foreclosure?

When the Turkish investors left and the DBE started managing Ayka Addis, the tax authority started asking for tax.

Amazingly, Bmet cables, one of the Turkish investments abandoned after taking huge loan from the bank is a good example of how much Turkish investor’s exploited us. Under the Turkish investor, Bmet cables utilized 40 percent of operational capacity but they were not paying their loan.

Now, the local buyer, Tadesse Admasu of Red Star Trading, is operating at 12 percent of its capacity due to different reasons. The buyer acquired Bmet paying 890 million birr. Now, it has paid all the loans owed to Bmet.

How much has Ethiopia lost because Turkish investors left the country without paying DBE loans?

Before, their equity contribution was 30 percent. This means the DBE contributes 70 percent of the investment. Under the previous ratio, a Foreign Direct Investment comes with USD 30 million, and takes 70 million. The foreign investors left without paying the 70 percent loan they took from the DBE. But now, we adjusted the equity contribution to fifty percent, for foreign investors. Local investors pay 20 percent.

FDI is needed to bring technology, capital, forex, and create jobs. It did not meet any of these targets.

One of the other loopholes FDIs has been exploiting is that they highly under invoice export price. They usually have subsidiaries or a mother company operating abroad. So they export the clothes to them, with fake price documents. These investors also import raw materials only from those mother companies or subsidiaries abroad. The FDIs operating in Ethiopia do not want to use local inputs. They export t-shirts with USD 60 cents from Ethiopia. But the buyer abroad, which is affiliated to the FDI, resells it at a much higher price. So the FDIs generate meager forex for Ethiopia. Their bank statements also indicate loss, always. Especially the expats brought by FDI are highly abusive. Bmet’s former CEO has been paid 500,000 birr in salary monthly. This is excluding housing, vehicle and other accommodations. Now we decided to reduce expats inflow.

That is why, just when we started being strict on Ayka Addis that the Turkish investor’s fled Ethiopia immediately, without handing over the project’s properly. I think they left for Burkina Faso.

Are there new public financial institutions planned to be established, particularly to finance long term development projects?

Four years ago when the bank was in deep trouble, we conducted a study to determine its fate. One of our alternative recommendations in the study was to breakdown DBE into three different policy banks; into an industry bank, agricultural bank and an SME bank. Finally, a decision to reorganize and reform DBE as it is was made. In the meantime, we conducted a study to renovate the bank; the ATA was also making moves to initiate the establishment of an agricultural bank.

The initiative to establish a stock market was also conducted by us. We have been trying to convince the government to establish a stock market for the past eight years. It is only realized under Abiy.

Now, the importance of an independent agricultural bank and investment banks is imperative for Ethiopia. In line with the agricultural bank, agricultural insurance and micro-insurance firms are necessitated equally. These firms protect the loans provided by the agricultural bank to farmers.

We conducted the “Proposal of restructuring public banks” in 2014. The proposal included the recommendation to determine the fate of the former Construction and Business bank (CBB). We did not just demolish CBB without a proper study.

The same studies have later been modified for the DBE. The modified study also recommended the vitality of Agricultural Development Bank, and mortgage bank (construction bank). The plan is for the CBE to stop mortgage financing, and transfer the role to the new Construction Bank (CB). In fact, the proposed CB partly takes on the role of the now defunct CBB.

Currently, we have established two working groups at i-Capital Institute, studying on investment bank and the agricultural development bank each. PEHA has the mandate to give birth to new public enterprises, apart from managing the existing ones. It can also decide on mergers, and dismantling of SOEs.

As long as Ethiopia is progressing from an agrarian economy to manufacturing, a stock market is very essential. If we need more robust manufacturing companies, we must build a robust stock market, where the companies are listed, float shares, and mobilize capital. A manufacturing industry cannot grow without a stock market.

The banking sector fears to give loans to manufacturing industries because the banks fear losing their saving capital. Once the stock market is active, the interest in banks will drop. But the stock market will grow faster, hand in hand with manufacturing.

I hope the establishment of an agricultural bank is realized soon. Ethiopia has an agrarian economy. But the economy is currently distorted, as the service sector constitutes the largest portion of the GDP. In a bid to transform Ethiopia’s economy from an agricultural to a manufacturing industry, agricultural development bank cannot be an alternative. Agriculture is not developing due to lack of finance, fundamentally.

The agricultural bank also needs an insurance firm, to cover the risks of the loans. The bank finances tractors for the farmer, and then the insurance firm insures the machines as well as the harvest. It is highly imperative that agricultural development bank and investment banks are essential for this country.

A secondary market cannot operate without an investment bank. Since we are nearing the establishment of a stock market, we also need to establish an investment bank.

For instance, banks are planned to be listed on the stock market. The investment banks will study the banks, as well as other IPOs, inside out. So, the investment banks determine the exact value of shares, and securities. This means IPOs, including commercial banks, cannot determine the price of their shares by themselves, unlike now.

The underwriter preserves the interest of every stakeholder, investor, IPOs, and others. It sets standard but the investment bank cannot be listed on the stock market itself.

Once the two working groups wrap up their studies, the documents will be reviewed by stakeholders. Then, we will present the final documents to the government to decide on whether to drop or implement the study’s recommendations.

A few years back, we travelled to Nigeria to visit their central bank and development bank and took three months of training. I was amazed by their Islamic insurance. We extracted lessons and brought it to Ethiopia.

The government is saying the banking industry will be opened for foreign competition very soon. What is your take on this?

Before, we have been asking the government to open the banking industry. But recently, we have changed our perspective. We prefer the government to delay the opening up for now. I precisely know the exact capacity of each local banking institution.

Before, our assumption was that local banks will merge, at the face of an open up. So we have been advocating for it to open, at each meeting and financial summits.

Basically, banking and insurance businesses in Ethiopia is a captive business. The banks are formed either under religious, ethnic, political sentiments or other bands. So, Ethiopian banks and insurance companies lack the business mentality. If they had a business mentality, they will work with anyone who has a viable business idea. So I believe the government must delay the sectors opening up.

The NBE recently said mandatory merger and acquisitions will be forced on local banks, when the sector is opened up.

That is inevitable once the industry is opened up. Of course mergers can happen even before the opening up. For instance, the NBE raised the paid up capital to five billion. Those who failed to meet will have no option but merge. The NBE can also raise the reserve let’s say to 25 percent, from the 10 percent currently. Many banks could have merged. This way, competitive banks could be created.

Western banks, especially Europeans, strongly pushed Malaysia, Korea, South Korea, and Thailand to open up their financial sector. Once these Asian countries opened their financial industries, the western banks withdrew after joining the sector. The Asian economies were hit by financial crisis as a result.

But eventually the Asian tigers avenged the western banks. The 2007 financial crisis hit western banks, because the Asian tigers suddenly raised their banking capital. They intentionally gave more loans to American banks. Then the American and European banks disbursed those loans to mortgage, and small businesses. The western banks failed to pay their loans to the Asian tigers, taking revenge twenty years after the western banks played foul.

We do not need such turf wars.

The only reason Ethiopia’s economy is doing well after the war in the past two years, is because our financial industry is closed off. Our economy survived because the banking sector is not open.

If banking was opened to foreign competition, the economy could collapse, under this war. And had it been opened before the war, the economy would have collapsed by now. Foreign banks simply close and leave, when there is a war.

Many people say the banking industry should be opened. That is wrong. They do not know the exact capacity of local banks in surviving foreign competition. I have no confidence even in the CBE.

The CBE has a huge NPL owed by the government. The government owes over half a trillion birr. Unless it is fully paid, CBE will face many challenges.

So, I insist the banking industry should not be opened at least in the next three to four years. Local banks need up to four years to prepare. Mandatory merger is simple.

When the Home Grown Economic Reform was launched in 2019, the government promised to reduce the states hand in the economy, and reduce the pressure on CBE and domestic credit. Is there any progress?

The CBE is not giving loans to the government now. State pressure is reduced. The CBE has studied new organizational structure, and is implementing new business strategies. Before, especially during the previous regime, state banks give loans as if it is a budget. They do not collect the loan.

Do you follow up on CBE’s branches abroad?

We evaluate them during reporting. The bank has branches in Juba and Djibouti. The Juba branch is performing very well but the Khartoum branch was suspended while in the pipeline.

Did the CBE move from PEHA’s supervision, after it is placed under the EIH?

Currently, the CBE is in transition process, from PEHA to the EIH.

I heard SOEs will be categorized under three supervisory institutions according to their performance. These are the EIH, PEHA, and the LAMC. Is that true?

What I know is that there are SOEs going to the EIH, and the rest will remain under PEHA. The LAMC by itself is an SOE and is under PEHA’s supervisory. LAMC is under my supervision. The CBE, DBE, EIH, LAMC and national lottery, are under my directorate.

The EIH has recently on-boarded 27 SOEs, out of the 36 SOEs under PEHA. Does that mean they are completely out of PEHA?

The investment part of SOEs goes to the EIH, while the enterprise management aspect remains under PEHA. But so far, there is no definite decision on whether the selected SOEs completely move to the EIH, or partially. This is decided by the macroeconomic team of the PM.

Will all SOEs be listed on the stock market?

The plan was for the SOEs to list a certain percent of their value on the stock market. If SOEs like ET, ethio telecom and others trade 10 percent of their portion on the stock market, it builds the public’s confidence. But SOEs must meet stringent financial reporting systems.

I also hear that five percent of ethio telecom’s share will be sold on the stock market. SOEs that meet the right financial reporting system will be able to float shares on the stock market.

People are facing difficulties acquiring houses because real estate companies collect money from house seekers and disappear. The stock market will also solve this. Everything will take shape under the secondary market.

The government is allowing the establishment of new banks in the last two years. But lately it confirmed the opening up of the banking sector for foreigners. Isn’t this sending mixed signal?

Mergers can be done at any time. Then local banks can consolidate and ready for competition. PEHA is exemplary in merging CBB with the CBE six years ago. Private Banks must follow suit.

Local banks are in a comfort zone, registering lump profit, not because they are providing a class service. They are profiting because they are protected. Under state protection, they do not have to improve service. They survive at the expense of the client. Millions are saving in bank but only a few thousand get loans. All of this will change, once foreign banks come.

To allow foreign banks, the banking proclamation, banking service code and the investment regulations must be revised. Especially, the code must allow banking for foreigners. The existing commercial code allows banking and insurance only for Ethiopians. Non Ethiopians cannot be investors, or operators.

Do you think the financial sector will be opened before five years?

I think so but I prefer it being delayed. All banks are giving loans to the service sector. Manufacturing and agriculture cannot grow unless we have banks that can give loans for long term projects. There are no consumer loans too.

Insurance companies complained over NBE’s order to direct 15 percent of their profit to DBE bond.

The rate has been reduced lately and the insurance companies agreed.

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Ethiopian Reporter Political News

Officials at the Ministry of Agriculture are worried about the global fertilizer scarcity as the nation becomes unable to endure the increase in the price of the agriculture input owing to the conflict between the Ukraine and Russia.

The global fertilizer crunch continued as the country sees a growth in demand for fertilizer due to expansion of irrigation farms and new agriculture projects that prompt farmers to increasingly shift to artificial fertilizer with subsidized price.

“Demand is growing substantially as Meher farms expand and irrigation activities surges across the country,” said Umar Hussein, the Minister of Agriculture, in an event held at Skylight Hotel to honor stakeholders who have been involved in the timely delivery and distribution of fertilizer.

Last year, the price of fertilizer more than doubled in the international market, a situation that have bulged Ethiopia’s annual budget for the commodity from USD 600 million to USD 1.2 billion.

“The last year has been very challenging due to forex shortage and security concerns that have affected distribution,” Umar said.

This week, the World Bank warned that there would a further increase in price of fertilizer, with the rapid increase in gas prices turning into an increase in the cost of the commodity.

“The challenge is meeting the immediate demand for fertilizers to support next season’s crops. Current projections suggest that Africa’s unmet demand could reach four million metric tons this year, with West Africa facing the most acute challenges this growing season,” said World Bank Group President, David Malpass, during the opening of the 77th session of the UN General Assembly (UNGA 77) on Tuesday, 13 September 2022.

Last year, the Ministry had to float a tender more than twice as suppliers failed to fulfill contracts due to the global fertilizer crisis, which was first caused by the coronavirus pandemic and then worsened by the war between Russia and Ukraine, which supply over 50 percent of inputs needed to produce urea.

“Taking a lesson from last year, we are in contact with potential suppliers to avoid delays. Invitations have been already made,” said Sophia Kassa (PhD), State Minister for Investment and Input Sector at the ministry, told The Reporter.

During the last fiscal year, almost 13 million quintals of fertilizer was supplied by Fertiglobe, one of the largest producers of the nitrogen fertilizer in the Middle East, and Morroco OCP, a renowned supplier in Ethiopia, where it is currently building a fertilizer plant in partnership with the government.

The government expended a total of 64.5 billion birr for the procurement, shipment and distribution of fertilizer last year. It accounts for 11.4 percent of the budget during the same period.

The government had to allocate another 15 billion birr in subsidy as farmers become unable to withstand the surge in price of fertilize quadrupled in the local market.

Three directives on broadcast media go operational effective this month

The Ethiopian Media Authority enacts three directives to regulate the public, community, and commercial broadcast media. They are part of the eight directives the Authority has been issuing since the ratification of the media proclamation in April 2021.

To be applicable beginning this month, the directives list the rights and responsibilities, and how licenses are granted for the public, community, and commercial broadcasting media. The directives rule on how television and radio media should conduct their reports during national occasions like elections.

Lists of administrative measures by the Authority as well as legal actions have also been stated. Beginning from warnings to suspension of licenses and legal actions, several measures would follow should the media houses engage in illegal activities.

One of the actions, as it was the practice before, was to prohibit the dissemination of a program considered to be a danger to national security before going public on any of the broadcast media.

On the issue of impounding and injunctions, article 45 of the proclamation states that prosecutors might request a court order to stop publication of the programs. In the event of an emergency, the broadcast of the programs will be called off with the order of the Ministry of Justice. This should be notified to the court of law within 48 hours.

The Authority also prepared and approved several other directives to govern the media landscape in Ethiopia. These include directives for religious broadcasting services, online media, and print media.

Following the approval of the religion broadcasting service directive, which forced the registration of religious-based media, several of them have been registered.

Among the 46 media outlets that started the process and are working with the Authority to finalize registration, 23 have received their licenses, according to Dessie Kefale, communications director at the Authority.

“There was a deadline on which all had begun the registration process. Some of them were already operational for a long time, of course,” he said.

Before the ratification of the proclamation, as Dessie explained, there had not been adequate legal frameworks for all kinds of media houses.

All the directives and regulations before last year’s proclamation were based on the Mass Media and Access to Information issued in 2008, and Broadcasting Service Proclamations issued a year before that.

“There are several other laws under discussion and preparation, which includes a directive on hate speech and misinformation,” Dessie told The Reporter.

It is the “largest pandemic fraud” in the US

Ethiopians are among 47 people who have been charged in connection with a fraud scheme in the US involving Feeding Our Future. The alleged fraud is said to be the largest pandemic fraud in the country, involving USD 250 million.

The defendants are charged across six separate indictments with charges of conspiracy, wire fraud, money laundering, and bribery. The defendants are suspected of creating dozens of shell companies to enroll in the program as Federal Child Nutrition Program sites, while allegedly creating shell companies to receive and launder the proceeds of their fraudulent scheme.

The defendants submitted false invoices purporting to document the purchase of food to be served to children at the sites and submitted fake attendance rosters purporting to list the names and ages of the children receiving meals at the sites each day, according to the US Department of Justice.

“These indictments, alleging the largest pandemic relief fraud scheme charged to date, underscore the Department of Justice’s sustained commitment to combating pandemic fraud and holding accountable those who perpetrate it,” said Attorney General Merrick B. Garland. “In partnership with agencies across the government, the Justice Department will continue to bring to justice those who have exploited the pandemic for personal gain and stolen from American taxpayers.”

Feeding Our Future’s founder and executive director, Aimee Bock, was among those indicted. She is charged with conspiracy to commit wire fraud, conspiracy to commit federal program bribery, and federal program bribery. She oversaw the USD 240 million fraud scheme carried out by sites under Feeding Our Future’s sponsorship, according to the US Department of Attorney.

An Ethiopian born Abdikerm Abdelahi Eidleh, 39, of Burnsville, Minnesota, is charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit federal program bribery, and money laundering. Eidleh was an employee of Feeding Our Future who solicited and allegedly received bribes and kickbacks from individuals and sites under the sponsorship of Feeding Our Future. Eidleh also created his own alleged fraudulent sites.

Ethiopian born-US nationals, Bekam Addissu, 39, Hadith Yusuf, 34, and Hanna Marekegn, 40, are each charged with one count of conspiracy to commit wire fraud. Another six siblings who are originally from Ethiopia have also been charged with wire fraud, federal programs bribery, conspiracy to commit money laundering, and money laundering.

Another Ethiopian-born US national, Liban Yasin Alishire, 42, the president and owner of Community Enhancement Services Inc., a company located in the JigJiga Business Center in Minneapolis, is charged with receiving more than USD 1.6 million in fraudulent Federal Child Nutrition Program funds. Ahmed Yasin and Khedir Jigre have also been charged with conspiracy to commit wire fraud and money laundering in the same center. These three defendants have been accused of buying properties, including beach property, in Kenya.

Another defendant with links to Kenya, Salim Ahmed Said, 33, of Plymouth, Minnesota, is charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit federal program bribery, federal program bribery, conspiracy to commit money laundering, and money laundering. Said was the owner and operator of Safari Restaurant, a site that received more than USD 16 million in fraudulent Federal Child Nutrition Program funds, the US Department of Justice said.

“An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law,” the department said.

A startling revelation regarding the war in northern Ethiopia was announced last week by the International Commission of Human Rights Experts on Ethiopia, an independent organization tasked by the UN Human Rights Council with conducting a thorough and impartial investigation in Ethiopia. The stern warning emerged after the organization released a study that stated there are reasonable grounds to believe that parties to the conflict had violated and/or abused human rights since combat began in November 2020.

It was a report that not only angered federal government officials but also countries and experts that had already questioned the mission and real interests of the recently formed committee of experts.

“The report of the commission is prepared in defiance of the UN best practice guidelines such as professional independence, impartiality, and standard of proof,” said Tadesse Kassa (PhD), secretariat of the inter-ministerial taskforce that was formed by Prime Minister Abiy Ahmed, slamming the UN Commission of Human Rights Experts report of human rights violations in the northern Ethiopia war.

At a press conference held on September 21, 2022, he referred to the Commission’s initial report, which was created with only two full-time human rights investigators and remote interviews, as nothing more than mediocre. At the press conference, the Ministry of Justice unveiled the task force’s first phase report, which was prepared by 158 experts deployed in the conflict-affected Amhara and Afar regions.

In its first phase investigation report, which covers violations committed by the Tigray People’s Liberation Front (TPLF), the inter-ministerial taskforce (IMTF), formed to implement the recommendations of a joint investigation by the Ethiopian Human Rights Commission (EHRC) and the UN Office of the High Commissioner for Human Rights (OHCHR), presented its findings.

The Task Force found reasonable grounds to believe the commission’s findings that there were 2212 rapes, 2831 extrajudicial executions of civilians, and other violations during the war. According to its 46-page report, the team came to this conclusion after analyzing the testimonies of 10,000 witnesses and analyzing thousands of videos and material evidence.

For Tadesse, who has been monitoring the task force’s research and report-writing process, the UN Commission of Human Rights Experts’ report on Ethiopia is only a “snippet” of the full extent of the damage that has been inflicted throughout all three regions.

“The report’s conclusions are presented on the basis of either no evidence or evidence whose credibility is highly questionable,” the secretariat told the room full of reporters questioning the report in regard to its standard of proof and data collection. Tadesse even went on to call the report “a political statement” that was prepared to “help implement” the agendas of “some forces.”

This week, the commission accused all combatants in the conflict of committing various human rights crimes. In order to reach the conclusion that there are “reasonable grounds” to suspect that the offenses amounted to war crimes and crimes against humanity, the Commission listed incidents that it employed as a basis.

The selected incidents were the shelling of Mekelle and attacks on civilians and civilian objects; killings in Kobo and Chenna; and a drone strike on an Internally Displaced Persons (IDP) camp in Dedebit. Rape and sexual violence, and denial and obstruction of humanitarian access were also selected themes for the investigation.

The commission’s two-month investigation into selected incidents and themes found “reasonable grounds” to believe the Ethiopian National Defense Force (ENDF), Tigray forces, and Eritrean Defense Force (EDF) committed war crimes, according to the report. In this case, the report accused the ENDF of using “starvation of civilians as a method of warfare.”

It further stated that it found “reasonable grounds” to believe extrajudicial killings, rapes, and sexual violence were committed by ENDF members “as part of a widespread attack” directed against “the civilian population of Tigray.”

The accusations were part of a joint investigation by the Ethiopian Human Rights Commission (EHRC) and the UN Office of the High Commissioner for Human Rights (OHCHR) that was adopted by the federal government.

The federal government, on the other hand, blasted the commission’s report, adding that it had opposed its formation from the start. It described the report as “substandard quality” and its allegations as “unsubstantiated.”

“It makes grave accusations against the government and its armed forces without offering proof, just based on telephone conversations and web-based submissions. This is irresponsible,” Zenebe Kebede (Amb.), the Permanent Representative of Ethiopia, told Federico Villegas, Human Rights Council president, at the Interactive Dialogue with the commission on September 22, 2022, in Geneva, Switzerland.

As the commission was not allowed to go to the war-affected areas of northern Ethiopia to investigate by the federal government, all the 185 interviews with victims, survivors, witnesses, and other key interlocutors were conducted remotely, it said. Even the governments of Sudan and Djibouti haven’t granted the Commission access to interview Ethiopian refugees within their borders.

Authorities in Benishangul Gumuz Region are preparing a conflict recovery project that would need a 38.5 billion birr budget to be implemented. It is an initiative that arose as the security situation improving.

The plan is expected to be implemented in five years in three phases, with execution scheduled to begin next month.

The region’s sectoral bureaus will start adapting the plan and mobilizing resources based on their needs. The region is drafting a directive that will guide resource mobilization.

The required budget for the recovery plan is nearly six times the region’s 6.7 billion birr budget for the 2022/23 fiscal year.

“Non-governmental organizations and UN agencies have already expressed their interest in supporting the initiative,” Tarekegn Tasisa, the region’s disaster risk management commissioner, said.

The recovery and rehabilitation project, based on a study prepared by the region’s disaster risk management commission, will be implemented in the region’s 17 districts in the Metekel, Kamashi, and Asosa zones. The plan outlined a list of main activities that would be carried out in six sectors, including disaster risk management, agriculture and natural resources, health protection, and education.

The study for the plan was conducted using the regional government’s root-level apparatus. They have identified the extent of the damage, and the commission compiled it, according to the Tarekegn.

Besides the study carried out by the commission, another study is also being prepared led by Assosa University. The university’s study estimated that the region sustained 79.4 billion birr damage due to the conflicts in the past years.

The conflict has resulted in the loss of 16 million quintals of crop, valued at 44 billion birr, according to the study.

“The university’s study has already been presented to the regional government, but it’s not finalized yet. That’s why we are using what we studied. Ours is already ratified by the recovery steering committee,” the commissioner said.

Officials say the security situation in the region is improving now. The number of civilians killed in the past five months is at its lowest.

The region has been a place of horrific civilian killings and conflicts between government security forces and Gumuz rebels since 2019. While the Metekel and Kamashi zones are the main fighting grounds for the rebels, Metekel zone has seen killings targeted at ethnic Amharas.

Even though the region is rich in gold and coal mining resources, investors are not able to mine the reserves, especially in the Kamashi zone. The region ranked second in the country in terms of gold production, with artisans producing more than 90 percent of the region’s gold.

475,384 residents are displaced from their villages due to the insecurity in the region, of which 77,500 are children under the age of five, and 20,000 are breastfeeding mothers, according to the conflict impact assessment. The conflict is also a reason for the destruction of 43,640 houses.

The region, which has been witnessing conflict and the killing of innocent people in various places, saw 113,000 students are out of school due to instability. The destruction of schools has created a difficult situation for students to return to school. In the conflict-affected areas of the region, 201 schools were completely destroyed and 86 schools suffered partial damage.

The region’s 142 health facilities, including 126 health posts, have also sustained damage due to conflicts.

Benishangul Gumuz, which provides agricultural land to investors who engage in large scale farms, has had its 109 agricultural institutions’ warehouses looted and partially or completely destroyed.

The study showed that 291 farmer training institutes and 140 animal health facilities met the same fate.

The recovery and rehabilitation plan has prioritized the implementation of the return of internally displaced people and the rehabilitation of those people in their former homes in a sustainable manner. It also focuses on rebuilding social and economic institutions and providing the necessary equipment for the institutions.

The project need assessment showed that 38.5 billion birr will be needed to implement the plan in disaster risk management, agriculture and natural resources, health protection, education, water irrigation and energy resource development, women, children, and youth sectors, as well as peace building and security sectors.

“The cost of the recovery budget is so much higher than the region’s capacity. But we are planning to mobilize resources from diaspora communities that are from the region,” Tarekegn stated.

Funds from donors including the federal government and the World Bank recovery project are expected to be part of this project.

The Benishangul Gumuz region is one of the six regions, including Tigray, Amhara, and Afar, where rehabilitation project was launched by the federal government together with the World Bank this year. In May 2022, the bank signed a USD 300 million grant to assist the reconstruction, and the federal government has allocated 20 billion birr in the current fiscal year for reconstruction.

In areas that have security threats, the project will be implemented by a third party. The Ministry of Finance has delegated United Nations Office for Project Services (UNOPS) to implement the reconstruction in the Tigray region.

The Ministers of Health and Education studied the damage in all six regions and prepared a report detailing the cost of the five-year reconstruction project.

The Ministry of Education stated that USD 96.5 million is needed to recover from the damage to schools in the Benishangul Gumuz region, while the Ministry of Health stated that USD 22.35 million is needed to recover from the damage in the health sector of the region.

However, the question of equitable distribution of wealth is being raised in the reconstruction project of the federal government. The Boro Democratic Party, which shared power in the region’s government, blamed the federal government for not paying enough attention to reconstruction.

In a statement issued by the party a month ago, the party urged the federal government to pay attention and allocate resources to the replanting zone in the same way that attention and resources are allocated to the destruction and displacement of citizens in northern Ethiopia.

Yohannes Tesema, the party’s Political Sector head, believes the government is not giving enough attention to the recovery as much as it gives to the Amhara and Afar regions.

He claims that out of the USD 300 million granted by the World Bank, the amount of funds allocated for the Benishangul Gumuz region is small.

It says there is no military solution to this conflict

The US Department of State called on “Eritrea and others to cease fueling” the conflict in Ethiopia and urged Eritrea to withdraw its forces from Ethiopian borders. The department accused Eritrea of increasing tensions throughout the Horn of Africa region.

The US also called on “both the Government of Ethiopia and the Tigray regional authorities to halt immediately their military offensives and pursue a negotiated settlement through peace talks under the auspices of the African Union.”

At a press briefing on September 15, 2022, Ned Price, spokesperson of the US Department of State, stated that Ethiopia should look for a non-military solution to the conflict.

“We are increasingly concerned by the growing military activity in northern Ethiopia. We strongly condemn the resumption of hostilities. There is no military solution to this conflict. These actions are inconsistent with the government of Ethiopia and Tigrayan regional authorities’ stated willingness to go to talks,” Price said.

The US special envoy to the Horn of Africa, Mike Hammer, who is in Ethiopia over the week and canceled his expected press brief on Friday, is also advancing a similar position to secure a peaceful resolution to the third wave of war that resumed in Ethiopia on August 24, 2022.

The special envoy is reportedly making efforts to bring warring parties to the table, while Olusegun Obasanjo, the designated AU official to broker peace in Ethiopia, has been silent since the third wave of war broke out.

Both optimism and worry dominated the just-ended Ethiopian year. A year that began with aspirations for wider peace and stability in the nation ended with the resumption of another deadly conflict. In a war with no apparent end in sight, thousands of people are still dying in the highlands. The economy is still in a difficult situation after recovering a little in the last Ethiopian year, on the top of the stockpiled macroeconomic problems.

It was such a challenging year. In the last year, more than the year before, the effects of the one-year-old conflict was felt. This is especially true in terms of the economy. The cost of living remains high despite recent indications that inflation is slowing down nationwide.

“The government found it difficult to contain inflation and in the third quarter of the past fiscal year started to slow down the pace of depreciation of the national currency. Maybe this contributed to stabilize the inflation rate somewhat but it may also have contributed to foreign exchange shortage in the economy,” Patrick Heinisch, an economist said.

Some conflict-affected areas are experiencing a more than 1000 percent increase in commodity prices as a result of severe supply shortages. It is still a problem in the country’s north, particularly in Agew Zone, Tigray Region, and parts of Afar Region.

“Up until the resumption of the war, I was sending money to my family living in Tigray, paying 30 birr for every 100 birr I transfer,” said Kirubel, whose last name is withheld for security reasons. “For obvious reason, this is not something normal in a country with a sound economic condition.”

Kirbuel’s story is actually the tip of the iceberg. Just two months after the previous Ethiopian year began, Ahmed Shide, the Minister of Finance, was among the first to voice concerns about the status of the economy. In the same broadcasted speech on the state broadcaster in November 2021, his comrade Yinager Dessie, the governor of the National Bank of Ethiopia (NBE), did not conceal the fact that the economy was poised to collapse because of the war.

It didn’t take long for Prime Minister Abiy Ahmed (PhD) to react. While also paving the way for a negotiated settlement with the warring party in the North, the Tigray People’s Liberation Front (TPLF), which the Parliament designated as a terrorist organization, his administration declared a humanitarian truce. Humanitarian organizations had relatively easier access to provide food supplies to people in the war-torn region.

First, some progress was made in the effort to bring about peace. The economy showed signs of improvement, and the IMF, which had previously included Ethiopia on its list of nations with unpredictable and unstable economies, predicted that it would rebound. Soon after the ceasefire in North Ethiopia, the other Bretton Woods organization, the World Bank, similarly predicted Ethiopia’s economy would revive.

Though such encouraging developments helped the government rebuild its ties with the West and western financial institutions, they did little to prevent the country’s fundamental problem—the shortage of foreign currency. From approximately USD two billion to barely USD 290.7 million in loans, development partners and lenders cut their commitments.

The net inflow of external debt was negative USD 551 million, indicating that the amount of creditor loans disbursed was less than the principal amount of debt the government was servicing.

Businesses have also faced a financial crisis due to the forex shortage, a situation that has plagued them for decades, though some found last year to be their most difficult ever.

More than any other businesses, those involved in the water bottling industry felt the pinch. Twenty water bottlers had to shut down because they were no longer able to run their businesses due to a lack of inputs, and they had even reached a point where they were unable to pay their employees’ salaries.

Overall, access to foreign currency remains challenging for businesses. At the end of 2021, foreign exchange reserves stood at USD 1.6 billion, or 1.3 months’ worth of imports of goods and services.

The authorities tightened foreign exchange regulations numerous times over the previous fiscal year in response to the shortage, upping the percentage of foreign exchange companies’ must surrendered to the government (central bank) to 70 percent. Even exporters had to deal with the shortage because the restriction prevented them from using more than 20 percent of the foreign exchange they had earned.

Another major economic burden that persisted in the country last year was the widening budget deficit, made worse by the war in the North, which increased spending for military. The budget deficit widened and is now expected to exceed 300 billion birr this year, which is more than twice what it was in the just-ended fiscal year. These difficulties compelled the government to take desperate decisions, such as freezing loans or introducing new taxes, in an effort to increase revenue and narrow the mounting deficit.

However, not every problem can be solved.

For many workers in industrial parks, the suspension of Ethiopia from the African Growth Opportunity Act (AGOA), a trade benefit granted by the US to developing countries so they may export their goods without paying an import duty, has been a bad news.

Due to significant layoffs brought on by the suspension, more than five factories have left the park, and over 5,000 workers have lost their jobs as a result.

“The year has been tough for all workers in Ethiopia. From the inflationary pressure to the war that has made many jobless, they have been in a pickle. Some had to live in poverty since their salary is not enough to cover expenses,” said Kasahun Follo, president of Confederation of Ethiopian Trade Union (CETU), urging employers to consider the challenges and make adjustments in the coming New Year.

Although the amount of jobs created by industrial parks is relatively low compared to the agricultural sector, the country had planned to industrialize. For Heinisch, these efforts are now being thwarted.

“Worryingly, since 2019 the share of the industrial sector in GDP has actually decreased. The trend is likely to have continued in the past fiscal year,” he said.

Despite the difficulties last year, industries did well.

The export of industrial items reached a record-high USD 500 million in exports during the previous fiscal year. However, this is negligible in light of the development in the coffee industry, which generated USD 1.4 billion in revenue during the previous fiscal year. It is a success that has helped officials to record the nation’s record-high exports revenue, which exceeded the USD four billion mark during the previous fiscal year.

Despite some progresses, however, the overall economic condition seems to be in worst shape, according to economists.

“We have undertaken a study and discovered that the economy is not in a stable condition, which is indicated by the unpredictability of the exchange market, the fiscal policy and the forex market, adding to global-wide problems,” said Tewodros Mekonnen (PhD), an economist and a policy analyst.

Another economist, Mengistu Ketema (Prof.), also believes the economy had not been in a good condition last year.

“Inflation was growing, above 30 percent throughout the year. External debt are maturing, thus forcing the country to allocate more budget for debt servicing. The drought in the south also worsened the already tense situation. And when you add all these to the global economic challenges, including the war in Ukraine, it indicates the economy is between a rock and a hard place,” Mengistu said.

For Heinisch, who believes Ethiopia did not experience a “post-COVID” recovery in 2021/2022 as many other countries did, the outlook is more benign, assuming that the war that has broken out again will come to an end quickly and the country can focus on its economic reforms again. “Debt restructuring could free up resources that the country needs for reconstruction but also new investment projects. So there is still reason for hope,” Heinisch concluded.

Both optimism and worry dominated the just-ended Ethiopian year. A year that began with aspirations for wider peace and stability in the nation ended with the resumption of another deadly conflict. In a war with no apparent end in sight, thousands of people are still dying in the highlands. The economy is still in a difficult situation after recovering a little in the last Ethiopian year, on the top of the stockpiled macroeconomic problems.

It was such a challenging year. In the last year, more than the year before, the effects of the one-year-old conflict was felt. This is especially true in terms of the economy. The cost of living remains high despite recent indications that inflation is slowing down nationwide.

“The government found it difficult to contain inflation and in the third quarter of the past fiscal year started to slow down the pace of depreciation of the national currency. Maybe this contributed to stabilize the inflation rate somewhat but it may also have contributed to foreign exchange shortage in the economy,” Patrick Heinisch, an economist said.

Some conflict-affected areas are experiencing a more than 1000 percent increase in commodity prices as a result of severe supply shortages. It is still a problem in the country’s north, particularly in Agew Zone, Tigray Region, and parts of Afar Region.

“Up until the resumption of the war, I was sending money to my family living in Tigray, paying 30 birr for every 100 birr I transfer,” said Kirubel, whose last name is withheld for security reasons. “For obvious reason, this is not something normal in a country with a sound economic condition.”

Kirbuel’s story is actually the tip of the iceberg. Just two months after the previous Ethiopian year began, Ahmed Shide, the Minister of Finance, was among the first to voice concerns about the status of the economy. In the same broadcasted speech on the state broadcaster in November 2021, his comrade Yinager Dessie, the governor of the National Bank of Ethiopia (NBE), did not conceal the fact that the economy was poised to collapse because of the war.

It didn’t take long for Prime Minister Abiy Ahmed (PhD) to react. While also paving the way for a negotiated settlement with the warring party in the North, the Tigray People’s Liberation Front (TPLF), which the Parliament designated as a terrorist organization, his administration declared a humanitarian truce. Humanitarian organizations had relatively easier access to provide food supplies to people in the war-torn region.

First, some progress was made in the effort to bring about peace. The economy showed signs of improvement, and the IMF, which had previously included Ethiopia on its list of nations with unpredictable and unstable economies, predicted that it would rebound. Soon after the ceasefire in North Ethiopia, the other Bretton Woods organization, the World Bank, similarly predicted Ethiopia’s economy would revive.

Though such encouraging developments helped the government rebuild its ties with the West and western financial institutions, they did little to prevent the country’s fundamental problem—the shortage of foreign currency. From approximately USD two billion to barely USD 290.7 million in loans, development partners and lenders cut their commitments.

The net inflow of external debt was negative USD 551 million, indicating that the amount of creditor loans disbursed was less than the principal amount of debt the government was servicing.

Businesses have also faced a financial crisis due to the forex shortage, a situation that has plagued them for decades, though some found last year to be their most difficult ever.

More than any other businesses, those involved in the water bottling industry felt the pinch. Twenty water bottlers had to shut down because they were no longer able to run their businesses due to a lack of inputs, and they had even reached a point where they were unable to pay their employees’ salaries.

Overall, access to foreign currency remains challenging for businesses. At the end of 2021, foreign exchange reserves stood at USD 1.6 billion, or 1.3 months’ worth of imports of goods and services.

The authorities tightened foreign exchange regulations numerous times over the previous fiscal year in response to the shortage, upping the percentage of foreign exchange companies’ must surrendered to the government (central bank) to 70 percent. Even exporters had to deal with the shortage because the restriction prevented them from using more than 20 percent of the foreign exchange they had earned.

Another major economic burden that persisted in the country last year was the widening budget deficit, made worse by the war in the North, which increased spending for military. The budget deficit widened and is now expected to exceed 300 billion birr this year, which is more than twice what it was in the just-ended fiscal year. These difficulties compelled the government to take desperate decisions, such as freezing loans or introducing new taxes, in an effort to increase revenue and narrow the mounting deficit.

However, not every problem can be solved.

For many workers in industrial parks, the suspension of Ethiopia from the African Growth Opportunity Act (AGOA), a trade benefit granted by the US to developing countries so they may export their goods without paying an import duty, has been a bad news.

Due to significant layoffs brought on by the suspension, more than five factories have left the park, and over 5,000 workers have lost their jobs as a result.

“The year has been tough for all workers in Ethiopia. From the inflationary pressure to the war that has made many jobless, they have been in a pickle. Some had to live in poverty since their salary is not enough to cover expenses,” said Kasahun Follo, president of Confederation of Ethiopian Trade Union (CETU), urging employers to consider the challenges and make adjustments in the coming New Year.

Although the amount of jobs created by industrial parks is relatively low compared to the agricultural sector, the country had planned to industrialize. For Heinisch, these efforts are now being thwarted.

“Worryingly, since 2019 the share of the industrial sector in GDP has actually decreased. The trend is likely to have continued in the past fiscal year,” he said.

Despite the difficulties last year, industries did well.

The export of industrial items reached a record-high USD 500 million in exports during the previous fiscal year. However, this is negligible in light of the development in the coffee industry, which generated USD 1.4 billion in revenue during the previous fiscal year. It is a success that has helped officials to record the nation’s record-high exports revenue, which exceeded the USD four billion mark during the previous fiscal year.

Despite some progresses, however, the overall economic condition seems to be in worst shape, according to economists.

“We have undertaken a study and discovered that the economy is not in a stable condition, which is indicated by the unpredictability of the exchange market, the fiscal policy and the forex market, adding to global-wide problems,” said Tewodros Mekonnen (PhD), an economist and a policy analyst.

Another economist, Mengistu Ketema (Prof.), also believes the economy had not been in a good condition last year.

“Inflation was growing, above 30 percent throughout the year. External debt are maturing, thus forcing the country to allocate more budget for debt servicing. The drought in the south also worsened the already tense situation. And when you add all these to the global economic challenges, including the war in Ukraine, it indicates the economy is between a rock and a hard place,” Mengistu said.

For Heinisch, who believes Ethiopia did not experience a “post-COVID” recovery in 2021/2022 as many other countries did, the outlook is more benign, assuming that the war that has broken out again will come to an end quickly and the country can focus on its economic reforms again. “Debt restructuring could free up resources that the country needs for reconstruction but also new investment projects. So there is still reason for hope,” Heinisch concluded.

The envoy is wrapping up two weeks in the Horn region.

“He remained actively engaged with the Government of Ethiopia, with the Tigray regional authorities, with the African Union, and with international partners to seek to advance an important effort to bring peace. He met on September 12 with the AU’s high representative, Obasanjo,” stated Price.

On September 16, 2022, the US embassy in Addis Ababa also stated that Hammer held productive meetings with Ethiopian government officials, civil society representatives, the African Union, and international partners.

Moussa Faki, the AUC chairperson, who extended Obasanjo’s mandate on September 10, 2022 to continue engaging with warring parties in Ethiopia, also met with Hammer on the next day. On the other hand, the UN Security Council, which was set to discuss the situation in Ethiopia, was postponed.

The five months of ceasefire and humanitarian assistance to Tigray were shattered when the third wave of war broke out on August 24, 2022. The ongoing peace initiative under the AU umbrella hit a deadlock, which the special envoy is trying to reactivate.

The Tigray regional government, which has been refuting AU-led peace negotiations prior to the latest war, also issued a statement on September 11, 2022, agreeing to negotiate under the AU umbrella.

Nonetheless, reaching a ceasefire agreement and resuming the peace talks remains farfetched, worsening the humanitarian crisis, as Eritrean forces are reportedly drawn into the war and regionalizing the conflict.

“These actions are worsening the humanitarian situation at a time of pronounced drought and food insecurity,” stated Price.

He called on the government of Ethiopia, Tigrayan authorities, and all parties to allow the unhindered delivery of humanitarian relief.

“Humanitarian assistance should not be used for military purposes—it should be used to save lives. And we urge the parties to cease the fighting and to begin talks under the auspices of the AU as soon as possible. Peace needs to be given a chance. Too many people have died, and too many more are suffering,” he added.

“Our region doesn’t have the capacity to mobilize this amount of budget for the recovery. It definitely needs the federal government’s support more than this,” he asserted.

The commission’s requests to various UN entities operating in Ethiopia to share documents and materials of interest were largely deflected, or responded to after an inordinate delay. Its request to access the internal database of the joint investigation team was also delayed.

“Despite these challenges, the Commission is confident that its findings are supported by information that satisfies the standard of proof for UN investigations,” the report reads.

The commission’s recommendation, which asks the UN Security Council (UNSC) to include the war in northern Ethiopia on its agenda for the 14th time since December 2020, worries the Ethiopian government more than the report’s findings and conclusions do.

In order to stop further violations and abuses of international human rights law and humanitarian laws, it also calls on the council to take action targeted at restoring peace, stability, and security in the area. During a session held this week, officials of the federal government have already expressed their resentment at the recommendation of the commission.

“The Commission’s political pronouncements referring to the UN Security Council are ultra-virulent and betray political motivations that go beyond human rights,” Zenebe said.

It is a sentiment shared by countries that are members of the Human Rights Council.

“The Commission went beyond its mandate and made a statement on things that were not in its remit,” said Konan François, a representative of Côte d’Ivoire on behalf of a group of African States.

Wondemagegn Tadesse (PhD), an international human rights lecturer at Addis Ababa University, believes there are three options in which the UN Human Rights Council can decide to approve the commission’s report and recommendations. The first option is to end the matter within the council itself.

“In this case, there will be nothing more to do than call on the warring parties in the country to implement these recommendations,” Wondemagegn explained.

The second option is to refer the matter to the UN General Assembly. “However, since the assembly gathers over a long period of time, it may not have a big impact on Ethiopia,” he added.

Apart from that, even if it is presented to the General Assembly, its voting system does not have veto power, so there is a high possibility that it will not be approved. A large number of developing countries at the General Assembly will not vote in favor of the resolution as they consider such decisions as interference, according to Wondemagegn. Moreover, experience so far shows that if the country in which the decision is made does not accept the decision, the chances of its implementation are low.

However, if issues are referred to the UNSC, the third option may take a different path than the two options.

“The Security Council is the only institution that has the power to take military action among the UN institutions, but as we always see, the proposal to the Council is overturned by the veto power, so it does not make a difference,” Wendmagegn asserted.

In the past two years, the council has not passed any decisions on Ethiopia. The war in northern Ethiopia and the Great Ethiopian Renaissance Dam have been on the agenda tabled before its members for discussion. When a resolution was proposed, China and Russia, who have veto power, supported Ethiopia.

For Wondemagegn, even if the Security Council passes a resolution, it is difficult to implement it. If the Council decides to send troops to stop human rights abuses, there may not be many countries to contribute troops to a country as large as Ethiopia.

“Even if countries contribute soldiers and send them to Ethiopia, they will have to fight a war with Ethiopia because the Ethiopian government will not accept the decision. No one wants this,” he said.

Another human rights expert, who asked not to be named, explained that even if the UN Human Rights Council does not pass any decision as a result of this report, countries that want to take unilateral action can use it as a cause for their measures.

“Those like the US and the EU may use the report to suspend loans and impose sanctions,” the expert said, adding, “but this would only hurt the people affected by the war more.”

The Ethiopian Human Rights Commission also agrees with this idea.

“Decisions should be made to reward the people affected by the war and bring reconciliation, not where parties with differences of opinion are dragged into a corner,” said the Deputy Chief Commissioner for Human Rights, Rakeb Melesel, while underscoring that EHRC is ready to share its database if the Commission is willing to undertake another investigation.

The Ethiopian government is exerting pressure to block any attempts by the Commission to extend its mandate. “The Council should reject the report and oppose any attempt to extend the mandate of this Commission beyond December 2022,” the government emphasized.

Farmers reject the much-anticipated Bt cotton.

Cotton growers in Ethiopia resort to unauthorized GMO cotton illegally smuggled from Sudan. Bt-RR cotton seed is currently being cultivated in Afar, Metema, Benishangul Gumuz and Gambella regions after being smuggled via Metema, Humera and other border areas between Sudan and Ethiopia.

Once the first generation of open-pollinated (OT) is acquired, it can be sown for between three and five years, after which the seed cannot be recycled. Ethiopian cotton farmers are currently buying the smuggled cotton seeds and multiplying them locally at 10,000 birr to 13,000 birr per quintal.

Bt-RR originated in Brazil, and was largely cultivated in Sudan. Most other GM cotton seeds are non-OT, which means they cannot be used after the first year. As a result, the farmer has to buy the seed every year.

The cotton farmers The Reporter talked to underlined that the smuggled cotton seed is preferred mainly because it resists bollworm, which has been devastating the existing local cotton breeds. This is because a one-time chemical spray on the vegetation is also highly effective in eliminating all weeds except the cotton itself.

The productivity of the Bt-RR is between 10 and 14 quintals per hectare, slightly superior to the local varieties. But the Bt-RR is advantageous mainly because it beats the bollworm, and requires less pesticide.

“A number of farmers are now multiplying the Bt-RR seed and selling it to cotton farmers across the country. The farmer liked the seed, instead of the local existing varieties and the GM cotton approved by the government,” said a manager of a large-scale cotton farming company. He cultivated the new seed on 200 hectares in Amhara regional state.

Melkamu Telake, board chair of the Ethiopian Cotton Producers, Ginners, and Exporters Association, says farmers are resorting to smuggled seed as access to other cotton seeds depletes. “The government failed to provide the type of seed preferred by the farmer.”

After the Parliament legislated the GMO proclamation in 2015, the Biosafety and Invasive Alien Species Follow-up and Control directorate at the Environmental Protection Authority (EPA) and EIAR commercialized Bt cotton for the first time in 2019.

However, a number of commercial cotton farmers in Gambella have tried Bt cotton and lost interest after the first year. The first reason was that the authorized Bt cotton could not effectively resist the bollworm.

The other major reason was that the authorized Bt cotton, which is imported from India, is expensive costing USD 28 per kilo. As a result, the EIAR picked Indian-based JK Agri Genetics Ltd. to open a subsidiary company in Ethiopia and multiply the seeds in Ethiopia to avoid the forex problem required to import the seeds annually. However, this plan also bore no fruit, as the Ethiopian farmers rejected the authorized Bt cotton.

“All the cotton farmers in Ethiopia are boycotting the authorized Bt cotton. It did not effectively resist the bollworm. It necessitates the repeated application of insecticides and pesticides. We have to buy the seeds every year at an expensive price. Plus, our farmers lack the technology required to cultivate the authorized Bt cotton with the right agronomical practices. So the farmers are resorting to the smuggled variety, instead,” said Melkamu.

Mesele Mekuria, Cotton Development Director at the Ethiopian Textile Industry Development Center, also said the authorized Bt cotton did not work.

The productivity of existing cotton seeds in Ethiopia, which are Ggedera and DP90, dropped, especially after the varieties were in use for over 30 years and were unable to resist diseases. Currently, rain-based farming of traditional seeds offer anywhere between eight quintals and 28 quintals per hectare.

However, if irrigation is coupled with precise agronomical practice, the local seeds can offer between 45 quintal and 54 quintals per hectare, according to Melkamu.

“Big cotton farmers like Lucy in Afar, and other farmers in Arbaminch have achieved this level of productivity. But there are certain interest groups who are trying to enforce certain Bt cotton on Ethiopia. We need GMO cotton only after we achieve maximum productivity with the existing local varieties,” Melkamu said.

These interest groups, according to him, do not want the local varieties. “Global GMO patent holders are behind these interest groups. Once we start using such GMO varieties, we will be their slaves because the existing local varieties will be ousted in five years and we have to buy their seed every year.”

Yet, other cotton farmers argue that the EIAR has to take samples of the Bt-RR that are smuggled from Sudan, study them, and approve them for Ethiopian farmers.

The meager productivity of local cotton farming has been the Achilles heel for Ethiopia’s aspirations to become the manufacturing hub of Africa, mainly capitalizing on textiles, garments, and apparel.

Damage to health and education infrastructure in six regions of Ethiopia resulting from conflicts need a USD 3.6 billion recovery budget, according to a new Recovery and Rehabilitation Plan document released by the Ministries of Health and Education.

The ministries outlined an intervention plan for the five-year rehabilitation project that will be implemented in three phases. The recovery intervention plan is part of the “Response – Recovery – Resilience” project launched by the Ministry of Finance in March 2022.

The ministries assessed the damage that occurred in Tigray, Afar, Amhara, Benishangul-Gumuz, Oromia, and Konso zones of the Southern Nations Nationalities and People’s (SNNP) regions. The assessment and recovery plan were prepared by the government, with a technical assistance from the World Bank.

Education suffered the most harm. According to the recovery plan, the sector requires USD 2.2 billion to recoup lost learning and rebuild destroyed facilities.

The Ministry of Health’s plan proposed a USD 1.4 billion intervention.

As the assessment shows, the conflict destroyed 2,681 schools completely and another 4,158 schools partially in these regions. 38 Technical and Vocational Education and Training (TVET) institutions and three universities have also sustained varying levels of damage. The number of destroyed TVETs and universities in the Tigray region is not included due to a lack of data.

This destruction of the education sector has affected more than 4.2 million learners and close to 200,000 teachers and education staff, the report reads.

The number of people affected by the damage to the health sector is estimated to be close to 24 million people. The people in conflict-affected area have been “adversely impacted.”

The assessment showed that 3,217 health posts, 709 health centers, and 76 hospitals were partially or completely damaged in the six conflict-affected regions.

Among the six regions that were affected, the Amhara region suffered the most damage to the sectors. Out of the 3,217 health facilities that sustained damage, 69 percent of them are found in the Amhara region. Furthermore, out of 248 ambulances that were damaged or looted, 50 percent were in the region.

The region’s 4,020 schools have also been destroyed, accounting for 58.7 percent of the total damage across all six areas.

However, given the region’s penetration of health institutions, the damage to health facilities in Tigray is substantially greater. 82.9 percent of the region’s hospitals have been damaged. The same fate has befallen Tigray’s 76 percent of health posts and 50 percent of health centers.

In the health sector, out of the overall estimated recovery cost, USD 1.4 billion, the largest share, USD 501.19 million, is for health centers. General and specialized hospitals follow at a cost of USD 342.54 million.

In the education sector, USD 1.36 billion is planned to recover damaged primary and secondary schools in the six regions.

The recovery and reconstruction program will be implemented for five years in three phases, according to the documents prepared by the ministries. The program’s early recovery phase needs will be met within the first six months. Short-term demands range from six to 24 months, whereas medium-term needs range from three to five years.

According to the ministry’s Stakeholder Engagement Plan document, the implementation of the program will be led by a Federal Project Coordination Unit (FPCU) in the Ministry of Finance. Various sectoral ministries and other mandated offices are responsible for the implementation of the program.

In the Tigray region, where the ministries have no access, the recovery project is planned to be implemented by a third party. The Ministry of Finance signed a third-party implementation agreement with the United Nations Office for Project Services (UNOPS) last month.

The World Bank granted USD 300 million in May for the implementation of this project. While the government, which has just begun its fiscal year, has allocated 20 billion birr.

Abiy Ahmed’s (PhD) time as Ethiopia’s prime minister is not without difficulties. He even called himself “a Prime Minister with no time to even undergo a medical checkup” in front of lawmakers. Since taking over after Hailemariam Desalegn’s departure, Abiy has ruled a nation that has been plagued by economic distress, political unrest, and even a civil war that has lasted for more than a year. On top of the never-ending problems he dealt with, with most of the incidents occurring in the northern part of the country, there was another heavy task that challenged his leadership. That is the statehood question brought by ethnic groups living in the south.

A few months after taking office, Abiy was inundated with requests from the leaders of more than a dozen zones and woredas, placing pressure on his government to help them realize their desire for a regional state. Participation in the endeavor to achieve statehood recognition ranged from low-level bureaucrats to zonal leaders and officials in the federal government. Ten zones filed a resolution with the House of Federation (HoF) adopted by their separate councils to hold a referendum on statehood. Abiy was aware right away how urgent it was to fulfill the regions’ desire.

Soon after taking office, Abiy traveled to almost all of the South Region’s ethnically divided zones. It was an attempt to win political support as he rushed to replace the Ethiopian Peoples’ Revolutionary Democratic Front (EPRDF) at the time and establish the ruling Prosperity Party. But his administration’s stance on their desire for statehood was the main topic that dominated the debates at the zones. He promised to respond to their request, which by all legal criteria is legitimate.

However, it was easier said than done to keep the pledge. Sidama was the first regional state to be established following a referendum, with 98 percent of voters supporting the establishment of a new regional state. But civilians paid a price for the government’s efforts to push through Sidama’s desire for statehood, as enraged protesters set fire to the homes of many Hawassa inhabitants and forcibly evicted many others.

In particular, ethnic Amharas were targeted in all incidents involving statehood questions across the South Region. The Attorney General recently released a report that the homes of ethnic Amharas were burned to ashes, which led to the arrest of dozens of people on suspicion of being involved in the violence.

It appears the government understood the consequences of ignoring statehood questions were brought by Ethiopians to the south. Abiy formed a team of experts and high-level government officials two years ago to launch a study on the issue after realizing the consequences of disregarding statehood requests.

The team sent out three recommendations. The first option is to maintain the South Nation, Nationalities and People’s Regional State in its present configuration while making changes to the region’s appropriate number of political seats. The second suggestion was to establish the Sidama region while keeping other ethnic groups as members of the SNNPR. The third involved splitting the region into five, clustering the ethnic groups together.

The third alternative seems to be what the federal administration chose after the first two became unworkable due to rising animosity among ethnic group elites in South Ethiopia.

“I think it’s a step in the right direction, but caution should be exercised to avoid making the same mistake as SNNPR, which is now being dismantled due to growing resentment over resource sharing, political participation, and infrastructure development,” said Keyredin Tezera, assistant professor of Social Anthropology who participated in the study carried out at the request of the federal government.

Following Sidama’s victory for independence from the SNNPR, Kaffa, Sheka, Bench Sheko, Dawuro, and West Omo Zones, as well as the Konta Special District, joined to form the South West Region through a referendum. The local council members of five special Woredas – Amaro, Ale, Basketo, Burji, and Derashe – as well as the Konso, Gedeo, Gamo, Gofa, South Omo, and Wolayta zones voted last week to restructure their administrative units into a newly established regional state.

In a similar fashion, members of the Hadiya, Halaba, Kembata Tmbaro, Silte, and Yem Special Woreda local councils have begun the process of creating a new regional state. However, activists and political organizations active in the zones contested the action.

The Gurghe people, with whom the federal government wants to construct a cluster along with Hadiya, Silte, Kembata, Silte, and Yem, are among those who have objected to the concept of forming regions in clusters. The Guraghe zone has a population of approximately six million people and a land area of approximately 5932 sq.km. Its council was one of the zones that submitted a request to hold a vote on becoming a separate region.

Social activist, Misbah Kedir, is one of the ethnic Guraghes who have contested the federal government’s proposal to partition SNNPR into five cluster areas. He thinks it is wrong for the central government to “forcefully” incorporate the Guraghe Zone into the cluster.

“In addition to Guraghes, other zones that had voted to create a cluster region had also supported the motion after receiving an order from the federal government,” said Misbah.

Wolayita’s opposition wants to be heard too.

“First and foremost, the council, whether in Wolayita or other zones, does not have the power to accept such a resolution on behalf of the people because their term period ended almost seven years ago. Second, this is something that the cadres, not the people, want,” said Amanuel Mogiso, leader of the opposition Wolayita National Movement, which is active in Wolayita Zone.

Amanuel exhorts the federal government to pay attention to what the people want, comparing the situation to sitting on a ticking time bomb. “The Wolayita people have peacefully expressed a desire for their own territory. They need to be heard,” he added.

The politician urges the federal government to avoid meddling and let ethnic communities in SNNPR, including Wolayita, exercise their constitutional rights. “To reject their right to have their own regional state is unlawful,” Amanuel continued.

Jember Abdo, a legal expert, agrees.

“The state is turning into an enabler of violence. In the case of Guraghe, this is what I saw. The people exercised their right to form a region but the federal government’s response was to militarize their hometown,” Jember said urging the federal government to uphold the constitution.

There are economic reasons driving the pursuit of statehood.

“In order to obtain a permit from SNNPR officials, farmers and businessmen must travel hundreds of kilometers from distant areas in the Guraghe zone to Hawassa. And after the cluster region is established, they might be required to follow suit in order to obtain a permit from Hossana, which will likely serve as the cluster region’s capital city,” Misbah said.

Amanuel is worried too.

“The political structure is to blame for the underdevelopment of zones. When you have a significant budget and tax in a region, it is not the same,” Amanuel concluded.

Regardless of the final outcome of the campaign to achieve statehood for Ethiopians in the South, there are still many unknowns about the future of the region, which will depend on the government’s decision on how to manage the grievances of the ethnic groups it intends to organize into a cluster region.

Sergey Lavrov, Russia’s Foreign Minister, affirmed that his country is in favor of giving Africa a permanent seat in the UN Security Council. The Foreign Minister also concurred with Ethiopian officials that the Security Council should undergo reform in a bid to take into account the current state of the world.

Lavrov arrived in Addis Ababa on July 26, 2022 for a two-day trip, where he met President Sahlework Zewde; Demeke Mekonen, deputy prime minister and foreign minister, and other high officials. Lavrov also traveled to Egypt, Congo, and Uganda, before wrapping up his Africa trip by conferring with the diplomatic community at the AU headquarters.

“Ethiopia and Russia share similar stances on issues on the global and regional agenda. These approaches rely on adherence to international law, particularly the tenets of the UN charter and the respect for the sovereign rights of states,” said Lavrov.

During the 35^th ordinary session of the AU summit in February 2022, PM Abiy Ahmed (PhD) exceptionally raised the urgent topic of reforming the UN and securing a permanent seat for Africa in the UNSC.

As a result, the AU passed a resolution that requests “full representation of Africa in the United Nations Security Council, including not less than two permanent seats in the United Nations Security Council with all the prerogatives and privileges of permanent membership, including the right of veto.

The AU also proceeded to request the Committee of Ten Heads of State and Government to continue to intensify its engagement at the highest level with other interested and regional groups and key stakeholders, including the five permanent members of the UN Security Council, with a view to building on progress made in advancing, canvassing and promoting the Common African Position.

The AU’s quest for reform of the UN began in 2005 when African states approved the Ezulwini consensus and Sirte Declaration on the Reform of United Nations Security Council.

In 2010, President Goodluck Jonathan of Nigeria, told the UN General Assembly, “The exclusion of Africa from the permanent member category of the Security Council can no longer be justified. We urge the UN to quicken the pace of its reforms. Not only to better reflect the current global realities but also to ensure that it enjoys genuine legitimacy.”

Africa does not have a proportional representation in the global body.However, the consideration has become critical, as Africa is frequently impacted by decisions over which it has no say.

In particular, both Ethiopia and Russia have been haunted by the UNSC particularly since last year. In the past year, the UNSC discussed sanctioning Ethiopia in relation to human rights violations in the Tigray war. However, the considerations were vetoed by Russia and China. Ethiopia also paid back by refraining from voting, when the UNSC introduced emergency voting in March 2022 to condemn Russia’s invasion of Ukraine.

Demeke appreciated Russia’s “unwavering support during difficult times of need, particularly in the recent struggle to safeguard Ethiopia’s sovereignty.’

The major purpose of Lavrov’s trip to Africa, amidst a propaganda war with the west, is also to secure Africa’s support in similar UN voting scenarios in the future.

Gaining a permanent seat on the UN Security Council will position Africa as a balancing force between the power struggles of the east and west, as well as the rapidly changing global geopolitics. However, reforming the western-dominated organization might not be easy, according to scholars. But once the UN begins processing the AU’s request, Russia and China can play a decisive role in making Africa earn its place in the UN structure.

Over 60,000 foreigners have registered so far

Ethiopia’s Ministry of Foreign Affairs urged foreigners with expired visas and resident permits to get registered in 125 selected areas of registration established for this purpose.

Speaking at a press conference on Thursday, Ministry Spokesperson Meles Alem (Ambassador) has urged all foreign nationals living in Ethiopia without proper documents to be registered immediately before authorities start to take legal action as per the international law Ethiopia has signed.

Foreigners without any visa or residence permit, as well as refugees or asylum seekers requesting status and residing in Addis Ababa and its vicinities with or without an urban refugee permit, are also requested to register as of July 25, 2022.

According to Meles, within the last five days of the official announcement for registration, over 60,000 people have registered from countries including Canada, America, Eritrea, Congo, Italy, Syria, China, Turkey, Ghana, Burundi, Liberia, India, Bangladesh, South Sudan, and other countries.

The first phase of registration sites is installed in Addis Ababa and some Oromia administrative zones, and the second round of registration will be opened soon in regional states and the Dire Dawa City administration, the spokesperson told the reporter.

Registration is conducted under the auspices of the Immigration and Citizenship Service, through the Vital Events Registration Offices of all Woredas and the Immigration and Citizenship Service, as per its mandate given by a proclamation to register and administer legal permits for foreign nationals living in Ethiopia.

“We have started this to make sure that immigration work is proceeding as per the legal procedures,” said Meles (Ambassador), adding that there is no further intention of expelling or any other form of stunt.

The spokesperson has further called on foreigners to take advantage of this chance before officials start to take legal measures against those who failed to register as per the rule. However, the formal registration process will not be applied to the diplomatic community.

Over 180,000 foreigners are expected to be registered in Addis Ababa, Meles added.

In a similar presser, the spokesperson announced the cancellation of 162 million US dollars of rolling debt by the Russian government, which Ethiopia has borrowed since the Soviet Union period. According to Meles, Russia has changed the modality from debt to a development grant for purposes of modernizing the Melka Wakana Hydroelectric Power Station and upgrading Balcha Hospital’s technical capabilities.

Over 60,000 foreigners have registered so far

Ethiopia’s Ministry of Foreign Affairs urged foreigners with expired visas and resident permits to get registered in 125 selected areas of registration established for this purpose.

Speaking at a press conference on Thursday, Ministry Spokesperson Meles Alem (Ambassador) has urged all foreign nationals living in Ethiopia without proper documents to be registered immediately before authorities start to take legal action as per the international law Ethiopia has signed.

Foreigners without any visa or residence permit, as well as refugees or asylum seekers requesting status and residing in Addis Ababa and its vicinities with or without an urban refugee permit, are also requested to register as of July 25, 2022.

According to Meles, within the last five days of the official announcement for registration, over 60,000 people have registered from countries including Canada, America, Eritrea, Congo, Italy, Syria, China, Turkey, Ghana, Burundi, Liberia, India, Bangladesh, South Sudan, and other countries.

The first phase of registration sites is installed in Addis Ababa and some Oromia administrative zones, and the second round of registration will be opened soon in regional states and the Dire Dawa City administration, the spokesperson told the reporter.

Registration is conducted under the auspices of the Immigration and Citizenship Service, through the Vital Events Registration Offices of all Woredas and the Immigration and Citizenship Service, as per its mandate given by a proclamation to register and administer legal permits for foreign nationals living in Ethiopia.

“We have started this to make sure that immigration work is proceeding as per the legal procedures,” said Meles (Ambassador), adding that there is no further intention of expelling or any other form of stunt.

The spokesperson has further called on foreigners to take advantage of this chance before officials start to take legal measures against those who failed to register as per the rule. However, the formal registration process will not be applied to the diplomatic community.

Over 180,000 foreigners are expected to be registered in Addis Ababa, Meles added.

In a similar presser, the spokesperson announced the cancellation of 162 million US dollars of rolling debt by the Russian government, which Ethiopia has borrowed since the Soviet Union period. According to Meles, Russia has changed the modality from debt to a development grant for purposes of modernizing the Melka Wakana Hydroelectric Power Station and upgrading Balcha Hospital’s technical capabilities.

Special Forces of Somali regional state and a coalition of other regional and federal security forces have conducted an all-out counter attack to purge Al-shabab fighters that entered Ethiopia’s borders on Friday. The regional government deployed hundreds of Special Forces to conduct the operation.

“A number of Al-shabab fighters entered the Ethiopian border, after they conducted an attack at a time nobody expected. They first engaged with Somali Special Forces. And heavy casualties occurred on both sides. But we are clearing them out,” said an official in the regional government, who spoke to The Reporter requesting to remain anonymity since the federal government is also involved and information is to be disseminated from the center.

“We have also captured their fighters, and the operation will continue until they are cleared out from the area,” added the official.

The terror group first attacked two border towns in Somalia’s side on July 20, 2022, on the same day Somali regional state officials convened to evaluate its security forces performance.

After the first clash at Yeed and Aato towns in Ethio-Somalia border, the militants reportedly killed twenty Ethiopian forces including three civilians. The group lost 63 of its own.

The al-Qaeda linked group tried to enter Ethiopia through Afder zone in southern part of Somali region.

Apart from a strong presence by Ethiopian forces in the border areas, Ethiopia also deployed close to 4,000 troops in Somalia under the AU Transition Mission in Somalia (ATMIS), a reconfigured version of the former AU Mission in Somalia (AMISOM). Ethiopian troops maintain a stronghold in Baidowa.

However insiders question why Al-shabab is attacking Ethiopia at this moment.

“The attack is intended to divert the attention of Ethiopia. Al-shabab is conducting the attacks in coordination with the TPLF and other insurgents in Ethiopia,” said a security expert who focuses on Al-shabab.

Other insiders also link the rising Al-shabab attacks with the instability in Ethiopia. The restructuring of AMISOM and controversies shadowing the continuity of ATMIS, is also contributing to Al-shabab’s resurrection.

Over the past few months, Al-shabab’s attacks have evolved from suicide bombings to attacking military bases in Somalia, including an AU military base. Experts stress that the group is gaining momentum as Horn of Africa countries are occupied with domestic conflicts and the EU, the largest financer of AMISOM/ATMIS, is backtracking.

A few weeks ago, the newly elected Somalia President, Hassan Sheikh Mohamud said negotiations should be considered with Al-shabab, a rare gesture, which is becoming almost a shadow state.

However, the militant group in a statement said it fights to establish an Islamic state in the Horn.

In a continued conflict in West Wollega Zone, over 1,105 civilians are killed this year, including 28 officials who were shot in one day. The zone has also lost properties worth over three billion birr to extended conflict during the just ended fiscal year.

Reports of the devastating impact of the conflict presented to the Caffee Oromia, council of the Oromia regional state, which held its annual meeting over the week. Gammachis Dabala, administrator of West Wollega zone, told the council that both ethnic Amhara and Oromo are killed in his zone.

The regional government has repeatedly launched operation to eradicate the Oromo Liberation Front (OLF-Shene) group, which designated terrorist by the House of Peoples Representative (HPR) and still maintaining West Oromia as its stronghold. During the last month alone, the group has killed hundreds of civilians, according to Ethiopian Human Rights Commission (EHRC) reports. PM Abiy Ahmed called it “a massacre.”

Most of the zones of Oromia are currently under threats of the insurgent group, according to official reports. Loss of life, property damages, and closure of schools are also tolling across the regional state. In North Shewa alone, some 195 schools remain closed, while over 75,000 students were out of school, according to the report presented during the Caffee meeting.

Taye Dendea, member of the Oromia Prosperity party and state minister of Peace, was at dismay after attending the Caffee meeting. “Last year, only few woredas of Oromia were affected by conflict. Currently, eight zones of Oromia have security threats. We failed the people that elected us just last year. The Oromia Regional Government failed to fulfill its duty to protect the civilians. The damage up on our people is shocking. Externalizing the problem cannot be a solution,” he wrote on Facebook after the meeting was concluded on Friday.

The state minister also harshly criticized the budget allocation of the just started 2022/23 is not enough to fight the insurgents. Nearly 400 million birr is allocated for the regional security budget, which the state minister argues should be more than one billion birr. This accounts for less than one percent of 158.6 billion birr budget approved by the Caffee.

However, the state minister did not mention shortcomings of his ministry why the insurgent group is remaining at large.

Businesses that are registered in Tigray region as a federal taxpayer but are currently located outside the region will be paying their taxes at the Northwest Branch of the Ministry of Revenue in Addis Ababa.

The federal revenue that should have been collected in the region will be collected directly by the ministry. The tax that should have been collected by the regional government will be deposited in a trust bank account.

The ministries of finance and revenue are implementing this temporary procedure because organizations and individuals registered as taxpayers in Tigray are having a difficulty to continue their business activities in other parts of the country, according to Abaynesh Abate, the ministry’s tax declaration director.

Despite their desire to continue working in their current location, the taxpayers were unable to renew their business licenses, vehicles or construction equipment.

Abaynesh said that they could not obtain loans, bid on contracts or receive other government services. “Some of them even claimed that the house they rented for their business was in trouble since their business license had not been renewed.”

More than 100 complaints from Tigray’s taxpayers have been lodged to the ministry, and the number continues to grow. The majority are taxpayers who must pay taxes to the regional government.

Abaynesh says among the complainants, ten are Tigray registered firms that are managed by Commercial Nominees and pay federal taxes.

She explained that after the ministry informed the Ministry of Finance about the complaint in April, it allowed taxpayers to get a temporary tax clearance through a temporary procedure or register as taxpayers elsewhere.

In a letter written by the Ministry of Finance to the Ministry of Revenue last month, it acknowledged the regional government’s authority to collect the tax revenue in Tigray region.

The minister cited Article 96 of the Constitution to explain saying, “Since the income collected from individual businessmen and regional public enterprises is a regional income, it is clear that it is the regional government that can levy and collect tax.”

On the other hand, the letter explains that the tax collected from private organizations located in the region is the joint income of the federal and state governments, levied and collected by the federal government. But the income collected from federal public enterprises located in the region is the income of the federal government.

Nevertheless, since both taxpayers registered in Tigray are facing difficulties to conduct their activities due to the “emerging security problem,” State Minister, Eyob Tekalegn, in a letter stated that it is necessary to establish a temporary system.

The Ministry of Revenue, which has designated the North West branch in Addis Ababa’s Lideta neighborhood, will ensure that these taxpayers receive their tax clearance.

Abaynesh added that a request has been made to the Ministry of Finance to open a trust bank account where regional taxpayer revenue will be put.

“It will be held in a trust for later transfer to the region,” she explained.

According to Abaynesh, the ministry would only collect the taxes submitted by taxpayers because there is no means to check how much the region’s taxpayers owe.

“We don’t have any information to show how much they should be paying at that point. When the situation in the region stabilizes, it will be thoroughly examined” Abaynesh elaborated.

If taxpayers want to shift their workplace to their current address after receiving their tax clearance, registrations will be completed at the preferred address.

Under typical circumstances, changing a company’s address requires amending the company’s establishment document and submitting meeting minutes. Providing permission to change address is the authority of the regional government. All these requirements are not necessary expected to be meet in the temporary procedure.

However, even though both federal and state taxpayers registered in the state will be issued a tax clearance certificate from the Ministry of Revenue, they cannot sell their property. According to the Ministry of Finance’s letter, it is impossible to verify whether they have tax debt or not in the current situation.

Berhane Mewa is not only the former president of the Ethiopian and Addis Ababa Chamber of Commerce and Sectoral Associations, but is also a lifetime patriot in Ethiopia’s private sector struggles against state domination in the economy. Before he was forced into exile eighteen years ago by the EPRDF regime, he took up the struggle to create an independent chamber system and a real private sector in Ethiopia.

An industrial chemist by profession, Berhane came back to Addis to process a pharmaceutical investment license, to the tune of USD 22 million. He already has a plastic and rubber factory, which he established before his exile to the US.

Despite positive signs in the politics arena, Berhane argues the chambers system is still far from defending the private sector’s interests and contributing to the economy. Ashenafi Endale was granted audience. Excerpts:

The Reporter: What was at the core of your struggle for the Ethiopian private sector?

Birhane Mewa: I was forced to leave Ethiopia eighteen years ago. The government at the time was not happy with struggle in the Chamber, to create a strong private sector. I had no political interests. But after I left Ethiopia, I became a member of Kestedemena and Coalition for Unity and Democracy (Kinijit) political parties in North America. I was the secretary in Kinijit’s international leadership wing.

After Kinijit’s leadership were released from prison, I went back to normal life and started working as a business consultant, and then as a project manager. Of course I traveled to Ethiopia in between to attend my wife’s funeral. But now, I came to Ethiopia to process an investment license.

We are in the process of establishing a pharmaceutical factory in Ethiopia, in cooperation with Ethiopians engaged in the pharmacy business in the US. In general, we are here following PM Abiy Ahmed’s (PhD) call to the diaspora.

What is the kind of Chamber you want to see in Ethiopia?

The Chamber was first established as ‘the Addis Ababa Traders Association,’ during the Emperor’s era. Then it was re-established as Ethiopian Traders Council. It was free and active in advising the government, until Derg completely changed that trend. Derg made memberships mandatory and all businesses had to pay a chamber membership fees after they get their licenses.

Derg also shrunk the number of board members representing the private sector in the council, from eleven to one. At that time, nine of the eleven board members were general managers of state corporations; with only Wubshet Werkalemahu was representing the private sector.

After EPRDF took power, the general managers of state corporations left the chamber. At the time, I was president of the Ethiopian Private Manufacturing Association. So I became vice president of the Chamber to close the vacuum. And when Kebour Gena left, I became president of the chamber, through competition.

The fundamental objective of the Chamber is to advise the government before it introduces polices that affect the private sector and the economy. The second is to provide services for the private sector including trainings, information and arbitration. We were successful on both. Both the Addis and Ethiopian Chambers won various international awards, including the ‘best chamber in Africa’ award.

Nonetheless, the EPRDF was working hard to create divisions amongst, Addis Ababa, regional and sectoral chambers and associations. I worked hard to cut out such divisions and create a stronger chamber. We also managed to get back the chamber’s assets taken by the government. We also managed to access 100,000 sq. m of land for the chamber, on which the Addis-Africa exhibition center is currently being established.

Where is (should be) the exact line between state and private sector roles in the economy?

In principle, the private sector is the backbone of the economy, especially in a free market system. But during the TPLF dominated EPRDF regime; the government tried to replace the private sector by state affiliated endowment companies and state owned enterprises, which are still under party control. They enjoy access to finance, bureaucratic support, information, monopoly and other privileges. This has been stunting the growth of the private sector. I am not sure whether the situation still changed. Party affiliations still control the media, not only businesses and the economy.

Besides those parastatals, there are private businesses parasitic on preferential treatments, provided from the parties. Preferential treatment is still given for businesses, in accessing land, finance, foreign currency, and other privileges. A real private sector, which is self-created and hardworking, is very limited in Ethiopia.

The parties and government affiliated private sectors, still prevail, only changing its face. If you look at past private businesses currently, it is not hard to find a party or state support.

The right private sector should be represented only by the Chamber. It should be free, with no political interests, but defend the interests of the private sector. When we say ‘private sector’, it includes the street vendor and Gulit, to the factory and bank owners. The similarity amongst them is that they have a business license, and a common interest. There are various obstacles that hinder the chamber.

Ethiopia’s future depends on the real private sector. Foreign Direct Investments are also necessary but the domestic private sector is critical in terms of self-sufficiency, sovereignty and retention of repatriation. FDI’s can leave anytime.

Even in the USA, the private sector supports either democrats or republicans. Can a real private sector exist without any affiliation with the ruling party?

If you go to Mercato, everyone works for their own interests. They are not paid by the government but they pay taxes to the government. What the government can do is improve and equalize the playing ground.

Of course the private sector in the US supports parties. The difference is corruption is legal in the US. It is called lobbying and it is not a crime. It is also regulated. But in Ethiopia, parties establish affiliated businesses and keep taking money. The biggest problem appears when the parties themselves engage in the business. This is the biggest problem in Ethiopia. Nobody knows where the money from public enterprises goes to.

Political parties must exit from businesses and the economy. In the US, individuals and businesses giving money to parties, is publicly known, and audited. The tax authority also knows it.

Do you think the existing private sector in Ethiopia can be changed into a real private sector, or should we start over?

A real private sector is not something we create. What the government should do is create conducive environment for a ‘real private sector to emerge.’ It is the demand and supply dynamism that creates a real private sector. There are shoe shiners who have become millionaires. Did the government create them? Of course the government can facilitate support, but without political affiliation.

PM Abiy’s administration rolled out privatization and liberalization initiatives in the past three years. Do you think it is sufficient to re-balance the state dominated economy previously under the EPRDF?

There are positive signs but still some individual businesses are close to the government, instead of organized business communities under the Chamber. I do not think this is good. The government must recognize, capacitate and work with the Chamber. There are improvements regarding regulatory issues and public services. But still there is a chain of corruption in the government system. It is related to power and partisanships, which is a big obstacle that must be reduced. The government has good intentions. There are various issues studied and forwarded by the chamber and sectoral associations. Things will improve if the government reacts on those issues. If it does not start punishing corruption and avoid party affiliation and preferential treatments for selected businesses, the problem will get worse. It is the government that creates a corrupt private sector.

Corruption is also unavoidable when the public servants are paid meager salaries. The government must pay public servants sufficiently. So, corruption is high not because people are bad, or the officials are greedy, but the civil servant takes corruption as supplementary revenue.

The government also drafted a new proclamation to re-establish the Chamber. The draft proposes membership as mandatory, among others. How can a strong chamber be established? Recently, two chamber officials also defected to the US. Why is there always an internal feud inside the chambers structure?

There is a structural problem in the Chamber. It is intentionally created. Making memberships mandatory generates revenue for the chamber. But it hinders the chambers from providing quality service for their members. This was seen during the Derg regime. Immediately after the EPRDF came, it worked hard to weaken all institutions, including the chamber, teachers association, and others. The EPRDF made memberships willingly, to shrink the chamber’s revenue and finally close the chamber due to a lack of fund. But we managed to survive, by improving services and generating revenue from creative works.

Especially, the Addis Ababa Chamber became stronger, at the time, while there were some problems in the Ethiopian Chamber of Commerce. When I was about to leave, there were efforts to change the Chamber’s laws and the government wanted to re-design the Chamber, to fit to the politics.

The Chamber serves wherever there are private businesses, not government structures or political leaderships. But the government shadowed and dominated cities’ chambers, by chambers of regional states. These regional state chambers are under the control of party officials. The Ethiopian chamber also fell under the influence of party members. We tried to avoid those influences and somehow succeeded to maintain a Chamber that represents only the interest of businesses.

The proclamation tried to further divide the chamber across sectors, on top of the regional structure, dissecting the interest of the private sector. Kiosk and garage owners have different interests, but also have common interests. These specific interests should be solved under sectoral associations, and their common interest under the chamber. But what the government did is bundle the sectoral associations and the Chamber together. Businesses with different interests sat on the same table, and failed to agree. So, there is still a structural problem.

I have seen the new draft proclamation too. We are unfortunate the draft did not address the problem still. The chambers and the business community still did not reach a consensus on the draft. The Addis Ababa and Ethiopian chambers are in agreement and sectoral associations have also their won perspectives.

Chambers should work only on general issues that represent the common interests of all businesses and the economy at large, aided by sectoral associations formed separately, representing interests of businesses in specific sectors. Thus, the chamber and sectoral associations should be established separately. I do not know the status of the draft proclamation currently, but if it is ratified, it would take another generation to amend.

So, do you believe the Ethiopian chamber should be the all-encompassing strong umbrella?

Not necessarily. My point is the chamber system should be separate from sectoral associations. Whether at local, cities or a national level, chamber must be strong. But they must align. The issue of sectoral associations is completely different. For instance, leather industries have problems that can be solved both through the chamber, and their association platforms. This is the right way.

For instance, there was the Ethiopian Manufacturing Industries Association. It was challenging the government regarding manufacturer’s interests. Its strong momentum even empowered the chamber. Then the EPRDF practically dismantled it. It even prohibited the association from renting an office. The EPRDF regime never wanted such strong associations and chambers. The reason why the government overlapped chambers and sectoral associations is to deny them on common grounds.

If the draft is ratified, it only maintains the problem. Currently, the government’s system prefers individual businesses, than the organized private sector.

So the draft should be revised and discussed again?

The process of crafting the proclamation has problems from its very inception. The chamber members and business communities have no consensus on the draft. The Ethiopian, Addis Ababa, and regional chambers must sit down and discuss on the issue.

The Ethiopian government is trying to allure investments by the diaspora. If the diaspora invest and save in US banks, or in Ethiopia, which return on investment is attractive? Or do you think the government should design incentive packages for the diaspora?

Businesses in Ethiopia are more profitable than other countries. The reason the US government devised AGOA from the beginning, is because African businesses can be profitable. Even in terms of savings, the return in Ethiopia is higher than Europe or elsewhere. The problem in Ethiopia is not on returns, but convertibility. Repatriation might be difficult. Saving in Ethiopia by itself is profitable, let alone investment. There are so many profitable business sectors in Ethiopia. Many sectors are emerging, and not exploited yet.

The other problem is that the Ethiopian diaspora has lost trust in the government back home. So, the current government must reverse that perception, through transparency, commitment and service efficiency.

Thirdly, the diaspora needs information supply on feasible businesses and projects in Ethiopia. Then the diaspora can form share companies, joint ventures, PLC’s or other investment modalities. If the diaspora know feasible businesses and the laws, then they can invest. Currently, the diaspora is placing their money on the stock market and other businesses abroad. They can divert that money to go back home.

Especially, the profitability in the financial industry in Ethiopia is very lucrative; but the government should facilitate currency convertibility. Plus, most diaspora’s in Europe and the US left Ethiopia three to four decades ago. They are at s retirement age now. So if the health system in Ethiopia is improved, most diaspora’s would prefer to go back to Ethiopia.

The diaspora also wants transparent systems to complain in cases of corruption and bad services. There is corruption in Europe and the US. But it is political corruption not work corruption. Political corruption is trying to twist or influence introduction of policies, proclamations or directives. Work corruption is bribing officials, institutions, and public services. There must be a complaint window for this.

The west has been shifting away from Ethiopia and imposed sanctions. Substantial number of Ethiopians vote, especially in the US. Can Ethiopians and black Africans use their voting power to discard unfavorable officials or parties in the US or influence to reverse such sanctions?

The diplomatic system has a more crucial role in this. To be specific, the US faced unprecedented situation in Ethiopia. A government that refuses foreign pressure emerged in Ethiopia.

The US even used the UNSC to pressurize Ethiopia, meeting twelve times within six months. On top of the strong refusal of the Ethiopian government to surrender, the #nomore movement strengthened the support for Ethiopia, rallying Africans behind Ethiopia. The movement is stronger than election powers. The movement eroded US’s credibility in Africa, and in the world.

Even during calls that Addis Ababa will fall to the hands of insurgents, one million diaspora opted to come back home. I believe Ethiopia will regain its rightful place in the international stage.

Unlike any time before, the diaspora is on the same page now, regarding national issues. Before this, the diaspora’s were highly divided and turned against each other. The division created a negative energy. If the diaspora was united before, the EPRDF could have been long gone. The Diaspora and opposition figures abroad were used to strife, not unity.

Can we say that the US’s pressure is normalizing since the tension with China over the horn escalated?

Their strategy differs. The US wants to ensure its interests through political influence, while China does it through investment and economic empowering. The US’s and China’s struggles will continue, whether Ethiopia is there or not. China, Russia, Turkey, Iran and India, to some degree, are joining the friction now. They have certain interests with or against the US.

The US’s fear is not what China will do in Ethiopia, but the kind of measures Ethiopia takes. For instance, Ethiopia’s normalization with Eritrea and the alliance with Somalia is a threat for the US. When the US told Ethiopia to stop the war, Ethiopia rather turned a deaf ear. Ethiopia filled the renaissance dam, when the US opposed it. These are some of the bold moves against US interests.

These moves have nothing to do with China, but they are decisions emanating from the nature of Ethiopians. So, the confrontation between the US and China continues, while Ethiopia strides to protect and implement its national interests fully.

I do not think Ethiopia will completely shift its diplomatic ties towards China. Imperialism is always imperialism, but it changes its face. The US always wants a government that listens to them. If a government refuses to carry out their interest, they depose that government, including assassinations. In cases such as Libya, Iraq and Syria, the US’s footprints in the countries politics can be seen from afar.

The US put the same type of pressures that worked before, and in Ethiopia’s case, it has failed. But the pressure will continue. Ethiopia has passed a major obstacle. Yet, Ethiopia needs to sharpen its diplomacy more.

At what stage is your investment process currently? What are your future plans?

We are establishing the pharmaceutical factory in Ethiopia, in collaboration with highly professional pharmacists, scientists and business people in the Ethiopian diaspora. Finance, knowledge and vision are required to establish a medicine factory. If you have capital, you can buy knowledge, since it is a commodity.

Our vision is to manufacture medicine and medical equipment’s in Ethiopia and provide for Ethiopians. It is not even about profits. We wanted to improve the medicine supply shortages in Ethiopia.

We have been preparing for the past two years. We came to invest in Ethiopia, amidst the rhetoric that Addis Ababa is about to fall. Our team strongly believes in Ethiopia. Currently, we are processing the investment license.

How much is the investment?

The initial investment will take us between USD 20 million to USD 22 million.

What is your conclusion on the soundness of the Ethiopian economy, especially in post-pandemic and post-conflict endeavors?

My first impression when I came to Ethiopia after almost two decades was that all the negative narratives about Ethiopia and Addis Ababa are wrong. There is still an active economy. Across streets of Addis Ababa, day and night, residents are scrambling to buy from street vendors. This indicates to a huge demand in the economy. This is a living economy.

But it does not mean there are no problems in the economy. There is a forex shortage, industrial inputs shortages, logistics problems and others. Yet, the economy has a big potential, especially if public services are improved, corruption is eliminated and bureaucracy is improved.

Do you think the government should maintain protectionism?

The US and Europe are not afraid of protectionism. Why should Ethiopia be afraid of it? Ethiopia is eager to join the WTO. But Europe is still protecting its agriculture. The US is prohibiting import of wood, aluminum and other items, especially trump did everything to protect local industries. So, Ethiopia must also protect its industries.

After America banned Ethiopia from the AGOA, US companies left the Hawassa industrial park. If it is a local factory, they would not do so.

Before, the US’s private sector had no national interest, instead they go for profits. That is why US industries moved factories to China, in search of a cheap labor. But now, the US government is asking them to come back and create jobs in the US.

The country needs a nationalist private sector. The private sector cannot just seek profits and become a pure capitalist. It must contribute to the social wellbeing and development of the country.

Even FDI’s must be undertaken in a joint venture scheme. If it has a local element, the investment can be sustainable.

How can one balance profit seeking versus national interests? Scholars also say the psychological make-up of Ethiopians is not compatible for capitalism.

Corporate governance, labor unions and social responsibility can balance capitalism. National security should be a concern of the private sector. If there is no security, there is no transport, meaning there is no market. Drought should concern the private sector. These make the private sector become a nationalist by default.

One of the major tasks of the Chamber is to make businesses discharge their social responsibility.

Thus, your conclusion is capitalism can work in Ethiopia.

The old way of capitalism, which is seeking only profits, does not exist anymore. Of course, you are responsible for your shareholders and board members. At the same time, you have to be responsible to the society.

Why you are not investing in the banking sector rather than pharmaceuticals?

The government said it opened the banking sector for the diaspora, but still, there are unsettled problems. It said the diaspora had to invest in foreign currency. This is an obstacle.

But the major reason I joined the pharmaceutical project, is because it is a matter of professionalism. Manufacturing is difficult in Ethiopia. We have a big purpose to bring change in the medical supply shortage in Ethiopia. We will produce capsules and tablets. We will also export, once we address the domestic demand. The company will also establish an R&D wing, which will conduct studies for other firms. Most of the founders are also researchers.

Are you a chemical engineer by profession?

I studied chemistry. I also studied industrial chemistry at Bahir Dar polytechnic. I already have a factory in Ethiopia, which produces plastic and rubber. It is expanding now.

Berhane Mewa is not only the former president of the Ethiopian and Addis Ababa Chamber of Commerce and Sectoral Associations, but is also a lifetime patriot in Ethiopia’s private sector struggles against state domination in the economy. Before he was forced into exile eighteen years ago by the EPRDF regime, he took up the struggle to create an independent chamber system and a real private sector in Ethiopia.

An industrial chemist by profession, Berhane came back to Addis to process a pharmaceutical investment license, to the tune of USD 22 million. He already has a plastic and rubber factory, which he established before his exile to the US.

Despite positive signs in the politics arena, Berhane argues the chambers system is still far from defending the private sector’s interests and contributing to the economy. Ashenafi Endale was granted audience. Excerpts:

The Reporter: What was at the core of your struggle for the Ethiopian private sector?

Birhane Mewa: I was forced to leave Ethiopia eighteen years ago. The government at the time was not happy with struggle in the Chamber, to create a strong private sector. I had no political interests. But after I left Ethiopia, I became a member of Kestedemena and Coalition for Unity and Democracy (Kinijit) political parties in North America. I was the secretary in Kinijit’s international leadership wing.

After Kinijit’s leadership were released from prison, I went back to normal life and started working as a business consultant, and then as a project manager. Of course I traveled to Ethiopia in between to attend my wife’s funeral. But now, I came to Ethiopia to process an investment license.

We are in the process of establishing a pharmaceutical factory in Ethiopia, in cooperation with Ethiopians engaged in the pharmacy business in the US. In general, we are here following PM Abiy Ahmed’s (PhD) call to the diaspora.

What is the kind of Chamber you want to see in Ethiopia?

The Chamber was first established as ‘the Addis Ababa Traders Association,’ during the Emperor’s era. Then it was re-established as Ethiopian Traders Council. It was free and active in advising the government, until Derg completely changed that trend. Derg made memberships mandatory and all businesses had to pay a chamber membership fees after they get their licenses.

Derg also shrunk the number of board members representing the private sector in the council, from eleven to one. At that time, nine of the eleven board members were general managers of state corporations; with only Wubshet Werkalemahu was representing the private sector.

After EPRDF took power, the general managers of state corporations left the chamber. At the time, I was president of the Ethiopian Private Manufacturing Association. So I became vice president of the Chamber to close the vacuum. And when Kebour Gena left, I became president of the chamber, through competition.

The fundamental objective of the Chamber is to advise the government before it introduces polices that affect the private sector and the economy. The second is to provide services for the private sector including trainings, information and arbitration. We were successful on both. Both the Addis and Ethiopian Chambers won various international awards, including the ‘best chamber in Africa’ award.

Nonetheless, the EPRDF was working hard to create divisions amongst, Addis Ababa, regional and sectoral chambers and associations. I worked hard to cut out such divisions and create a stronger chamber. We also managed to get back the chamber’s assets taken by the government. We also managed to access 100,000 sq. m of land for the chamber, on which the Addis-Africa exhibition center is currently being established.

Where is (should be) the exact line between state and private sector roles in the economy?

In principle, the private sector is the backbone of the economy, especially in a free market system. But during the TPLF dominated EPRDF regime; the government tried to replace the private sector by state affiliated endowment companies and state owned enterprises, which are still under party control. They enjoy access to finance, bureaucratic support, information, monopoly and other privileges. This has been stunting the growth of the private sector. I am not sure whether the situation still changed. Party affiliations still control the media, not only businesses and the economy.

Besides those parastatals, there are private businesses parasitic on preferential treatments, provided from the parties. Preferential treatment is still given for businesses, in accessing land, finance, foreign currency, and other privileges. A real private sector, which is self-created and hardworking, is very limited in Ethiopia.

The parties and government affiliated private sectors, still prevail, only changing its face. If you look at past private businesses currently, it is not hard to find a party or state support.

The right private sector should be represented only by the Chamber. It should be free, with no political interests, but defend the interests of the private sector. When we say ‘private sector’, it includes the street vendor and Gulit, to the factory and bank owners. The similarity amongst them is that they have a business license, and a common interest. There are various obstacles that hinder the chamber.

Ethiopia’s future depends on the real private sector. Foreign Direct Investments are also necessary but the domestic private sector is critical in terms of self-sufficiency, sovereignty and retention of repatriation. FDI’s can leave anytime.

Even in the USA, the private sector supports either democrats or republicans. Can a real private sector exist without any affiliation with the ruling party?

If you go to Mercato, everyone works for their own interests. They are not paid by the government but they pay taxes to the government. What the government can do is improve and equalize the playing ground.

Of course the private sector in the US supports parties. The difference is corruption is legal in the US. It is called lobbying and it is not a crime. It is also regulated. But in Ethiopia, parties establish affiliated businesses and keep taking money. The biggest problem appears when the parties themselves engage in the business. This is the biggest problem in Ethiopia. Nobody knows where the money from public enterprises goes to.

Political parties must exit from businesses and the economy. In the US, individuals and businesses giving money to parties, is publicly known, and audited. The tax authority also knows it.

Do you think the existing private sector in Ethiopia can be changed into a real private sector, or should we start over?

A real private sector is not something we create. What the government should do is create conducive environment for a ‘real private sector to emerge.’ It is the demand and supply dynamism that creates a real private sector. There are shoe shiners who have become millionaires. Did the government create them? Of course the government can facilitate support, but without political affiliation.

PM Abiy’s administration rolled out privatization and liberalization initiatives in the past three years. Do you think it is sufficient to re-balance the state dominated economy previously under the EPRDF?

There are positive signs but still some individual businesses are close to the government, instead of organized business communities under the Chamber. I do not think this is good. The government must recognize, capacitate and work with the Chamber. There are improvements regarding regulatory issues and public services. But still there is a chain of corruption in the government system. It is related to power and partisanships, which is a big obstacle that must be reduced. The government has good intentions. There are various issues studied and forwarded by the chamber and sectoral associations. Things will improve if the government reacts on those issues. If it does not start punishing corruption and avoid party affiliation and preferential treatments for selected businesses, the problem will get worse. It is the government that creates a corrupt private sector.

Corruption is also unavoidable when the public servants are paid meager salaries. The government must pay public servants sufficiently. So, corruption is high not because people are bad, or the officials are greedy, but the civil servant takes corruption as supplementary revenue.

The government also drafted a new proclamation to re-establish the Chamber. The draft proposes membership as mandatory, among others. How can a strong chamber be established? Recently, two chamber officials also defected to the US. Why is there always an internal feud inside the chambers structure?

There is a structural problem in the Chamber. It is intentionally created. Making memberships mandatory generates revenue for the chamber. But it hinders the chambers from providing quality service for their members. This was seen during the Derg regime. Immediately after the EPRDF came, it worked hard to weaken all institutions, including the chamber, teachers association, and others. The EPRDF made memberships willingly, to shrink the chamber’s revenue and finally close the chamber due to a lack of fund. But we managed to survive, by improving services and generating revenue from creative works.

Especially, the Addis Ababa Chamber became stronger, at the time, while there were some problems in the Ethiopian Chamber of Commerce. When I was about to leave, there were efforts to change the Chamber’s laws and the government wanted to re-design the Chamber, to fit to the politics.

The Chamber serves wherever there are private businesses, not government structures or political leaderships. But the government shadowed and dominated cities’ chambers, by chambers of regional states. These regional state chambers are under the control of party officials. The Ethiopian chamber also fell under the influence of party members. We tried to avoid those influences and somehow succeeded to maintain a Chamber that represents only the interest of businesses.

The proclamation tried to further divide the chamber across sectors, on top of the regional structure, dissecting the interest of the private sector. Kiosk and garage owners have different interests, but also have common interests. These specific interests should be solved under sectoral associations, and their common interest under the chamber. But what the government did is bundle the sectoral associations and the Chamber together. Businesses with different interests sat on the same table, and failed to agree. So, there is still a structural problem.

I have seen the new draft proclamation too. We are unfortunate the draft did not address the problem still. The chambers and the business community still did not reach a consensus on the draft. The Addis Ababa and Ethiopian chambers are in agreement and sectoral associations have also their won perspectives.

Chambers should work only on general issues that represent the common interests of all businesses and the economy at large, aided by sectoral associations formed separately, representing interests of businesses in specific sectors. Thus, the chamber and sectoral associations should be established separately. I do not know the status of the draft proclamation currently, but if it is ratified, it would take another generation to amend.

So, do you believe the Ethiopian chamber should be the all-encompassing strong umbrella?

Not necessarily. My point is the chamber system should be separate from sectoral associations. Whether at local, cities or a national level, chamber must be strong. But they must align. The issue of sectoral associations is completely different. For instance, leather industries have problems that can be solved both through the chamber, and their association platforms. This is the right way.

For instance, there was the Ethiopian Manufacturing Industries Association. It was challenging the government regarding manufacturer’s interests. Its strong momentum even empowered the chamber. Then the EPRDF practically dismantled it. It even prohibited the association from renting an office. The EPRDF regime never wanted such strong associations and chambers. The reason why the government overlapped chambers and sectoral associations is to deny them on common grounds.

If the draft is ratified, it only maintains the problem. Currently, the government’s system prefers individual businesses, than the organized private sector.

So the draft should be revised and discussed again?

The process of crafting the proclamation has problems from its very inception. The chamber members and business communities have no consensus on the draft. The Ethiopian, Addis Ababa, and regional chambers must sit down and discuss on the issue.

The Ethiopian government is trying to allure investments by the diaspora. If the diaspora invest and save in US banks, or in Ethiopia, which return on investment is attractive? Or do you think the government should design incentive packages for the diaspora?

Businesses in Ethiopia are more profitable than other countries. The reason the US government devised AGOA from the beginning, is because African businesses can be profitable. Even in terms of savings, the return in Ethiopia is higher than Europe or elsewhere. The problem in Ethiopia is not on returns, but convertibility. Repatriation might be difficult. Saving in Ethiopia by itself is profitable, let alone investment. There are so many profitable business sectors in Ethiopia. Many sectors are emerging, and not exploited yet.

The other problem is that the Ethiopian diaspora has lost trust in the government back home. So, the current government must reverse that perception, through transparency, commitment and service efficiency.

Thirdly, the diaspora needs information supply on feasible businesses and projects in Ethiopia. Then the diaspora can form share companies, joint ventures, PLC’s or other investment modalities. If the diaspora know feasible businesses and the laws, then they can invest. Currently, the diaspora is placing their money on the stock market and other businesses abroad. They can divert that money to go back home.

Especially, the profitability in the financial industry in Ethiopia is very lucrative; but the government should facilitate currency convertibility. Plus, most diaspora’s in Europe and the US left Ethiopia three to four decades ago. They are at s retirement age now. So if the health system in Ethiopia is improved, most diaspora’s would prefer to go back to Ethiopia.

The diaspora also wants transparent systems to complain in cases of corruption and bad services. There is corruption in Europe and the US. But it is political corruption not work corruption. Political corruption is trying to twist or influence introduction of policies, proclamations or directives. Work corruption is bribing officials, institutions, and public services. There must be a complaint window for this.

The west has been shifting away from Ethiopia and imposed sanctions. Substantial number of Ethiopians vote, especially in the US. Can Ethiopians and black Africans use their voting power to discard unfavorable officials or parties in the US or influence to reverse such sanctions?

The diplomatic system has a more crucial role in this. To be specific, the US faced unprecedented situation in Ethiopia. A government that refuses foreign pressure emerged in Ethiopia.

The US even used the UNSC to pressurize Ethiopia, meeting twelve times within six months. On top of the strong refusal of the Ethiopian government to surrender, the #nomore movement strengthened the support for Ethiopia, rallying Africans behind Ethiopia. The movement is stronger than election powers. The movement eroded US’s credibility in Africa, and in the world.

Even during calls that Addis Ababa will fall to the hands of insurgents, one million diaspora opted to come back home. I believe Ethiopia will regain its rightful place in the international stage.

Unlike any time before, the diaspora is on the same page now, regarding national issues. Before this, the diaspora’s were highly divided and turned against each other. The division created a negative energy. If the diaspora was united before, the EPRDF could have been long gone. The Diaspora and opposition figures abroad were used to strife, not unity.

Can we say that the US’s pressure is normalizing since the tension with China over the horn escalated?

Their strategy differs. The US wants to ensure its interests through political influence, while China does it through investment and economic empowering. The US’s and China’s struggles will continue, whether Ethiopia is there or not. China, Russia, Turkey, Iran and India, to some degree, are joining the friction now. They have certain interests with or against the US.

The US’s fear is not what China will do in Ethiopia, but the kind of measures Ethiopia takes. For instance, Ethiopia’s normalization with Eritrea and the alliance with Somalia is a threat for the US. When the US told Ethiopia to stop the war, Ethiopia rather turned a deaf ear. Ethiopia filled the renaissance dam, when the US opposed it. These are some of the bold moves against US interests.

These moves have nothing to do with China, but they are decisions emanating from the nature of Ethiopians. So, the confrontation between the US and China continues, while Ethiopia strides to protect and implement its national interests fully.

I do not think Ethiopia will completely shift its diplomatic ties towards China. Imperialism is always imperialism, but it changes its face. The US always wants a government that listens to them. If a government refuses to carry out their interest, they depose that government, including assassinations. In cases such as Libya, Iraq and Syria, the US’s footprints in the countries politics can be seen from afar.

The US put the same type of pressures that worked before, and in Ethiopia’s case, it has failed. But the pressure will continue. Ethiopia has passed a major obstacle. Yet, Ethiopia needs to sharpen its diplomacy more.

At what stage is your investment process currently? What are your future plans?

We are establishing the pharmaceutical factory in Ethiopia, in collaboration with highly professional pharmacists, scientists and business people in the Ethiopian diaspora. Finance, knowledge and vision are required to establish a medicine factory. If you have capital, you can buy knowledge, since it is a commodity.

Our vision is to manufacture medicine and medical equipment’s in Ethiopia and provide for Ethiopians. It is not even about profits. We wanted to improve the medicine supply shortages in Ethiopia.

We have been preparing for the past two years. We came to invest in Ethiopia, amidst the rhetoric that Addis Ababa is about to fall. Our team strongly believes in Ethiopia. Currently, we are processing the investment license.

How much is the investment?

The initial investment will take us between USD 20 million to USD 22 million.

What is your conclusion on the soundness of the Ethiopian economy, especially in post-pandemic and post-conflict endeavors?

My first impression when I came to Ethiopia after almost two decades was that all the negative narratives about Ethiopia and Addis Ababa are wrong. There is still an active economy. Across streets of Addis Ababa, day and night, residents are scrambling to buy from street vendors. This indicates to a huge demand in the economy. This is a living economy.

But it does not mean there are no problems in the economy. There is a forex shortage, industrial inputs shortages, logistics problems and others. Yet, the economy has a big potential, especially if public services are improved, corruption is eliminated and bureaucracy is improved.

Do you think the government should maintain protectionism?

The US and Europe are not afraid of protectionism. Why should Ethiopia be afraid of it? Ethiopia is eager to join the WTO. But Europe is still protecting its agriculture. The US is prohibiting import of wood, aluminum and other items, especially trump did everything to protect local industries. So, Ethiopia must also protect its industries.

After America banned Ethiopia from the AGOA, US companies left the Hawassa industrial park. If it is a local factory, they would not do so.

Before, the US’s private sector had no national interest, instead they go for profits. That is why US industries moved factories to China, in search of a cheap labor. But now, the US government is asking them to come back and create jobs in the US.

The country needs a nationalist private sector. The private sector cannot just seek profits and become a pure capitalist. It must contribute to the social wellbeing and development of the country.

Even FDI’s must be undertaken in a joint venture scheme. If it has a local element, the investment can be sustainable.

How can one balance profit seeking versus national interests? Scholars also say the psychological make-up of Ethiopians is not compatible for capitalism.

Corporate governance, labor unions and social responsibility can balance capitalism. National security should be a concern of the private sector. If there is no security, there is no transport, meaning there is no market. Drought should concern the private sector. These make the private sector become a nationalist by default.

One of the major tasks of the Chamber is to make businesses discharge their social responsibility.

Thus, your conclusion is capitalism can work in Ethiopia.

The old way of capitalism, which is seeking only profits, does not exist anymore. Of course, you are responsible for your shareholders and board members. At the same time, you have to be responsible to the society.

Why you are not investing in the banking sector rather than pharmaceuticals?

The government said it opened the banking sector for the diaspora, but still, there are unsettled problems. It said the diaspora had to invest in foreign currency. This is an obstacle.

But the major reason I joined the pharmaceutical project, is because it is a matter of professionalism. Manufacturing is difficult in Ethiopia. We have a big purpose to bring change in the medical supply shortage in Ethiopia. We will produce capsules and tablets. We will also export, once we address the domestic demand. The company will also establish an R&D wing, which will conduct studies for other firms. Most of the founders are also researchers.

Are you a chemical engineer by profession?

I studied chemistry. I also studied industrial chemistry at Bahir Dar polytechnic. I already have a factory in Ethiopia, which produces plastic and rubber. It is expanding now.

Aklilu Wubet is a veteran in the banking industry. He joined Wegagen Bank on March 2020 as the Vice President of Corporate Service, having served in different capacities in many financial companies, including the Commercial Bank of Ethiopia, in the last 25 years. He was also the deputy CEO of Nile Insurance, Bank of Abyssinia and Lion Bank, and also served as a lecturer at Addis Ababa University.

The Reporter’s Samson Berhane sat down with Aklilu to reflect on his journey at Wegagen and the challenges ahead, as the acting president attempts to bring the bank back to its usual top status it has held for the last two decades. Excerpts:

The Reporter: You have joined Wegagen during a challenging time, when it faces decline in revenue from different sources particularly due to the tense political situation in the country. How are things going since you joined the Bank?

Aklilu Wubet: Banking is always challenging, especially in a world where resources are limited. And leadership is critical during a challenging time. Leading a company during its challenging moments is a great task and makes me happy. Especially, if you have strong team, challenge is a good thing. One thing you should also understand is that Wegagen is still a very strong bank, despite the challenges it has faced.

When I decided to join the Bank, I was confident that I would overcome all the challenges by working with a strong management and team the Bank has. The conflict has impacted all commercial banks. Peace is very important for the industry than any segment of the economy since banks deal with liquid resources. The impacts of the war, in particular, were severe on us because we are among the financial institutions with large number of branches in the areas affected by conflict.

When I joined Wegagen, my priority was to help the Bank withstand the impacts of the war. That requires being prudent and to closely work with regulatory bodies, investors and other stakeholders.

In the last 25 years, Wegagen was among the most profitable financial institutions in Ethiopia. Why was it not solid enough to withstand the shock brought on by the war in Northern Ethiopia?

To begin with, the Bank has been effective in withstanding the impacts of the war. Even though the profit is low, and has declined drastically, it is still profitable. It still has a large customer base and a huge amount of assets. Thanks to the strong base, which the bank is built on; it has been successfully coping with the conflict, even though more than a third of its branches are closed.

The profitability of the Bank in the last two decades has helped it build its asset base, enabling it to withstand the impacts of the war. The rules of the central bank and its strong regulations have had its contribution in enabling us to remain strong in such a challenging period.

The strong expense management that we have applied and the strong marketing system implemented by our management team has also contributed to the success of the Bank. If it was not due to such factors, the history of the Bank would have been ruined. But thanks to our efforts, we have defied the prediction made by some, who have forecasted that we will face a loss due to the war. But we are still in a good shape.

We have devised a strategy and are also undergoing restructuring, and increasing the number of vice presidents we have. We are still among the big players in the industry, hiring elite bankers.

According to industry insiders, the bottom line in the banking industry is profits and shareholders’ return. How did you come to the conclusion that the Bank is in a good shape, while its profit dwindled from one billion birr to 193 million birr?

Business is not only about making profits. Business is about being sustainable and staying competitive in an industry. The conflicts, coupled with macroeconomic challenges, have impacted the banking industry last year and banks would have profited much higher than they did, if there was peace.

Wegagen has declared a positive profit, while much of its branches are closed, and at a period when it was not able to collect loans given to businesses operating in war-affected areas. We even held a provision in case of loan defaults. We did not use a penny from the capital invested by shareholders, despite being in the midst of series of challenges. Overall, our objective was to make Wegagen the bank of all Ethiopians, by making it solid. I believe we have been successful in doing that.

There are critics that say Wegagen is a victim of an undiversified ownership structure which exists in the banking industry. Even though Wegagen is not the only financial institution established based on affiliation or along ethnic lines, some say its recent underperformance is an outcome of lack of diversification in terms of shareholders and customer base. Do you agree?

There are those that say banks are established based on affiliation.

Is that not the reality?

I cannot be sure because I have not had a chance to look through the list of shareholders of each commercial bank. In case of Wegagen, the story is different. Wegagen is wrongly misunderstood. If you see its shareholders, no bank is as Ethiopian as Wegagen. Its shareholders are highly diversified. Many big investors from different ethnic backgrounds have a stake in Wegagen. Name any investor and they are a shareholder of our bank. If you see the board, it is highly diversified. The same is also true if you see the management.

Did you bring that change?

No. I was the vice president 13 years ago at Wegagen and it was the same back then.

Okay, but in case of customer diversification, the reality is opposite to what you have said since the Bank’s profit declined drastically, when a third of its branches closed in one region. So is it not obvious that your bank did not work on diversifying its customer base?

Not only in Tigray. We also have many branches in Gambella and Somali than any other private banks. Of course, we have many customers in Tigray but that does not mean our customers in other areas like Addis Ababa are from the same region. We have over 2.5 million customers, way higher than the adult population eligible for banking services in Tigray. That shows how diversified our customer base is.

How about loan disbursement?

It is the same. More than 75 percent our loan portfolio is in Addis Ababa. However, in terms of deposits, the northern part of Ethiopia is known for being a big source. If you go to Mekelle, many commercial banks have many branches there. Some have more than seven or eight branches and the reason is obvious. This is because there is a good saving culture there. But that does not mean we have to work on the business mix because it is important to manage risks.

Then how did your non-performing loans surge because of the conflict if your borrowers are diversified?

We have provided five billion birr in loans to our customers in Tigray. We don’t know whether it can be paid or not because of the conflict. But that is enough to increase our non-performing loans. The whole industry faced similar problems because of the same reason. We held provisions in case of defaults. If it was not due to the higher provision we held, our profit would have been over one billion birr. That would be added to our income in the future, if we recover our loans. This means that we are investing in our future and if things go smoother and peace prevails, we hope things change drastically.

How is the liquidity position of Wegagen Bank? How capitalized is the bank?

We have a strong capital base. It used to be one of the largest in the industry, though some overtook us recently. Understanding its importance, our shareholders decided to raise the Bank’s paid-up capital to six billion birr before the end of the new deadline set by the central bank. We are also thankful that we don’t have a major shareholder because that gives us room for the management to do its job.

Regarding liquidity, when the central bank raised the reserve requirement from five to 10 percent, many feared that our bank would be among those that cannot meet the new threshold. But we are among the few banks that have fulfilled the requirement first. Our liquidity is now over 17 percent. However, that does not mean we are not facing liquidity shortages, because the whole industry is experiencing similar problems due to the sluggish growth of deposits.

Shareholders want to know when the bank would reach pre-war levels in terms of profitability. When do you think that would happen?

There are two assumptions. The first assumption is that the war would stop, peace would prevail and the government puts its energy towards the economy, a scenario which would benefit the banking industry. If peace prevails, our closed branches would be opened. We will be fully operational and our deposits would surge.

The second assumption is that if the conflict continues, we will operate with our existing resources and branches that are active. New banks are joining the industry. So I am sure we can perform better even with our active branches. We have already devised a strategy to mobilize more resources. We are hopeful that we will return to pre-war levels by the next general assembly.

Founded in September 2017, Eshi Express is a pioneer and one of the successful startups in tech-based delivery businesses, in an emerging business frontier in Ethiopia. Tigabu Haile, co-founder and CEO of Eshi Express sat with Ashenafi Endale of The Reporter, to talk about his business journey.

Excerpts:

The Reporter: What was the business pitch behind Eshi?

Tigabu Haile: If you buy an avocado in Yirgalem, it is around five birr per kilogram. But in Addis Ababa, it is around35 birr. So, we believed that Ethiopia needs an efficient logistics system in the supply and logistics service. Even in Addis, we do not see companies that provide end-to-end payment systems, sourcing and delivery services.

Sending packages in Addis is expensive. There are players like DHL, the Post Office and individual motorcycle owners. But Eshi can provide the service up to 50 percent cheaper than the market.

Basically, Eshi is a logistics company. So, how do you manage your fleet? What are the types of services you provide?

We have three types of services. We have Express service, in which we deliver any package in Addis within 90 minutes. The second type is delivery in half a day. If you order in the morning, we deliver in the afternoon. We charge 90 birr anywhere in Addis. The third category is delivery in 24 hours, which costs 70 birr anywhere in Addis.

Our main operation is in Addis. We use vans, pickups, motors and other types of vehicles. Most of the Ethiopian population is in the regions. We believe the logistics problem in the supply chain can be best addressed if we expand to regional states. Currently, we have been in the piloting phase in Adama and Hawassa, since last year. We will reach other regions in the next two years.

Do you own the whole fleet of vehicles?

We deployed the hybrid model. Around ten motorcycles and a van are owned by Eshi. But owning many vehicles is not feasible, so we stopped purchasing vehicles. We launched a technology six months ago, that enables any individual vehicle owner to register to our platform and deliver packages. Our model is called ‘from foot to fleet’. People can deliver on foot. Especially when we have big events, mass publications and other large deliveries many individuals deliver on foot.

How can these individuals or private vehicle owners access your platform? Is the technology similar to a taxi hailing platform?

It is almost similar but slightly different regarding registration system and insurance policies. Huge packages might be damaged in transit by individual vehicle owners. So, we always require courier insurance or insurance for goods in transit, for any private vehicle who works with Eshi.

How many vehicles that are not owned by Eshi are working with Eshi?

Right now we have more than 25 vans, pickups and different vehicles. There are also around fifteen motorcycles.

How many packages does Eshi deliver per day? How do you evaluate the demand?

The demand of the service is huge. There are thousands of delivery demands daily in Addis, while it is in the hundreds of thousands in the regions. The hard task is to make people use Eshi just once. Then they cannot stop using it.

Right now, Eshi delivers close to 115 packages per day. In the next three years, we plan to deliver thousands of packages daily.

How do you see the competition from other players in the market?

There is no really established company we see as competitors. There are legacy players like the DHL, Ethiopian Postal service, and individuals who have motorcycles. It is difficult for many startups to emerge and become competitors in this business.

Online payment, e-tax, e-commerce, delivery and packaging are involved in the business. How are these all done as one business?

Right now online transactions can happen but there are no e-receipts. It is impossible to make online transactions now. Payment is possible for internet and mobile banking. But if you cannot provide e-receipts, you cannot have a complete e-commerce transaction. There are shops that have an online presence. They just show their packages on their sites.

Does Eshi own warehouses or source from other suppliers?

Eshi collects the packages from companies who have warehouses. Receipt is issued traditionally. So, e-commerce is a work in progress. Eshi is the instrument that provides the logistics service. We do not sell any stuff online. Shopping happens between the customer and e-commerce companies. Once the order is placed and shopping done, either the customer or the e-commerce company orders Eshi to deliver the goods.

The number of e-commerce companies has increased since the COVID-19 pandemic. Has online delivery orders increased too?

E-commerce is taking off in Ethiopia and the government is also nearing to ratify the e-transaction law. All Shops will have an online presence. The outsourcing culture in Ethiopia is immature. Most companies want to do the e-commerce and delivery businesses by themselves. One company, especially startups, cannot handle both at the same time. So, after trying both for a year or two, they fail or specialize only in one.

Currently, big global e-commerce players are coming to Ethiopia. Probably they will launch in the next six months. Eshi has entered agreements with these global players, to do the delivery part. E-commerce companies should focus on what they can do best, because they cannot do it all, with limited time, energy and resources. We want to support their job, from the delivery side.

We will have many package drop-off points soon. If the customer is not at home when the delivery arrives, the drivers can place the packages at those points and the client can take it at anytime. This way, we are planning to drop many deliveries within one kilometer radius. This reduces our cost. That is why we charge 50 percent cheaper than the market. One delivery vehicle can cover many shops, pharmacies and supermarkets within an area.

Does Eshi plan to deliver beyond Ethiopia?

Ethiopia will operationalize the Africa Free Trade Agreement (AfCFTA) soon. Intra-Africa trade will boom in the near future. Eshi plans to become a Pan-African Delivery Company within the next three years.

Lack of automated addressing is a major bottleneck to delivery businesses in Addis. How are you solving it?

Absence of digital address system is a major problem for social services, health, banking, census, elections, apart from delivery business. Address is critical. If you do not have an address, you do not exist. Due to the lengthy communication between our delivery dispatches and clients, and usually missing locations, Eshi is losing resources, time and energy. The customer experience is also bad, because it is annoying when delivery personnel call repeatedly to find the address.

Currently, we have a project in the pipeline, named Eshi Locator, with our technology partner. It gives a code to each house’s. The codes are regenerated, when our partner localize using Google technology. We will imbed Google generated codes into our technology. It will take some time. Right now we are using Google maps, to locate the customer. But this has accuracy problems. Many things should improve to solve the location issue. Eshi Locator will be the solution.

What about using GPS locations or networks, if the customer uses a smart phone?

There are four mechanisms to order on Eshi Express. Customers can order on our website, use an application in Play Store, or call on one of our call centers. For Customers who have mass orders, like event organizers, big corporate or ecommerce companies, we have a separate technology platform, which can receive bulk orders and integrate it to our fleet system.

How much is the profit?

We cannot say it is profitable, even after staying four years in the business. At least we have survived, because we could also fail. The global data shows, less than two of ten startups celebrate their fifth year of establishment. Initiating and running a startup is very difficult. Access to capital is one of the biggest problems.

Was Eshi an angel investment?

Initially, Eshi was founded by me and my partner, who has similar business ideas with me. Eshi started with 1.3 million birr. We saved up the capital. We have also advisors. Last year, the Addis Ababa Angel Investors Network invested in Eshi. Delivery business is a capital, technology and skill intensive venture. You need to hire highly talented people. You have to scale-up fast. We hope the profit will come soon, once our delivery capacity grows.

So the angel investors are shareholders now. How much did they inject in the company?

We have an agreement not to disclose the amount. They injected the capital and immediately became shareholders. We gave them equity share worth their capital injection.

So return on investments has not come to fruition yet?

It will take time, especially with startups like us, in which you have to hire huge staff. No question, we are solving one of the top five challenges in Ethiopia. Lack of efficient logistics in the system is a major reason behind the rising inflation in Ethiopia. Food is being wasted because it cannot reach the market. For instance, there is surplus in the southern part of Ethiopia, while it is extremely scarce in the northern part of the country. That is because we do not have a robust logistics system.

Eshi still needs more cash injections to scale-up its capacity. Delivery is not only about packages, it is about the stories behind the packages. For instance the national blood bank of Ethiopia is one of our customers. We deliver blood every day. We collect blood from donation centers to the national blood bank. People are living because of that. NEBE is also among our customers. We did almost all deliveries in the past national election. We are behind the success of many big achievements. We are becoming instrumental in delivery in Ethiopia.

How many institutional customers do you have?

Currently it is close to 35. For instance, we deliver laboratory results for hospitals, on a daily basis. Embassies, hotels, optical shops, are some of them.

What are the incentives provided by the government for delivery companies, such as allowing duty free import of vehicles?

The government is not providing any support or incentive for delivery companies. There were no private courier service providers in Ethiopia, for long. So, only the Post Office and the DHL were known in this business.

For instance, driving motorcycles has been banned under the State of Emergency since some individuals might use motorcycles for crime. But Eshi had hired many staff, branded the motorcycles and there is no way motorcycles registered under delivery companies can be used for crimes. After all, we are delivering critical packages like blood and other essential services.

Secondly, there is an extreme lack of clarity among government institutions, regarding delivery businesses. Especially, the tax authorities are creating major obstacles to delivery companies. The government has no clear policy on delivery businesses, let alone support incentives. The delivery sector could not grow in Ethiopia, because the government has failed to understand it as a newly emerging sector.

There is the Ethiopian Couriers Association, to which Eshi Express is the board president. The association is trying to change the grim fate of the sector. We have submitted a letter to the government, asking the ban on motorcycles of delivery companies to be lifted. But the response from the government is slow.

Motor cycles cannot move after 6PM. So, we are forced to stop taking orders after 4PM. Otherwise, we cannot deliver last minute orders until the next day. This is especially affecting food delivery courier companies, because there orders are largely during dinner times.

What is the government’s response to the associations’ letter?

It has been three weeks since the association submitted the letter. But the government says it is still being considered. The letter was submitted to the Addis Ababa traffic management office. The city transport bureau has also failed to respond.

A new logistics regulation allows up to 49/51 partnership with foreign logistics companies. Is Eshi considering a joint venture with foreign companies?

JV is allowed for logistics companies engaged in sea, air and land transport. Ours is light package and fast delivery logistics. So JV is not allowed for us.

How much does the absence of e-receipts affect your business? How does Eshi cover the costs, if delivery is defaulted?

Online ordering, online payment, and e-receipts are not active at a national level in Ethiopia. Ethiopians consider online shopping, or e-commerce, as a luxury service reserved only for developed countries. That is acutely wrong. Delivery services extremely benefit developing countries. The purpose of e-commerce is to cut expenses and reduce prices. Companies do not have to open shops everywhere. So, it cuts out rental costs. End user customers also usually visit as many shops, to find a reasonably priced good. With e-commerce, you can find any items at your fingertip. You can order a delivery company, saving your time, energy and money.

The progress slows in Ethiopia, because the digitization pace is slow. But the Parliament is currently working on the e-transaction proclamation. The draft document has been under review for a year now. The Ministry of Science and Technology crafted the document and the Council of Ministers has passed it on to the Parliament. It was said that it would be ratified before the current Ethiopian year enters. But I think it is delayed because the government is busy due to the war.

But even after the proclamation is ratified, is there the technology that interfaces with the payment facilitator, end user, delivery companies, shops, tax authority and other regulators?

Eshi has end-to-end technology that enables the ordering and tracking of goods. The technology also enables us to publish the transactions in excel or PDF file formats.

E-commerce companies also have a similar technology. Ethiopia has all the basic ingredients to kick start e-commerce. We have the laws, graduates, and emerging e-commerce companies. The service quality will improve gradually.

Does Eshi use other payment mechanism like mobile money, tele birr and others, apart from e-commerce companies?

So far, our transaction is largely cash-based. But we are integrating with Fintechs like tele birr, CBE birr and others.

The starting price for delivery of a kilogram of package is 20 birr. It increases by12 birr per additional kilometer and three birr per additional kilogram.

How do you evaluate the competition with other emerging delivery companies?

It is difficult to say there is stiff competition. There are delivery companies that participate in bids with us. A lot of institutions like banks float bids for their bulk delivery contracts. There are only close to six active players.

The DHL, the Ethiopian Postal Service and Balderasu are active in Addis, while there are other startups emerging in regional delivery services. The DHL has no interest in the domestic delivery business in Ethiopia, leaving the market in Addis for us. Even in Europe, DHL works with local companies, specializing on the international market rather.

Close to 100,000 packages are delivered in Addis Ababa every day. Eshi, which delivers 115 packages per day, is comparatively better performing, than other players. Yet, the share of delivery companies is completely insignificant, relative to the demand.

All of close to six delivery companies in Ethiopia, including DHL and the Post office, are delivering less than 6,000 packages per day. The market is untapped.

The delivery demand in regional states is much higher than Addis. We have assessed the demand and mapped delivery services in 100 cities in Ethiopia. There is close to 200,000 package delivery demands in these cities.

Who is filling this demand now?

This demand is bridged traditionally. The Postal Service has some market share, but mostly; people send packages via cross-country buses. But this method of delivery has two major problems. First, it has no insurance if the package is damaged and second, the bus owners charge as they wish. Cross-country busses have no standard pricing for delivering packages.

Eshi is 100percent insured. When a client orders Eshi to deliver a package, the customer declares the value of the package. If it is damaged, Eshi refunds 100percent of the value stated.

Do you work with all insurance companies?

The local insurance industry is underdeveloped, thus, local insurance companies usually do not accommodate our insurance packages. So, we cover the insurance fund by ourselves. Eshi has been incurring cost due tothis. But now, we are communicating with insurance companies. All other delivery companies operating in Ethiopia do not have such insurance coverage, except for Eshi.

Is Eshi using its own vehicles for the piloting phase in Adama and Hawassa?

We deploy our own vehicles to deliver high risk packages. But usually, we use private vehicles which have insurance coverage.

Which sectors have high demand for delivery services, is it exporters, households, or wholesalers? And Ethiopia is ranked low on the logistics index. How can delivery companies improve this?

Our business is last mile delivery. We deliver from shops to end users, or consumers. Last mile delivery is the most difficult business in a given economy. One is due to a lack of precise addressing technology. It is also the most expensive logistics system. So the demand could be consumer goods, medication, and invitation or gift cards.

Last mile delivery also creates job opportunities. Millions of youth can deliver goods door to door. So, it is the best logistics sector for job creation. If we could make the delivery price cheaper, it can activate the economy, and affect millions of lives positively. It is a phenomenal sector.

By how much rate is Eshi growing from a startup to a large enterprise?

Our package delivery business size is growing at close to 10percentper month. It is not an impressive growth but we are making good progress.

We plan to grow by 15 percent on a monthly basis. Comparatively, Eshi is growing faster, because most of the delivery companies operating in regional states are highly affected by the conflict in Ethiopia.

How much does Eshi deliver in Adma and Hawassa?

Our delivery in these towns is just a couple of packages per day, for now.

But Blood Bank, the NEBE, Goh Betoch, Nile Insurance, Ramada hotel, hello market, and Ethswitch are some of our major institutional clients across the country. We do cash-up-on-delivery for our customers. We also provide full insurance coverage, which no delivery company does in Ethiopia. We also have warehouse for e-commerce companies.

Does Eshi directly buy goods and deliver?

Usually customers order e-commerce companies to supply the good. Then the e-commerce company orders us to deliver the packages to the customer who has placed the order. Hence,Eshi does not purchase the packages. The package is purchased by the e-commerce company. Since the customer cannot pay online, we collect the payments and give it to the companies, usually on a weekly basis.

If we directly engage in buying and delivering, it will take a huge capital. The e-commerce companies have the packages and the digital presence. I believe e-commerce should be much cheaper. Some e-commerce service providers give up to 15 percent discount, but the business is just taking up in Ethiopia. It is at very early stage.

Eshi does not want to play the role of e-commerce companies. If there are 40 e-commerce companies in Ethiopia, we do not want to become their competitors. Rather, we want to deliver their packages. But if there are packages not found in e-commerce warehouses and if Eshi can find those goods, we can supply it directly to the customer. Under this circumstance, we receive orders of packages worth less than 2,000 birr.

English Version News

Suzuki vehicle prices explode, shaking up the automobile industry

Yoseph Asfaw, a mid-level manager of one of the branches of Bunna Bank, was excited when he learnt he was eligible to take out a two million birr interest-free loan, courtesy of the performance his branch achieved last fiscal year. He did not hesitate to take the opportunity. After a few weeks of deliberation about what to buy with the money, he decided to purchase a vehicle. His choice was the 2022 model of the Suzuki Dzire, the most sought-after automobile in the car market. He was asked to pay 1.5 million birr.

“Are you sure I will recoup the money within a short period of time,” Yoseph asked the car retailer.

“Trust me, give it one month, and the price will surpass two million birr,” the retailer replied.

The trader was right. The price of Dzire 2022 has shot up to 2.2 million now, a development that helped Yoseph net a profit of 700,000 br in just a month. “You cannot get this money by saving or opening a trade store. And not surprising at all, given the volatility of the market,” said the banker, adding, “I don’t want to sell it as this is a treasure whose value appreciates every second, and the most profitable venture without adding value.”

It is not unusual to see the price of vehicles spike in Ethiopia. Cars are believed to be a big treasure, the same way apartments or houses are. A car costing less than USD 2,000 in neighbouring countries, the Toyota Vitz, costs nine times more in Ethiopia. The high tax on old cars, which could reach 500 percent, was used to justify the hike. Though the same is true for old cars now, the story is different in the case of new vehicles, a category given to automobiles produced within three years of imports.

Three years ago, the government introduced a new tax law to encourage the imports of new cars while discouraging the old ones. Such a reform was meant to make new cars cheaper, though it was a target that never materialized. A case in point is the Dzire 2022, an automobile imported through a duty-free scheme and flooded the market, along with other brands of Suzuki, including Espresso and Swift.

Toyota is still the dominant player in the vehicle market, though traders say Suzuki is now commanding the lion’s share, probably as high as 60 percent in the last two years. It is partly because the cost of new Toyota vehicles is higher than in the past, as older ones were less costly. For the same reason, Suzuki is the most preferred brand for importers now because the lower the cost, the lower the amount of foreign exchange importers needs to get.

“We get the forex from the parallel market with a premium, as banks barely cover the cost of the imported cars. Suzuki has become a preferred option for many importers as it is less costly and brings a better return with a higher profit margin than Toyota, which is expensive and requires a tiresome process to get the forex needed to import it from countries like Dubai,” said an importer.

Last year saw a spike in demand for new vehicles, largely due to the huge amount of finance availed by banks to borrowers eligible to take a loan to buy automobile. During the third quarter of the last fiscal year, 330 million birr was imported, twice what was imported in the preceding quarter. It is also 20 percent higher than what was imported during the same period in 2020/21. The increase is the outcome of the growing demand in the market, according to retailers. But that comes with a cost.

“The demand is way higher than the supply. We are receiving orders more than what is available in our stock,” said Ezra Hailemariam, marketing manager of Tamrin, one of the major market players in the car market and known for importing Suzuki brands.

The change in the global market has also contributed to the spike in price, according to Ezra.

“Over 90 percent of Suzuki cars are imported from India, which is not producing much now due to a shortage of inputs because of the tension between China and Taiwan, which is the major supplier of semiconductors for the factory in India,” Ezra added.

According to a senior company official, Maruti Suzuki said “it could not produce 51,000 units in the April-June quarter owing to the ongoing chip shortage situation.”

India’s largest carmaker, which sold 1.4 million vehicles this year, underscored that the semiconductor shortage is a challenge in planning its production activities.

“The electronics component shortages are still limiting our production volumes. In this quarter (Q1), the company could not produce 51,000 vehicles,” said Maruti Suzuki India (MSI) CFO Ajay Seth in an interview with a local media in India.

The scope of the fighting between government forces and militants of the Tigray People’s Liberation Front (TPLF) along the border of the Tigray region has widened with both sides acknowledging that the conflict has spread to more areas in addition to the area where it initially erupted. The fighting between government and TPLF forces resumed on August 24 after a five-month lull. Though combat had been heaviest around the southeastern border of Tigray, TPLF militants have pushed into the neighboring Amhara and Afar regions, sending residents fleeing. Clashes on the ground and air raids over Tigray have poured cold water on the efforts underway since June to find a peaceful solution to the 21-month war that began following an attack on federal army camps based in the region. The warring sides have accused each other of firing first and shattering the months-long relative calm that has been prevailing in the northern part of Ethiopia following the federal government’s announcement in March of a truce to allow humanitarian aid to be delivered to Tigray.

The federal government has also blamed what it calls the west and Ethiopia’s “historical enemies” for using the TPLF as a Trojan horse to advance their evil design on the nation. Ever since the administration of Prime Minister Abiy Ahmed (PhD) commenced a military operation in Tigray in November 2020 in response to attacks on the Northern Command of the Ethiopian National Defence Forces (ENDF) the country has been subjected to unprecedented pressure at the hands of Western governments, the U.N., mainstream media, think-tanks and rights groups. The U.S. particularly has sided with the TPLF, slapping a slew of sanctions on Ethiopia and withdrawing its benefits under the United States’ tariff-free African Growth and Opportunity Act (AGOA) while it gave the TPLF a slap on the wrist. Furthermore, the U.S. and its allies at the U.N. Security Council have tried over a dozen times to formally admonish Ethiopia but failed thanks to the vote of China, Russia and India. Apart from exerting undue diplomatic pressure, the West has also been waging an information warfare against Ethiopia through a disinformation campaign undertaken by the mainstream media, think tanks and so-called rights advocacy organizations. Its end-game, as some analysts plausibly argue, is to engineer a regime change or if that does not work to coerce Prime Minister Abiy’s administration into accepting to the demands of the TPLF.

It’s not only over the Tigray conflict that the West is pressurizing Ethiopia though. The filling and operation of the Grand Ethiopian Renaissance Dam (GERD) has been a bone of contention between Ethiopia, whose highlands supply more than 85 percent of the water that flows into the Nile River, and the lower riparian states of Sudan and Egypt. In 2020 the U.S. tried to force Ethiopia into signing a binding agreement on the filling period. The Ethiopian government declined to sign-off a U.S.-drafted agreement regulating the filling time of the dam, which Egypt insisted should be completed over 12-21 years, saying it has the right to fill the dam at its own pace and would do so in no more than seven years. Although Sudan initially supported the building of the dam, since then it has taken Egypt’s side on the ground that filling the dam without the agreement of downstream countries imperiled its national security. Again the Security Court, at the behest of Egypt and Sudan, convened on several occasions to consider a resolution calling on Ethiopia to cease filling the GERD’s reservoir and pushing for a binding agreement between the three sides on the operation of the dam but failed to adopt it.

The West’s motives driving its pressure campaign on Ethiopia, its long-standing regional ally, are purely self-centered and zero-sum. It is wary of Ethiopia’s pursuit of an independent foreign policy, which may very well frustrate the accomplishment of its strategic goal in the Middle East and Africa. First, Ethiopia’s apparent reluctance to do toe the West’s line has been perceived to make it harder to protect the interests of Egypt—the cornerstone of its Middle East policy. Second, its attempt to thread a needle as animosities between the West and China ramp up is not appreciated by the West, which feels threatened by Beijing’s growing clout on the global stage. Given Ethiopia has been a beacon of black Africans’ struggle for freedom and could inspire continental resistance to neo-colonialism, the West might deem that forcing Ethiopia to forsake China is instrumental in containing the influence of its top geopolitical rival in Africa.

The West better realize that the essentially undemocratic and unipolar global world order that had prevailed over the last several decades following the end of the Cold War is ebbing. As a country that has never been colonized and is home to a fiercely patriotic people, Ethiopia will never cave in to the West’s demands. Needless to say this requires on the part of the federal government to develop and implement a robust diplomatic policy aimed at nullifying the threat posed by its historical enemies through a variety of tried and tested mechanisms. Some of the steps it can take in this regard include forging a compromise with its adversaries where possible and failing that to foil their destabilizing policies and measures. Ethiopia has the capacity to find a resolution to the political crisis engulfing it. Any nation or organization which has its interest at heart should stop meddling in its domestic affairs and instead support it in seeking enduring solutions.

The abrupt eruption of fighting between government forces and militants of the Tigray People’s Liberation Front (TPLF) along the border of the Tigray region this Wednesday has left Ethiopians apprehensive and disheartened. The resumption of active hostilities shatters the months-long relative calm that has been prevailing in the northern part of Ethiopia following the federal government’s announcement in March of a truce to allow humanitarian aid to be delivered to Tigray. Predictably the warring sides have blamed each other of provoking the hostilities. The Ethiopian government has accused the TPLF of striking first, saying it had “destroyed the truce”. In a statement it issued on the same day the Government Communications Service said, “Disregarding the numerous peace options presented by the Ethiopian government, the armed wing of the terror group TPLF, pushing with its recent provocations, today committed an attack” around southern Tigray. The TPLF though has said government forces and their allies had launched a “large scale” offensive towards southern Tigray early Wednesday after a months-long lull in fighting, adding its forces were defending their positions in the southern front.

The lead up to the current round of conflict portended the escalation of the now 21-month civil war. War drums were repeatedly being beaten with all the sides in the conflict issuing statements pointing to the outbreak of an impending war. The TPLF said on several occasions that the peaceful path to resolve the situation was not working and that it was considering “other options.” The government of Ethiopia on its part accused the TPLF of engaging in extensive military mobilization in preparation to restart the war and called on the international community to condemn the terrorist-designated organization and dissuade it from its ill-fated move. The government of neighboring Eritrea, whose troops have been operating in Tigray since the war began, also pointed the finger at TPLF for plotting to launch attacks on the country to reclaim lost territory.

Since November 2020, the bloody war has exacted a heavy humanitarian toll and ravaged the nation’s economy. In addition to the tens of thousands killed and injured, millions more were displaced, psychologically traumatized and left needing emergency food assistance. Social and economic infrastructure has been totally or partially damaged, including schools, universities, health institutions, and other facilities in the Tigray, Amhara and Afar regions. The economy has taken and continues to take a battering. Its growth, which stood at around 10 percent annually before the conflict, has contracted by half; scores of industries have been damaged while some investors have suspended or totally quit operations, resulting in a surge in unemployment; the undoubtedly huge sums of foreign exchange the war has eaten up has contributed to its dearth at levels rarely seen before and to driving inflation higher. Although it’s difficult to quantify the true cost of the war, the destruction is sure to have cost Ethiopia billions of dollars.

The renewed conflict comes as efforts underway since June following the establishment of a government-appointed committee tasked with starting peace talks hit a snag. The government’s announcement in late July that it was ready to hold talks with the TPLF “anytime, anywhere” and the TPLF’s expression of its willingness to ending the war through peaceful means raised the prospects of peace. The apparent readiness of the two parties to engage in peace talks was hailed as an important initiative locally and by the international community. However, both sides have laid down preconditions that they say must be met prior to the commencement of talks—the declaration of a formal cessation of hostilities in the case of the Ethiopian government and the resumption of basic services to Tigray by the TPLF. They also disagree on who should lead negotiations, with the government demanding that the African Union oversee the process but the rebels insisting that outgoing Kenyan President Uhuru Kenyatta should chair it. While we are not apportioning blame here it’s disappointing to say the least that war has broken out again due to the inability of political leaders to do whatever is necessary to prevent it.

War is generally regarded as something that cannot guarantee a win-win solution to political conflicts. This said some contend that war is not necessarily the worst option as long as it fulfills certain considerations that lend it moral acceptance. Critics, however, argue that all war is essentially indefensible regardless of how justifiable the cause behind it may be. They also attempts to justify a particular type of war as being just serve to rationalize violence instead of constraining it. Philosophical differences aside, many agree war is a failure of imagination. Ethiopians have had enough of the internecine conflicts that they have endured for centuries. The blame squarely lies with political leaders and elites bereft of the desire to settle differences through constructive dialogues. In any kind of armed conflicts it is innocent civilians who bear the brunt, not their architects. That’s why the Ethiopian government and the TPLF need to immediately stop fighting and thrash out a durable peace accord at the negotiating table. Let’s not go back to square one!

Hopes of a negotiated political settlement to the war that erupted in northern Ethiopia in November 2020 following the attack on the Northern Command of the Ethiopian National Defence Forces based in the Tigray region by the forces of the Tigray People’s Liberation Front (TPLF) have been high ever since the Ethiopian government established in June a committee tasked with holding peace talks. The government’s announcement in late July that it was ready to hold peace talks with the TPLF “anytime, anywhere” and the TPLF’s expression of its willingness to ending the war through peaceful means, albeit the fulfillment of certain preconditions, led many to believe that peace was finally within Ethiopians’ grasp. The apparent readiness of the two parties to engage in peace talks was hailed as an important initiative in bringing a conflict that has exacted a terrible toll on the country and its people to an end.

Efforts to start the peace talks seem to have hit a snag lately though. First, this week the Main Peace Committee—the committee the Ethiopian government established to explore the possibility of talks with the TPLF—declared while announcing it had drawn a “peace proposal” that the resumption of basic services to the war-stricken region was contingent up on the creation of an enabling environment once a formal ceasefire is concluded. Meanwhile, the TPLF immediately dismissed the committee’s statement as “obfuscation”, blaming the Ethiopian government for openly defying “their oft-repeated promise to take measures aimed at creating conducive environment for peaceful negotiations”. It further accused it of “taking provocative actions against [Tigrayan] forces” and warned that “it will be solely responsible for the eruption of a second round of war that will lead to the total destruction of the country”.

The condition laid down by the Main Peace Committee in a statement it issued, namely that the declaration of a formal cessation of hostilities is a prerequisite to resume the provision to Tigray of, among others, electricity and telephone services belies the Ethiopian government’s recent unambiguous assertion that it was committed to hold negotiations without any precondition and as such represents a step backwards. While the committee has legitimate security concerns regarding the safety of federal government employees that need to be deployed to Tigray in order to restart the basic services, it should also be mindful of the fact that the continued disruption of the services only serves to exacerbate the plight of ordinary Tigrayans, not the leadership of the TPLF. It needs to demonstrate in deeds its avowed commitment to alleviate the suffering of citizens in the conflict-affected parts of the Tigray, Afar, and Amhara regional states. On its part the TPLF must stop beating the drums of war in the realization that throwing around belligerent statements is counterproductive to peace-building endeavors and just prolongs the ordeals of the very people it claims to stand for.

A host of hurdles stand in the way of the proposed talks. TPLF forces still occupy parts of the Amhara and Afar regions they invaded. Similarly, the Amhara region has ruled out negotiating over the fate of areas its forces wrested from Tigray soon after the war erupted, arguing they were forcefully incorporated under the Tigray region in 1991. The continued presence of the Eritrean troops in some of the territories they occupied in Tigray poses a challenge that complicates negotiations. Moreover, disagreements over who leads the mediation process—the African Union (AU) as the Ethiopian government insists or Kenyan President Uhuru Kenyatta, the preferred choice of the TPLF—can torpedo the entire process.

Trying to bring about a complete end to the fighting in northern Ethiopia followed by a political settlement which leads to a lasting peace is an arduous task to say the least. Nevertheless, no price is too high to pay for peace. Now is the time for the warring parties to show a genuine determination and commitment to peace. The deep-seated antagonism between the two sides understandably makes it difficult to strike a peace deal. Engaging in dialogue and making the necessary compromise requires more courage than continuing the war. Embarking on a peace process should not be about total victory for one party and a defeat for the other. It is about achieving an outcome in which all the protagonists and more importantly the people of Ethiopia emerge victorious. For the sake of Ethiopia and its people the Ethiopian government and TPLF must recommit themselves to peace.

The rule of law is a mechanism, process, institution, practice, or norm which strives to ensure that no one is above the law, everyone is treated equally under the law and held accountable to the same laws, there are clear and fair processes for enforcing laws and human rights are guaranteed for all. Ethiopia has the sad distinction of being a nation with a checkered track record when it comes to upholding the rule of law. Among the different metrics by which a country’s overall rule of law performance may be measured, Ethiopia has particularly fared badly in assuring order and security as well as respect for fundamental rights. The act of turning back some people travelling from the Amhara region en route to the capital Addis Ababa constitutes a clear example of the latter.

For over three weeks now security forces in the Oromia region have been preventing citizens travelling by cross-country bus from the North and South Wollo zones of the Amhara region to the capital through Oromia from getting to their destination if they do not carry a residence ID of Addis Ababa. Federal government officials claim operatives deployed by the terrorist Tigray People’s Liberation Front (TPLF) were recently arrested while trying to infiltrate Addis Ababa using residence IDs and administrative seals it had looted when it occupied some parts of the Amhara region, adding the measure is part of a security operation aimed at thwarting the evil designs of the terrorist group. True, a government’s primary responsibility is to protect the safety and security of citizens. Nevertheless, care must be taken to ensure that the manner in which any operation to ensure law and order does not trample basic liberties enshrined in the constitution.

One such right is freedom of movement. Article 32 of the constitution stipulates that any Ethiopian or foreign national lawfully in Ethiopia has, within the national territory, the right to liberty of movement and freedom to choose his residence, as well as the freedom to leave the country at any time he wishes to. The Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights, and the African Charter on Human and Peoples’ Rights — the international instruments Ethiopia has ratified and in conformance with which the fundamental rights and freedoms specified in the constitution must be interpreted — also afford protection to this right. Absent a duly declared state of emergency, there can be no justification for the indefensible prevention of Ethiopian citizens from enjoying their freedom of movement on the ground that they pose a potential security threat.

Aside from flouting the rights to liberty of movement, the action of the Oromia security forces has other troubling ramifications. First, it creates a perception of discrimination and ostracization in the individuals victimized by the travel restriction. Moreover, the fact that they are unable to travel to their intended destination entails damaging economic and social consequences for them. This is liable to sow the seeds of resentment and down the line to political conflict. Second, it encroaches on the federal government’s constitutionally granted power to regulate major roads linking two or more regional states. Such intrusion into the federal government’s exclusive preserve sets a bad precedent for other regions. In short it spells danger for the integrity of the constitutional order and the rule of law.

Freedom of movement is a fundamental right all levels of government must respect. Any perceived security threat its exercise may pose should be handled in a manner that does not result in the violation of the right and subjects innocent citizens to inconvenience. There can be no sugarcoating the fact that the act of preventing certain classes of people from travelling to wherever they want is an unequivocal infringement of not only freedom of movement, but also the right to equality. As such it is incumbent on the federal, Oromia and Amhara regional governments need to hold consultations on ensuring that everyone travelling from the Amhara region via Anwar Soussa has been the Managing Director (MD) of Safaricom Ethiopia since July 2021. He was the Managing Director of Vodacom DRC and the Chairperson of Vodacash (M-PESA), a position he has held since 2017 until joining Safaricom Ethioia. During his tenure, Vodacom DRC made major strides in operational performance, crossing the USD half a million in service revenue mark for the first time in 2020. The Reporter’s Samson Berhane sat down with him to understand his new beginnings in Ethiopia.

The Reporter: First, tell us about your journey in the telecom sector.

Anwar: I have been in the telecom sector since 2006. But I started in the technology sector since 1996 in Montreal, Canada. I joined Safaricom Ethiopia, the project, when I was in Vodacom in Congo. I was a CEO there. My experience perfectly suited for this type of operation.

Safaricom has been preparing for more than a year to launch service. Why did it take so long? What were the problems that you have faced while doing so?

I don’t call it a problem. I call it a challenge. Initially, when we come into the market, the idea was to launch using ethio telecom infrastructure. That agreement took longer than expected to finalize. As a result, we choose to build our own towers. We did not want to wait. To build towers, you have to find land, import materials like steel and find cement as well as hire sub-contractors. That means you need more time than the initial plan. That is the real reason why it took longer than expected to launch service. Now, we signed a deal with ethio telecom and things are gonna move faster.

Tell us about the detail of the deal. I heard you are going to pay in both local currency and USD to lease the infrastructure of ethio telecom.

I am going to keep the deal private because that is between us and ethio telecom. But there is a dollar component. The reason is, as well all know, there is a forex shortage in the market and to prepare a site for us, they are required to import materials from abroad. We recognize that. We agreed to make the component in dollar for them to make the site ready for us.

So, the negotiation is now over?

Ethio telecom has been a very good partner. The CEO, Frehiwot, has been gracious in terms of engagement with us. Everything is proceeding well. The delay was due to operational issues. How many juniors were available? How fast we can get steel? How fast we can upgrade the site? All of these are operational issues.

When you launch service in Dire Dawa, you have used your own infrastructure.

That’s correct. When we launch service, initially, we are using our own infrastructure. But as we move forward, we will be sharing infrastructure of ethio telecom and build our own in the meantime.

Is there any change in equity contribution of shareholders in Safaricom Ethiopia? Some say, there is. Is that true?

No, there is change.

As Safaricom is listed in the stock market, a change is expected when something new happens. Have you seen any change recently after you launched service?

I don’t think it is possible for you to attribute any change to a certain element. The reality is the World’s stock market has been very volatile over the past six months. There is a war and a global recession coming in. Certain things happening are way beyond the control of a certain company or what we do here in the ground.

What should Ethiopians expect from Safaricom? Many hope Safaricom will come up with a better quality of service with a lower fare.

The pricing move from ethio telecom last year was very strong. They brought down massively. I am not sure if it will be possible to bring down price from what is in the market now. However, in terms of quality, my expectation is that the quality overall in the market will improve. And the reason I say that is because we are setting up a new network and ethio telecom, or the competition, will not stay still, I expect they will bring the best game in the table. Quality of service, both in technological level and in customers’ service, will be improved massively. How customers’ complaints are going to be taken care of? I think these are areas where you see a major improvement.

The price that you are charging is almost similar with ethio telecom. Do you think you can be competitive in the market, while charging the same price, as people expect a lower fare from you?

The price for voice is one of the most aggressive in Africa. And I don’t think there is a room to drop voice prices. So do I think we can be competitive? Yes, I do. The most important thing we want to flag is that we don’t want a price war with ethio telecom. If we start a price war, that means they will automatically react. There is no way there is going to sit by and see us dominate the market because our price is cheaper. I think that will a detrimental impact on the market, not only on us. I don’t think you see a change in terms of price.

The infrastructure deal took more time than you anticipated. The global market is not helping too. Did you make any change in your financial targets, considering the challenges you have faced since you secured the license to operate in Ethiopia? For instance, do you still think it is possible to achieve breakeven within five years, as outlined in your initial plan?

Yes, I do think so. I think the biggest challenge is the global inflation. The price of fuel is increasing. The same is true for cement and steel. All these things are going to be more expensive. I think this element of the business will be very challenging. Yet the plan is still to breakeven within four or five years. But we have to pay attention to the cost.

You are investing heavily in infrastructure development. And can you tell us how far you have gone thus far?

We will continue to invest with the money that we allotted when we started the business. Some places are easier. Addis is easier than the regions. This is because there are a lot of buildings to put on the antennas. So it is simple to deploy in Addis than other areas.

If it is easy, why did you first launch service in Dire Dawa?

That is a small town. It requires fewer sites. It is easy to optimize. The network rollout was very fast.

How long it would take to launch service in Addis?

Six weeks. We believe there is a massive opportunity in the capital, in every element. I have been working in 12 countries. I never had been in a country where a single company dominates everything. The market will be split.

Is there any place that you want to capitalize on, especially an area where ethio telecom has a little presence?

That is a nature of businesses. You grow until there is no place to grow.

How long it would take for you to be independent from ethio telecom?

I don’t think we want to be independent. The reason I say that is because old days where everyone builds its own infrastructure are gone. You have to share infrastructure. That makes more sense because that does not have any impact on your competitiveness. Why do you build a fiber where there is a fiber? That will be a waste of money.

There has been a social media outcry against your recruitment process. What is your reflection on this?

To be honest, I think it was not only on the recruitment process but also on the language we are using. It was also about distributors and how we are allocating distributors across regions. It was also about the religious mix of what we have in the office and what we have employed everywhere. There were a bunch of requests the activists raised with us. So, we did not respond immediately because we were supposed to understand whether these are true or not and see ourselves if there are problems. To be honest, I don’t think the problems are as acute as people are saying. What they did say is to be careful. For instance, if we go to Oromia, we have to use Afan Oromo. We have to pay attention to laws. We have put signs saying coming soon. It was us not being sensitive. We met guys behind the campaign. They were very moderate. None of them want to hurt Safaricom. They want what we do to be fair. They did not make extraordinary demands. That’s why we are comfortable to engage with them. I understand we have to be sensitive to the history, the culture and the current politics without going too far. It has to merit-based. Everybody coming to the company should be the best of the best. We have received a lot of advises from the government. All of them said “you must choose the best but be careful.”

Do you think it is possible for Safaricom to apply meritocracy in light of the current situation in Ethiopia?

I think there has to be a meritocracy. The qualification of the candidates has to be there. There should be no compromise. However, as we choose candidates, the priority must be given to the people within the region. It is not appropriate to start shifting from one region to another. Not because of other issues but language considerations are critical. People have to speak the language of the area where they are working.

Now let us talk about mobile money. I know you are in the process of launching M-Pesa here. Do you see any progress from regulatory body in introducing a legal framework to govern the sector?

The legal element is going fine. I think it is gonna be available very soon. Our shareholders are engaging with the government. From operational perspective, things are going well. We have put the app in place. We have put configurations in place. Everything is in a good shape. In technically perspective, we will be ready to launch service in the next three months.

The approval process of the bill may take another three months. Do you think that will have an impact on your plan?

No. We got so much to do. We have 25 cities to cover. We have massive network to build.

Do you think you can repeat the success of M-Pesa in Kenya here in Ethiopia?

Absolutely. Kenya is particularly amazing story. Wherever we launched M-Pesa, we were successful and we are leading the market. So we don’t see any way it is not going to be successful in Ethiopia.

Ethio telecom is already advancing in the mobile banking market. Are you expecting fierce competition when you launch M-Pesa?

I do expect very strong competition. They have done a great job in recruiting customers and strengthening the network.

From what I have observed, ethio telecom is taking an advantage of its link with public offices to facilitate payments in the public sector? Have you get any promise from government officials whether you will get the same opportunity when you launch M-Pesa?

We are talking them to now. There is no one said we are not going to get this opportunity. Yes, they had a one year head start. They have done great job in services they have launched. Yet I believe we can catch up.

How is the war in North Ethiopia affecting you?

We have a huge amount of work to do. I think it will slow us down in certain areas but we will continue doing our work in other areas. But everyone is sad to see the resumption of conflicts.

Are things in place to launch service in North Ethiopia, particularly in Tigray, if the war ends?

We will be ready as soon as communications are stored and get the blessings to go back in. We want to reach all over Ethiopia.

My last question is on repatriation. Many international companies usually complain about the difficulty of repatriating profit in Ethiopia. Some say it takes over a decade. How is your plan in that regard?

Repatriation is not a big issue. The issue is finding dollar to buy equipment after the investment window closes. After our money runs out, we need to get forex to buy equipment. Regarding repatriation, we knew the issues when we came. If it takes 10 years, it takes 10 years. We gonna be here longer than that. Of course, we want to repatriate but we are here for long term.

Oromia without fear that they will be turned back before getting to their journey’s end. Given upholding the fundamental rights laid out in the constitution is vital to assuring the very survival of Ethiopia as a cohesive polity, overstepping the constitution in the name of containing elements bent on wreaking havoc cannot and should not be tolerated. That is why it’s imperative to put an immediate stop to the blatantly unconstitutional violation of freedom of movement and see to it that it’s not repeated ever again. Goitom Tsegaye is deputy chairperson of Arena Tigray, an opposition party popular in Tigray. He has been voicing his concern over the war in Tigray since it broke out almost one and half years ago. The second time the conflict started, Goitom found it heartbreaking. He thinks that in carrying out the eagerly anticipated negotiations between the two warring groups, the African Union did not fully fulfill its obligations to the organization. The Reporter’s Selamawit Mengesha sat down with the opposition leader to get more of his perspective on the recent resumption of hostilities.

The Reporter: Let’s start with the war that erupted anew this week. Before the battle resurfaced, there were talks of a peace agreement. Is there still hope for negotiations?

Goitom: It is heartbreaking that the dispute has resurfaced this week. Since it began, there is a potential that it will continue, although much will be lost if it does.

War’s casualties are well known, and hopefully we have a government that cares enough about its people to put an end to it. They should have learned from their previous mistakes and avoided them, in my opinion.

Both parties demanded that mediators be appointed. What was the reason the two parties couldn’t agree on who should undertake the mediation?

Essentially, I believe there is one thing we should all remember: everyone must be fair and impartial while looking at things.

In a war, not everyone carries a weapon, but what we’re seeing in Tigray is people lacking necessities such as banks, water, transportation, telephones, and electricity.

We were taught to believe that these services were destroyed during the war and that the government was unable to repair them, but it is now clear that this was not the case all along.

According to the Tigray regional government’s discussions with the EU, the federal government is leveraging these necessities when it could simply provide them to the people; it’s using them as a weapon of sorts.

War has laws, but the warring side is separate from the people. The people of Tigray are also Ethiopian citizens; hence the administration is harming its own people. Personally, I believe it is not the best way to proceed.

I believe that the federal government should have learned from its failures from the beginning. I don’t think initiating a full-fledged war with the TPLF was the best course of action. Instead of attacking, it should have been defending.

It was not a prudent move, especially with other powers involved. What I mean is that the items the Tigray regional government is requesting from the federal government are essentials for the people.

Both parties bear responsibilities for doing the right thing by the people. I’m not sure why it’s framed as a difficult choice. It is for the people of Ethiopia; hence the government should have established a consensus for its people by now.

To return to the subject of the negotiations, the government already pledged to begin them without any preconditions. However, the offer was to negotiate solely with the TPLF, without including Amhara, Afar, or even Eritrea. Do you think these groups should have been taken into account during the negotiations?

I believe the government’s strategy was flawed from the start. We’ve observed unlawful acts such as Tigray transferring land to Amhara with the assistance of other forces, so what has the Amhara area lost from Tigray?

We’ve heard on several times, particularly in the case of Welkait, that the region is attempting to reclaim their land. Is it even their land is the question?

The structure of the regions, in my opinion, is fairly apparent.

I say this because there was a region called Show that later became part of the Amhara and Oromo region, a place called Bege Medhir became part of the Tigray and Amhara region, and if Welo became part of Afar, Tigray, and Amhara, then there is really nothing new that happened between Tigray and Amhara, unless there is a belief that if I am living here, there is no one else there, which in that case makes comprehension difficult.

Ethiopia and its land are inextricably linked, so stating the land was mine and I want it back makes no sense to me. Questioning the demarcation system is understandable, just as arguing “using language as a way of defining regions is wrong,” but claiming land in the same country is not.

Ethiopia’s land is reserved for Ethiopians. Sitting and talking with Tigray and the federal government makes sense because the government is clearly offending Tigrayans and requires mediation.

Because Eritrea was involved in the attack, having Eritrea participate in the talks makes more sense than having the Amhara region participate in the talks.

Understanding this, I believe, is critical.

As a representative of Tigray, Eritrea and the federal government should have discussed Bademe and other issues. However, in actuality, the federal administration has not been representing the people and territory of Tigray.

Negotiations have been attempted by international groups. We’ve seen people like Obasanjo come to the country and make attempts, and many people were optimistic that the talks would take place. Do you believe the conflict resurfaced because those bodies failed to carry out their duty properly? Or do you believe they carried out their responsibilities correctly?

I believe we should have taken the initiative.

Both the federal government and the Tigray regional government should have demonstrated interest in the negotiations from the start; only then could other groups assist in getting the talks started.

According to my knowledge, they did not fulfill their obligations, particularly the African Union. Aside from creating articles and laws, I do not feel the AU has a consistent and capable ability due to one of their articles; Article 2H, titled humanitarian integration.

Although the article has been ratified, the Union lacks the resources to put it into action. According to that provision, the Union has the right but not the resources to intervene in cases of humanitarian rights breaches.

For example, the AU did nothing to address the Tigray situation; there were words but no action. For these reasons, I didn’t have high hopes for the AU. It still has a long way to go, in my opinion.

Other international organizations with influence and power have their own military intervention regulations as well. The west has previously attempted to exert pressure on the administration, but international organizations such as the EU and countries such as the US are preoccupied with other matters such as the Ukraine-Russia war.

They have the ability, but their focus has been diverted away from Africa. They, too, lack consistency, as evidenced by their actions in Ukraine. As a result, I don’t believe they’ve done their part

They have the power and capability, and yet here we are.

Who do you believe is to blame for the re-ignition of the war? Could the difference in negotiation beliefs be the cause, or do you believe the absence of the Welkait and Humera concerns is a contributing factor?

As I stated at the outset, if we refer to the Oromia area, we need to know which cities and counties comprise that region. That is, the problems of Tigray and Welkait should not be a problem. I cannot argue that the requirement should not be met because the federal government granted the land without Tigray’s approval and is now requesting that Tigray accept it.

People who lived there before are now refugees. People are unable to use their own funds because banks are closed. All of these difficulties should be considered as prerequisites.

It’s not difficult to grasp, even for the federal government. People are hungry, so shouldn’t that be addressed first as a prerequisite before any negotiations begin?

I cannot accept the idea that there are no prerequisites. Negotiations would be conducted with a boot on the people of Tigray if those demands were not met.

I don’t have any information on who restarted the war. To be certain, I would have to live there. I am like everyone else, listening to all sides’ arguments.

What will the people of Tigray face if the fighting continues? You’re already aware of the issue. What do you think about the present humanitarian crisis?

I don’t believe that anything positive can come from conflict.

War will take innocent lives, destroy property, and deplete the economy, and what could be worse than that? Tigrayans are at a significant disadvantage.

They are under attack from their own government, former foes such as Eretria, and adjacent territories such as the Amhara region. It’s painful to see how something that should have been resolved amicably has turned into an injustice against the people of Tigray, which is also an injustice against the rest of the country.

Hopefully, people will realize this soon. I’m sure there will come a day when our empathy will be tested. Ethiopia will pay a high price as a result of the conflict. In the war, there are no winners, but all are losers.

Do you believe the constitution can deescalate and resolve the conflict? What are your thoughts on the matter? Is it possible to resolve the disagreement based on the current constitution and the new statute established by the federation under which regions could decide directly to be regions?

There aren’t enough people organized to hold a referendum. Furthermore, Tigray has no representatives in the House of Federations. How will Tigray make its case? Who will be Tigray’s representative?

At this stage, it would be child’s play; the most serious offenses have already been committed. Atrocities in violation of the constitution have occurred. International agencies have branded it ethnic cleansing, and some have even called it genocide.

So this is pretty strange. On paper, the constitution is just and fair, but its implementers are not.

Is it truly conceivable to exclude Eritrea from the war in the future if Eritrea’s government refuses to withdraw its troops? Will their departure solve the problem in any way?

I believe we must consider how they got to be involved in the war.

Did the federal government request that its troops participate? Was the Parliament able to represent them? I mean, there are multiple options, right? Who delegated authority?

These points must be addressed first.

It would be pointless to question something that has no legal foundation. Was a formal agreement reached between the Ethiopian government and President Esaias? If so, what were the terms, and where are the documents?

Is it even conceivable for an Ethiopian Prime Minister to pull out such a deal out of the blue? He cannot. To begin with, it must go past Parliament.

As a result, the question of whether Eritrea should withdraw has become extremely convoluted, with numerous loose ends.

We have observed that since the beginnings of the war, a large number of Tigray-born residents living in various cities throughout the country have faced discrimination and harassment everywhere they go. They couldn’t return to Tigray due to the war, and during this time, everybody from Tigray or of Tigrayan ethnicity was in a plight. That had been subsiding to a degree in recent months, but now that tensions have resurfaced, what does this mean for Tigrayans living around the country?

This is a clear problem. Kibrom authored a book and was detained because of his ethnicity; he traveled to Afar and got into a lot of problems; I’m using him as an example, but there are many others like him.

What is the UN peacekeeping mission doing now? To be honest, I don’t think it was even this horrible during Derg’s reign.

Innocent people are openly mistreated based on their race, with some even losing their lives as a result. Tigray is not being represented by the government, and this must change. It must reflect on its previous activities.

We are on the verge of a major crisis, which must be examined thoroughly.

It is unacceptable to feel unsafe and to face severe discrimination in your own country because of your heritage. There was a glimmer of hope. As you stated, the current circumstance may pass as it always does, but it may leave wounds and scars that will not go as readily.

Do you believe Ethiopia will be restored to its former glory in the future? What is the hope in a situation when many already believe Tigray is no longer a part of Ethiopia or that it would have a referendum? Do you believe Ethiopia is one of them?

It depends on the next steps we take.

As far as I am aware, Tigray is still a part of Ethiopia. Even Eritrea would have been a part of Ethiopia if not for the Adwa war and its consequences.

Right now, looking at the government’s actions against the people of Tigray, such as refusing to reopen banks, the internet, and transportation, it appears that there is a power that does not want Tigray to be a part of Ethiopia, which is incorrect. The China Foundation for Poverty Alleviation (CFPA) is a non-governmental, non-profit organization that was established in 1989 as one of China’s largest charity organizations dedicated to poverty alleviation.

The foundation, among other things, provides healthcare and nutritious food to vulnerable populations, with a focus on mothers and children; supports education programs; provides scholarships; builds infrastructure; and distributes stationery to help communities thrive.

The Ethiopian Civil Society Organizations Authority registered the Foundation in 2019, and it has been actively working since 2015 by collaborating with local and international non-governmental organizations on various projects such as school feeding, clean water, women’s economic empowerment, and refugee support. Sisay Sahlu of The Reporter spoke with Emma XiaocenXuang, the country director of the foundation’s Ethiopian office, about some of the project activities in Ethiopia.

The Reporter: It is unusual to see the Chinese government involved in such areas, particularly in poverty alleviation. What are the goals of establishing this foundation?

Emma XiaocenXuang: This is the basis of a total charity organization founded in 1989.

The Chinese government’s fund for social enterprises provides 99 percent of its funding. In China, the foundation works in the fields of health, education, rural development, and livelihood. We are now investing in similar international engagement areas.

In Ethiopia, our official implementation agreement began in 2015 in collaboration with Ethiopia’s First Lady, Roman Tesfaye, specifically to begin school feeding in Addis, in over 43 schools.

We were collaborating with a local organization called E-network at the time, but they changed the name to Hailmariam and Roman Foundation. We were officially registered as a civil society organization in Ethiopia in 2019 after working with this foundation for about four years.

We started the registration process in 2017, but the government changed, so we put it on hold. We restarted in July of 2019.

What is the foundation’s international experience?

In 2005, we began working as an emergency aid provider, and in 2015, we officially began in Myanmar and Nepal as our first steps in Asian countries, with Ethiopia becoming our first African destination.

We began our project in Ethiopia and Sudan in 2015. However, we chose Ethiopia as the location of our regional office.

The Chinese government has extensive experience in poverty alleviation. What is the secret to their success? Are there any suggestions?

One component of the foundation is poverty alleviation. The People’s Republic of China has a very strong system, and China is very good at mobilizing all of the parties involved, such as companies, non-governmental organizations, the public, the government, schools, and research institutions, to engage in poverty alleviation.

All of those parties are working within this system, and there are numerous methods and areas for collaboration in the education and nutrition sectors. We incorporated the school feeding system into children’s basic rights and the education system, not just the Zero Hunger plan.

We also give quotas to poor areas, particularly at China’s two best universities, Tsinghua and Peking. According to policy, we provide a quota for the poor. This is because if you want to end poverty, you have to invest in education.

Similarly, we must construct a very strong housing system to ensure that all citizens receive the full package so that they won’t have to stress over things like, “Oh, I’m sick right now, so I’m going to the hospital and spending a lot of money, since the government is covering most of the cost.”

Both the government and non-governmental organizations offer benefits like insurance.

For instance, I was born in China. Both the government and my company provided insurance for me. However, I believe that identifying the poor is the most difficult task because doing so is the first step in providing aid to the underprivileged.

In this regard, the Chinese government created a system that can store all of a person’s information on a card that serves as an ID card. You can discover a person’s complete information using this card.

A person also has a complex set of criteria and evaluation standards.

If you have an income of up to 2300 Chinese RMB, that means you are getting out of poverty, and the next step is to observe and follow-up for a few years until you make steady progress out of poverty.

If they are in an accident or become ill, they will be forced to return to poverty and their names will be added to the poverty list again. So this is a national system implemented with strong leadership and complex evaluation criteria to identify, follow-up, and evaluate the entire system.

How can we balance the demands of the expanding population with the available resources? Is there any advice, particularly with regard to the food system?

You know, it could be the geographical location, but if you look at China, we have a very large land area. Even the climate in the north and south is vastly different. People in the south, for example, prefer rice as their main food, whereas people in the north prefer wheat. The majority of Ethiopians consume Enjara.

I believe it is about food diversity and nature’s gift. I couldn’t find any seafood in Ethiopia. Everything is imported. So, in comparison to geography and location, it is the gift of nature that I want to emphasize.

The second point to mention is that China has made substantial investments in its agricultural sector. We simply devised a number of methods for producing more food while working with limited resources.

For example, there is a well-known Chinese man who developed a type of improved seed by changing the genetics and received an international award. In the same situation, this new seed can produce more than ten times the yield of the original local seed.

Thus, we put more time, effort, technology, and other resources into our endeavors. The northwest region of China is characterized by extremely dry land devoid of any water. In order to effectively use rainwater for farm work during the dry season, we constructed a water sailor.

The other thing we do is drip irrigation, and we make good use of all the available resources. There are just too many aspects to it for me to list them all now.

When the land is distributed in pieces, the government in some places tries to use the entire land and bring all of the necessary equipment to do the farming all at once, saving money, time, and human resources while producing more products.

What can Ethiopia learn from Chinese agricultural practices in order to make better use of its resources?

The most important industry is agriculture. Ethiopia is also dependent on it.

I noticed teff is a main product, and it appears that farmers are having difficulty making a living from it. I recently traveled to the Amhara region, Somalia, Oromia, and other parts of the country. I noticed how friendly and hardworking the people are.

Their farming equipment, however, only uses cows; such farming was abandoned in China more than 30 years ago.

When I see this practice, I think to myself, “Is it possible for Ethiopia to develop without using adequate technological instruments?” And I believe it is preferable to bring more technology and do it more efficiently.

I want to be modest. I sometimes admire how they learn this from their ancestors and local wisdom, even knowing the direction of the wind and when it might rain.

However, because I am not an expert in the field, it is difficult for me to speak out without conducting an assessment and a survey. In China, there are numerous agricultural universities with a large number of professors and college students working in the sector.

They are professionals who are learning from both abroad and at home, and they provide an excellent representation of Chinese planting culture. Farmers are constantly being introduced to new cultures, technologies, and skills. We also organize farmers into groups to teach them how to plant properly in order to produce more products.

Another experience is that you are aware that individual farmers are extremely vulnerable and lack the clout and knowledge to bargain with the market and the upper chain. They only sell the original fruit for a very low price. They put in a lot of effort and got very little in return.

There is something in China known as a “cooperative” or “organization.”

It is a unified organization made up of all farmers, and the farmers choose just one or two people to lead their organization and send representatives to determine the prices of all products.

They bargain to determine the market price, and if they work together and make a profit, they split it.

The majority of Chinese practical and recognized engagement in Africa mostly takes the form of investments, loans, and credit provision. Humanitarian commitment to Africa is little known, particularly in comparison to the Western world. What prompted the Chinese government to get involved in such foundations and poverty-relief efforts?

The first point I’d like to make is that the China Foundation is a non-governmental, non-profit organization, and we take great care when discussing political issues. We are always neutral and on the side of the vulnerable.

My personal observation is that, initially, international aid is provided all over the world, particularly after World War II. So there is a tradition, and 40 years ago, China suffered greatly and received significant assistance from Western and other developed nations.

They invested heavily and brought some goods to China. You know, for example, for people like me, I have received an English education from the UNDP.

China was the first recipient of aid, and now that the country has matured and can no longer ignore these countries, it is time for China to accept responsibility.

So, doing business is one thing, and taking on social responsibility is quite another. There is no conflict, and we must proceed.

You earn money and support your people there, but you must invest locally to support the local community, which is natural. Here, we share common sense and concepts with both the government and the general public.

But, you know, because we only recently developed our economy to support the Chinese public, the concept of social responsibility is something that comes from a good heart. China has done a lot to eradicate extreme poverty, but poverty still exists, and people are becoming wealthy in a very short period of time. We sometimes solve the poverty problem, but we still need to work on the nutrition problem.

We can’t solve it quickly because it’s a long-term process.

However, the Chinese government is always concerned with the need to do something for the locals, and they encourage businesses to assist the locals and take more responsibility. It also encourages companies to invest abroad while also taking on social responsibility.

The funds for this foundation did not come from the government; rather, they came from the South-South cooperation initiative.

How much money have you put into Ethiopia?

We used USD two million this year, but depending on the project, the fund may grow if the situation allows us to move forward.

What have you done in Ethiopia thus far?

We want to do a lot of things, but some of our plans have to be put on hold, not only because of the COVID-19 outbreak, but also because of the conflict in Ethiopia.

We are now investing in education, especially in school feeding, panda bag, wash, and solar light projects. But school feeding is the first thing we’ve focused on because we believe the children deserve it and that it’s a basic human right.

In addition, we intend to construct the school kitchen and provide cooking supplies for the students.

We have received funding for it, but we have yet to make a decision.

The city of Addis Ababa has adopted the full standard of cooking that we developed based on Chinese experience combined with the first lady’s local experience. Initially, it was 40 birr for two meals (breakfast and lunch) per child.

We recently visited the Oromia region and plan to visit the Amhara region; we simply want to share our limited resources’ experience, models, and any other relevant information.

Our main goal is to create a model and share it with the government and other non-governmental organizations (NGOs) that want to get involved and contribute to the local community.

Do you believe this school meal can be sustained?

Of course, we will conduct an evaluation, and once we see how the school feeding program is working, we will not suspend it for at least three years. We need to ensure that once the program is running smoothly, we can extend it for more than three years.

But our aim and goal is to keep this school feeding program running from kindergarten to grade eight, and that is how we will proceed.

However, if the government says, “We have money and we don’t need you anymore,” we suspend it and shift our focus to other sectors.

Addis Ababa has started the program, but if you look at mothers’ cooking, you will notice that they only use three stones in the pot to cook the sauce, which consumes a lot of energy and is bad for their health.

They must get up early and are paid very little. As a result, we are attempting to provide more integrated and comprehensive support, such as building and maintaining the kitchen as well as providing cooking materials.

We commissioned some Chinese construction firms to create the design, which we have already implemented in one school.

It is a pilot project, and if it is useful and effective, we will undoubtedly expand it. However, the first step is to obtain electricity in order to provide modern cooking materials, which can also save energy.

How are schools chosen for this project?

We communicate and collaborate with the government, and they know which areas and schools require the most attention. We will go there on the ground and compare one school to another based on their recommendations.

Are you planning anything else?

Yes, there is a Panda Bag project that aims to provide kids with school bags that contain more than 100 school supply items, such as lunch boxes, water bottles, hygiene items such as soap and toothpaste, and all the necessary materials for the students.

Every year, we conduct an assessment by asking children, teachers, parents, and members of the local community what kinds of items they most need and which items they do not want.

We need to make more adjustments if any item is more needed. We make every effort to avoid any political or religious content in this gift. The donation was made in collaboration with the Ministry of Education.

We will send the entire quota to the Afar and Amhara regions this year because they are affected by the conflict.

What exactly is the challenge?

Of course, there are numerous challenges. Each project has its own set of implementation challenges. We have to buy the panda bags from local factories when we need to provide them to the children. We talked, argued, and bargained about the price and shipment from China with them during this process, because we couldn’t find the item in the local market.

Actually, we made it easier for you to invest in it in the local market, but you couldn’t find the right quality.

And something that worries me is that when we try to collect some items from the local market, I notice that they are coming from India or Turkey, and I believe that if we need to invest in the local market, we should get the materials from here, because buying imported materials is very expensive.

Of course, not this year. We paid nearly one million birr per year for the damage in the previous three years because we did not receive the tax-free letter. However, we received this letter this year. This entry was published on August 1, 2010. Yohannes Benti (PhD) began his career as a chemistry teacher for a high school in West Oromia in 1992, the same year he got his degree in chemistry from Addis Ababa University. He has been the president of the Ethiopian Teachers Association since 2009, having been elected three times. He is the lobbying group’s longest-serving leader, having ruled over it for more than a fifth of its existence.

He immediately became an active member of the Association. Before getting his master’s degree in Educational Planning and Management from Addis Ababa University in 2005, he earned a second bachelor’s degree in law from a private university. While running the Association, he got a certificate in Advocacy and Citizen Management from the Coady International Institute in Canada and a PhD in Educational Policy and Leadership from Addis Ababa University in 2019.

The Association has 700,000 members at all levels. For the past six months, university instructors have been protesting about inadequate remuneration and other difficulties, but the government appears to have mainly ignored them. They have even vowed to strike in the coming month if the administration does not present a satisfactory solution.

Yohannes is the president of the association that represents each university’s associations, as well as a member of the Board of Education International, a 32-million international union organization. The Reporter’s Samuel Bogale sat down with him to discuss the concerns of lecturers and the education sector.

The Reporter: What compelled university academics to issue an ultimatum as they request the government to make an adjustment on salary and work grade? Can you tell us what they asked, and why they didn’t get a response?

Yohannes Benti (PhD): The query from university lecturers is on Job Evaluation Grading (JEG) and its implementation, which the government decided to impose for all civil servants in 2019.

There were approximately 65 salary scales among civil servants when the government agreed to reduce these scales in 2010, but it was later reduced to 22 scales in 2019 and applied immediately.

Since 2016, the Association has represented both general education and university teachers in the study to implement the JED on civil servants.

We detected a problem with the scales and wages of general education instructors when it was brought to us for comments in 2019, soon before implementation. We later requested an adjustment to increase their grades from the Ministry of Education, which then met with the Civil Service Commission.

During the process, the requirement for university instructors was disregarded.

What substantial modifications were made to the pay scales for general education teachers but not for university lecturers?

The highest work grade for teachers, regardless of experience, was only six. When the JEG was established, we asked the government to help them improve their grades, and they eventually made it to grade nine.

These are the salary adjustments that university lecturers did not have the opportunity to make. High school teachers with a bachelor’s degree currently earn more than 12,500 birr per month, or 1,400 birr more than university lecturers.

The higher the grade point average, the better the salary.

What has been the reaction of university instructors since then?

They have been complaining during our series of meetings since its deployment in 2019, and have even requested back pay.

Last year, the associations at each university formally developed a list of approximately 14 questions. Our association was then part of a committee that made the requests to the then-Ministry of Science and Higher Education, which was later dissolved before responding to our queries.

The petitions have since been passed on to the Ministry of Education, which is now the regulator of Ethiopia’s universities.

They had complained not just about the JEG and salary scales, but also about overtime pay, consultancy fees, housing allowances, and tax-related difficulties.

Housing has long been a demand of the teachers, and the government has always claimed that it is taking action. So far, how has it been?

Since the implementation of a directive in 2016, teachers have been given preference for housing at their places of employment, either by building on a plot of land or by purchasing condominium homes in cities like Addis Ababa.

University academics are excluded from this due to claims that they were receiving housing benefits, and their universities may be in a better financial position to have their own buildings and house the teachers. However, some city administrations, such as Addis Ababa, have already started offering housing subsidies to their general education instructors.

For teachers, a home is not just a place to live but also a place to work. Regions like Oromia have long been doing outstanding work in providing teachers with houses by giving them land to build on. In Addis Ababa, some 5,000 instructors were also given condominiums.

For the obvious reason that many other people of the community also urgently require homes, the housing question does not receive a prompt response. However, up until the end of the previous year, roughly 110,000 teachers received land on which to construct homes, along with a few condominiums.

The government was recently warned by university teachers to respond to their inquiries or face a strike by the end of September. What is the position of your association on that?

Discussions can help solve issues. Such actions have a significant negative influence, thus we don’t advise them. We should keep asking and be open to the strong arguments we hear while at work.

The administration views raising the scale and compensation as a difficult task, given the current economic climate. The Association also understands the situation.

The homogeneity of pay across various universities is one of several other issues that are currently being addressed. Our Association is attempting to mediate disputes between the government and educators. Both the things that the nation can change and the things that should be put on hold should be done.

Threatening with prerequisites is useless. We condemn that.

The government has been supportive of general education teachers at primary, secondary, and vocational schools, including acts such as granting land for them to build their homes.

We will continue to request the same perks for university instructors.

The government recently announced that universities will have autonomy, beginning with Addis Ababa University this academic year and expanding to ten universities in two years. What are your thoughts on this development?

The proclamation for university’s autonomy has been in existence for a long time. It is unclear how it would be used at all universities at this point, but they are starting with Addis Ababa University and expanding to other campuses. That is something that universities would like as well.

Several teachers work at schools, primarily private ones, despite not having completed the teachers’ training program, also known as the Post Graduate Diploma in Teaching (PGDT). Who are the association’s members and who are the teachers?

Any educator working at any institution is eligible to join. A teacher is someone who possesses the necessary credentials, such as the necessary training, education, and capacity. The worldwide standard is also being followed in our nation.

Not everyone who attended school for a certain field of study is qualified to teach. Additionally, it is essential to possess the required pedagogical skills. Teaching abilities and expertise should be present.

You can’t teach English because you studied it. This isn’t just a problem in private schools.

Do government schools hire teachers who have not received PGDT training?

Sure. When schools experience a teacher shortage, one option is to train applied science graduates in PGDT and hire them in schools.

Initially, the goal was for these graduates to be trained and deployed, but due to an acute shortage of instructors, they were authorized to begin teaching immediately.

This is an issue in both private and public schools. After much deliberation, the government decided to require instructors in both private and public schools to complete the PGDT program.

The requirement that teachers need to fulfill after completing PGDT training has actually been a part of government legislation for quite some time. This training is offered by a small number of universities to all teachers, domestic and foreign. Private schools will be required to pay for their own staff training.

Teachers in universities and in general education are unemployed in northern Ethiopia’s conflict zones. How is your organization supporting these educators?

University professors from the universities in the Tigray Regional State would be able to register online and request reassignment, according to a statement from the Ministry of Education.

Even while we know that some lecturers accepted the risk and continued to work, there may still be individuals in the area who are unable or reluctant to do so.

We have a list of the teachers who were displaced in relation to general education teachers. We are giving a small sum to a few of them as a sign of solidarity.

Our request for assistance in reassigning 43 instructors was made to the Ministry of Education and even the Ministry of Finance, but we heard back that neither the Ministry of Education nor the Ministry of Finance oversee any elementary or high schools.

We will continue to support them while putting pressure on the government to transfer them to any school and location around the nation.

How is the Association, a significant player in the education industry, reacting to the most recent changes and new rules?

The education reform research, which began in 2016, was the catalyst for reform. The public then debated it in 2019 prior to its implementation. University education was expanded to four years, and a national high school graduation exam was administered in grade twelve. In Ethiopia’s justice sector, Tamiru Wondmagegnehu is a colossal figure. He has been working for fifty years and has witnessed four regimes in addition to becoming a walking library. He has a master’s degree in legal studies and international law.

He started out as a judge under the imperial regime and eventually worked his way up to become the vice president of the Supreme Court, Special Court, and High Court under the socialist Derg regime. However, he was detained along with three other Supreme Court justices when the EPRDF seized power.

Following his release from prison, he founded the Tameru Wondm Agegnehu Law Office, which rose to prominence in the nation. Ashenafi Endale Of The Reporter sat with Tamiru to talk about Ethiopia’s legal system.

The Reporter: What similarities and differences can you find between the legal system, the institutional makeup of the judiciary, and its operations under the imperial rule, the socialist Derg, the EPRDF, and the current administration?

Tamiru Wondmagegnehu: The Ethiopian legal system can be divided into four periods: before 1900, between 1900 and 1941, between 1941 and 1974, and since 1974.

Since Derg, we have been ruled by autocrats akin to the French Revolution. Under these regimes, the courts have been altering their characteristics and duties.

Ethiopia’s triumph at Adwa falls under the first category because it is known around the world and has received attention. Four diplomatic consulates started operating right away in Ethiopia. Ethiopia became the only nation of color to be acknowledged under international law.

Following the 1648 Westphalia treaty, Europe came to the conclusion that there was no other nation state than Europe and decided to establish a European nation state. Therefore, only European nation-states were subject to international law before 1900.

According to international law, Muslims and Blacks in particular were not eligible. That is why Europe began its colonization of the western hemisphere, including its policy of rushing to conquer Africa.

No international law imposed sanctions on Europe. They consequently run ferociously to satisfy their need for resources and markets. Ethiopia was the only African nation at the time to have created its own state boundary.

In circulars he sent to England, Germany, France, and Italy, Emperor Menelik described and mapped Ethiopia’s active boundaries. Ethiopia did not draw its border with other African governments, but rather with European invaders. At the period, as to this day, Ethiopia was surrounded by European colonial governments.

What modifications were made to the foundational rules of justice by the regimes?

Fetha Negest, a 500-year-old written code of justice in Ethiopia, was created under Zerayacob’s rule. However, the zufan chilot (the king’s court) was the only institution at the top until 1900. All the officials of the kings judge matters according to their ranks.

Foreigners began to enter Ethiopia after 1900, and Fetha Negest was no longer useful for adjusting to modern rules. The first cabinet was founded in 1900 by emperor Menelik.

The emperor was under pressure from the foreigners, particularly the French ambassador, to create a consular court. Foreign judges were therefore permitted to sit as judges alongside Ethiopian justices after 1900. The consulate court operated from 1900 until 1941.

Emperor Haileselasie I disliked the consulate court system when he returned from exile in 1941. Thus, in 1941, he issued the Negarit Gazette’s founding proclamation for the first time. The second Negarit, which announced the development of a modern legal system in Ethiopia, was released that same year.

Haileselasie gave the order for English professionals to set up police and court institutions in Ethiopia, which were established at the supreme, upper, Awraja, and woreda levels.

The head of the Supreme Court was a foreigner. Experts received their education elsewhere. However, all of the judges on the supreme and higher courts were foreigners. This persisted up until 1965, when Niguse Fithawok, the first Ethiopian, assumed the presidency of the Supreme Court.

The final judge during the emperor’s reign was Hailessilase. After the emperor was deposed, there was a void. Thus, in 1987, the cassation bench was formally constituted.

I served as one of the justices on the cassation bench during the Derg administration.

Derg didn’t interfere with the system of civil courts. However, the government formed the military court system in addition to the already-existing civil court system. It never presented its cases before a civilian court; instead, it either executes its victims immediately or takes them to a military court.

Judges were therefore shielded from political interference.

The judges were fully removed when the EPRDF came to power. It stocked the legal system with cadres and individuals who could advance EPRDF interests. This persisted up until the 2018 inauguration of the present administration. There are several things that the present administration is working to fix.

What aspect of Ethiopia’s legal system is most lacking?

The practice of law is not based on reason but rather on experience. Justice must be acrobatic, just like life. Every judge gains knowledge from the rulings of earlier judges. Of course, some claim that this only applies to “common law” and not “civil law.”

Ethiopia adopts a system of “eclectic law.” This indicates that the principles were taken from several legal systems. Ethiopia’s legal system, however, is a little unclear.

On the one hand, we have the civil law cassation bench. However, a cassation bench’s ruling becomes law, and all courts below the bench must follow the sentence. The model is now comparable to common law.

The Ethiopian justice system has been disrupted by this difference in legal systems. Continuity refers to the use of prior judgments as standards for upcoming cases. Continuity is crucial.

Continuity provides predictability and confidence, two important advantages. Your win-loss ratio must be accurately known before you file a lawsuit. All of the stepping stone articles are already familiar to you. The courts would be unable to accomplish their jobs if every case required an interpretation of the law. A predictable life cannot be ensured by a judicial system like this.

In both the United States and Europe, attorneys provide clients with percentages indicating their odds of winning and losing. Ethiopia is the only nation without consistently applied laws. The main flaw in Ethiopia’s justice system is this.

The court systems and Ethiopian Bar Association must cooperate on this.

The Ethiopian justice system’s organizational structure is the second significant shortcoming. Ethiopia’s legal system was totally centralized, like one sun, one sky above everyone, prior to the EPRDF.

Ethiopia was divided by the EPRDF into nine different states, and that number is currently rising. There was discussion about how to reorganize the legal system after the EPRDF came to power and Kifle Wodajo was selected the leader of a group of specialists.

Some contend that, like prior governments, the justice system must be centralized. But the head of the Indian Supreme Court, Bagwati, present to offer advice, contended that Ethiopia cannot afford a decentralized court system. Others, however, believe that since the EPRDF formed a federal government, it must be decentralized.

Finally, the regional states and nine distinct court systems with nine supreme courts were approved by Parliament.

Ethiopia became the second nation after the US to implement a decentralized judicial system.

Under the US Supreme Court, there are 52 supreme courts. Because of this, America is the nation with the most lawyers. It is a new jurisdiction every time you enter a US state, thus the lawyers have to learn numerous laws in one nation.

The American federal structure is imitated by many countries, including Germany, but not its legal system. A decentralized court system was rejected by Nigeria, India, and many other federal governments because it was too expensive.

A decentralized court system appears advantageous at first glance. However, it is also expensive in terms of resources, both human and governmental. All we can do is hope and pray that Ethiopian leaders will be able to change this and unify the legal system.

How can the two main bottlenecks be eliminated at this time?

The constitution ties everything together. Ethiopia’s judicial system, however, can be centralized despite the fact that the structure is a federal one. India and Nigeria are two prime examples.

Currently, if a lawyer in Ethiopia wants to practice in many regional states, he must obtain a license from each of the regional states. However, if Ethiopia’s justice system is centralized, all of the regional states use the same article. A single license allows a lawyer to practice law across the entire nation.

In comparison to a federation, Ethiopia’s legal system is more like a confederation of states. Such a system is unique to the US, and only they can afford it.

Ethiopia is a small nation when compared to the size of America. Therefore, a decentralized justice system is not needed. It is incredibly difficult to reform and modernize Ethiopia’s judicial system. There may still be ineffective judicial systems in remote areas of the nation even after creating a centralized one.

How can the present border disputes with neighboring nations be resolved given that Ethiopia’s boundary was shaped by colonial powers?

England, France, and Italy all had boundary accords with Emperor Menelik. However, agreement does not imply demarcation. Ethiopia naturally agreed with England but not with Sudan. The current issue with Sudan stems from this.

The Prime Minister of Sudan, Alnimeri, and Haileselasie got along well. Just before the emperor was ousted in 1972, they were about to start demarcating the border. I hope Sudan and Ethiopia will start the delineation process right away.

Emperor Yohannes pleaded with England in the 1870s for assistance in keeping Masawa under control. Even though Yohannes assisted them in rescuing English troops in Sudan who were being surrounded by Mahdists, England refused. Meles Zenawi voluntarily gave over Assab a century later.

This is a huge contradiction.

But the situation with Sudan is becoming increasingly complicated.

As long as the 1972 agreement is in force, it can be resolved. The issue is that the borderlands’ value has increased recently. Ethiopia’s biggest issue is the absence of a succession plan whenever a new regime takes power.

Haileselassie came to an accord and was about to draw the line with Sudan. Sadly, Derg surpassed Hailesselasie. Derg, however, started over after stumbling everything the emperor had begun.

No Ethiopian administration adds on the successes of the preceding administration. Whether it be with the legal system, politics, development, or anything else, this is the root of practically all of Ethiopia’s problems.

Others have suggested Ethiopia may be able to reach the Red Sea via Ras Dumera, a thin free line that runs between Eritrea and Djibouti border.

Africa is home to fourteen landlocked nations. There is no other nation, however, that is as big, and as populous, as Ethiopia. The thirteen African nations that were already landlocked begged the UN to intervene before Ethiopia became landlocked.

Aid couldn’t get to these landlocked African nations. Even when a machine is replaced by a different brand, spare parts still come in. Because perishable goods take longer to reach the landlocked countries, importing them was unimaginable.

In order to negotiate between the African states, the UN tasked Yusuf Ahmed, at the time Ethiopia’s transport minister. This occurred under the Derg, shortly after which Ethiopia became a landlocked country.

A Kenyan academic once stated that Africa shouldn’t have more than 20 ports-accessible nations. He claimed that because even tiny governments are permitted to be countries, landlocked nations are created, dividing Africa into 55 countries.

However, the AU is introducing a very efficient procedure to grant all African nations access to ports. This will become a reality once the African Continental Free Trade Area (AfCFTA) is completely operational.

Of course, until Ethiopia uses them, the ports in Djibouti, Eritrea, Somalia, and other countries on the horn of Africa stay inactive. Masawa Port was undoubtedly a crucial tactic in WWII, acting as a stepping stone for the allied troops’ advance into Eastern Europe.

Currently, Ethiopia is attempting to enter Berbera port, which is positive.

Haileselasie made every effort to integrate Eritrea into Ethiopia in order to get access to the port. Assab port is obviously useless if there is a blockade of any type at the Suez Canal or Babel Mandab. Ethiopia is better off using Berbera port. There is nothing anyone can do because Berbera is the gateway to the ocean.

How can Ethiopia’s efforts to secure ports be impacted by Somaliland’s de facto status and lack of recognition?

The issues in the Horn of Africa can only be solved by peace. The horn has a sizable population. The chaos persists if this force is not used to development. Countries in the Horn of Africa must work together for the benefit of all.

The fewer jobs we produce, the more unstable we become.

Why do young people join OLF-shene, TPLF, or other armed organizations when they could get a respectable job, a home, a car, and vacation packages? Everyone wants to see equal development because they want to see their own country prosper.

Progress can lead to peace.

Due to the absence of an independent African state at the time, Haileselasie was banished to England. For that matter, there was no state.

Many people agree that Africa’s instability stems from the distribution of the same ethnic groups among its various states. Can African countries redraw the borders that colonial forces drew and reestablish nation states?

Ethiopia was at the vanguard of African decolonization in 1963, when the Organization of African Unity was established in Cairo. The main issue when the UN decided to decolonize was how to recognize and define the borders of African states. War was imminent amongst Africans if they had to trace frontiers back in time.

The UN and OAU ultimately opted to keep things as they were. In other words, borders and states begin at the location of the colonial boundary.

Each nation in Africa has territorial claims. We can’t, however, go back in time and fix it.

Ethiopia once ruled a sizable region, including the modern-day nation of Yemen, during the administration of King Kaleb in the fourth century. But we can’t claim it now.

The answer is that by uniting Africa through the AfCFTA, the AU’s economic integration agenda can eliminate the need for political frontiers.

Of course, Ethiopia is the nation that will be most negatively impacted by the status quo. The Congo, a sizable nation abundant in natural resources, was about to become landlocked. However, they were able to enter the Atlantic Ocean by Kabinda that was incredibly small. By the way, Congo provided the uranium for the bomb dropped on Japan.

A little opening between Djibouti and the Eritrean border allowed Ethiopia to reach the Red Sea. However, nobody is willing.

A serious hunger broke out during the Derg, and Nordic nations wanted to send aid cargoes. However, there was no way for the supplies to reach Ethiopia. Nobody would have protested if the Derg had taken one of the ports in the Horn of Africa at the time by force.

Ethiopia’s survival will depend on how its ports are handled in the current context of rising import volumes and growing population. It will either receive a peaceful response or a harsh one. Ethiopia must have a port, if only to use the congested route between Eritrea and the port of Djibouti.

The Ethiopian government also has to improve diplomatic connections with the surrounding nations so that they will consent to us establishing our own port.

Do you believe that Ethiopia’s conflict and ongoing instability are a result of the country’s power structure?

Ethiopia’s primary issue is underdevelopment as a result of missing out on the Enlightenment, the Industrial Revolution, the Agrarian Revolution, and the Technical Productivity Periods of the middle Ages.

According to Gibbon, who lived two hundred years ago, “the Ethiopians slumbered for over a thousand years, oblivious of the world by which they were forgotten.”

Of course, since we remained closed, we were not colonized. The mountains of Ethiopia were impenetrable to any force. Due in part to the progress that colonizers sparked, several African nations outperformed us.

Ethiopia nevertheless continues to be rich in resources and treasures. The only nation in Africa with a written past and its own alphabet is Ethiopia. 80 percent of Ethiopia’s bibles were completed and authored in the sixth century. At the time, the western bible was still in its infancy.

Additionally, Ethiopia was crucial in the spread of Islam and Christianity. Ethiopia was the destination of the first Hijira, not to Meca and Medina.

Unfortunately, because we were isolated for a millennium in between, Ethiopia’s civilization did not maintain its early impetus. We woke up when the world is already way ahead of us. We were still plowing the ground with oxen and yolk when Ethiopia awoke once more.

Youth in rural communities no longer have access to land for farming as a result of the land policy. Therefore, everyone is moving to the cities. Not only are Ethiopian towns crowded, but the proportion of farmers is out of proportion to the country’s growing consumerism.

Unemployment is widespread. There is a shortage of farmland. Ethiopia’s current issue stems from this. For the first time, PM Abiy Ahmed is attempting to spread large-scale agriculture to lowland areas in addition to the rain-based, often small-scale farming in highland areas.

What do you think of the administrations ongoing judicial system reform?

We voluntarily submitted to Ethiopia’s complicated legal system. One institution cannot bring about justice system reform. Huge amounts of public resources are being used by the decentralized justice system.

Ethiopia cannot support a decentralized judiciary when dozens of regional entities each have their own legal framework. This has to be combined.

Abiy recently complained to the parliament about how corrupt the legal system and police are. A few judges have been furious. It is well known that some judges accept bribes. Even judges of the top court experience this.

It is incorrect to hold the PM responsible in a legal system as tainted as Ethiopia’s. Though it is a challenging undertaking, we must find solutions to fix the issue rather than pointing the finger at one another.

The Court has the most authority in any nation that wants to advance. The future of the nation, business, and daily life depend on the Court.

What big setback do you believe has occurred since PM Abiy came into power? Was the transition peaceful?

We must research the causes of our ups and downs. Ethiopia has not done a very good job at nation-building. There are distinct state borders in Europe. However, the societies are very interconnected and quite similar. They are similar in terms of culture, languages, and universities. But the Ethiopian society has been segregated from one another, living in separate cultural enclaves.

Social media is currently dividing our society even more and pitting everyone against one another. Nobody is accepting accountability. We have much work to do in order to build a civilized society.

Ethiopia’s unemployment and unrest don’t surprise me because I am aware of our incapacity to provide quality labor and excellent jobs.

Five years ago, nation-building and good governance were the social movement’s top demands. Today, the issue has expanded to include the state’s continued existence. The student movement during Haileselasie began with a “class struggle” and concluded with ethnic politics in a similar manner. Why do political groups in Ethiopia consistently fail to achieve their goals?

Due to the students’ limited exposure to other ideas and the “class struggles” popularity in Cold War-era politics, the students’ movement adopted it. However, the class battle diminished and gave way to an ethnic conflict, which Meles Zenawi pursued.

Many Ethiopian academics today, particularly those in the diaspora, believe that ethno-nationalism poses a threat to the state’s very survival.

This indicates that the nation-building process in the country has been derailed by ethnic identity politics, which is having an impact on both the nation-building process and the state’s very existence.

Nationalism is not necessary for Ethiopia. The United Kingdom, France, the Netherlands, and even Italy are examples of nation states. The US, however, is not a nation-state. Europeans make up half of the American population.

One hundred years ago, Ethiopia became a nation-state. However, due to a number of criteria not being met, Ethiopia was unable to become a nation-state.

Many academics, particularly those from Addis Ababa University, continue to vehemently inform the media that Ethiopia needs to become a nation-state.

Talking about nation states now is a farce. Instead of a nation state, Ethiopia needs to be a patriotic state. Everyone in their own ethnic group is patriotic. Every Ethiopian, including Oromo, Kembata, Amhara, and everyone else is a patriot. That is what the United States is.

Everybody is present in America, including Latinos, Chinese, Indians, French, and Blacks. However, they never give up on the United States, which is their nation. Although they are patriotic states, they are not nation-states. To advance a patriotic state, we must work together.

In Gojam, there is no such thing as a pure Amhara. Every ethnic group has ancestors from different ethnic groups. Only our names reflect our racial origins.

Ethno-nationalists and ethio-nationalists swing back and forth in Ethiopia’s politics all the time. This constantly sparks conflict and a struggle for dominance. How can we transform it into a nation of patriots?

The constitution may impose restrictions on it. It can be written into the constitution if everyone agrees to it. Otherwise, Ethiopia will experience civil conflicts and revolutions.

Many people concur that the majority of Ethiopia’s issues can be resolved if the present constitution is altered. Do you agree?

It should be altered, in my opinion. Both educated and uneducated individuals are condemning PM Abiy for sticking with the current constitution. The constitution is frequently compared to an Ark. If the public does not believe in the law, it is just a piece of paper.

Therefore, if a carefully considered constitution is substituted, Ethiopia’s issues can be resolved.

Human rights advocates and even government representatives claim Ethiopia’s judicial system, especially the court system, is unprepared to handle cases involving human rights violations. They advise Ethiopia to start accepting the jurisdiction of extra-national judicial systems as a result. This means that Ethiopia must recognize the authority of regional and international tribunals over any violations of human rights.

Does doing so undermine Ethiopia’s sovereignty?

Only when the executive, judicial, and legislative branches operate in accordance with the check and balance principle can Ethiopia’s justice system be said to be in operation.

Judges are only answerable to the law. Because I criticized the Derg’s military court system, I was removed from my court position. Since 1948, Ethiopia has fully embraced the rule of law. Judges must, however, exercise their authority.

Courts have full authority to resolve any dispute, with the exception of arbitration disputes. Ethiopian courts have the authority to adjudicate matters involving violations of human rights, particularly at the high courts and Supreme Court.

The establishment of a different type of court system in Ethiopia must be spelled out in the constitution. For human rights matters, we can set up special benches, but we cannot establish a separate court or division.

The UN human rights commission is currently requesting entry to the country in order to examine human rights abuses that occurred during the Tigray war. The agreements and treaties were approved by Ethiopia. What would happen if Ethiopia resisted?

We have observed that the west consciously wants to harm Ethiopia in numerous instances. Since the founding of the League of Nations, this has been the case. Sanctions are being imposed on Ethiopia.

Mussolini would not have been able to attack Ethiopia if only the US had imposed gasoline sanctions on Italy. Because the US continued to supply fuel to Italy at the time, Mussolini resumed the invasion.

Ethiopia was brought up thirteen times in UN Security Council discussions last year.

International law thus serves as a vehicle for both justice and abuse.

The US regularly uses the UN to impose sanctions on nations it wants to destroy.

Never should Ethiopia yield to outside pressure.

Ethiopia has ratified a number of international human rights accords and conventions. By the way, Theodore Roosevelt’s wife was the one who first proposed the 1948 Universal Declaration of Human Rights (UDHR).

It forbids the use of cruel or inhumane punishment. Ethiopia had a death penalty at the time. The emperor delayed ratifying the UDHR rather than repealing the death penalty law. Ethiopia, however, is the first country in Africa to sign the deal.

Politics is at play right now, not just a general worry about human rights abuses. Before authorizing foreign investigators and acknowledging their jurisdiction, it is imperative to exhaust all domestic options. Extra-national venues may be taken into consideration if there is no statute allowing human rights victims to appear in court or if the court is unable to uphold the law.

America commits to defending democracy. Democracy is the majority’s way of ruling. Therefore, by simply agreeing, the majority can flip the truth on its head.

Can the Chief Justice of the Supreme Court call the executive to inquire of him or her? How are checks and balances made?

The Chief Justice of the Supreme Court lacks any judicial or executive authority. The president only serves as the court’s speaker. The president only responds when asked.

By the way, a judge on the Supreme Court is distinct from a judge in a lower court. The author of ye’ ewunet Mirkuz, and a lawyer, Wondimu Ibsa was born in 1947 in Arsi. Having survived the 1969 revolution, he joined Wez League and then started teaching. In his career as a former politician, Wondimu had gone through several challenges as a former politician before becoming a lawyer. He survived the 1969 revolution in Ethiopia and was arrested in the famous Maekelawi for 150 days. When he decided to become a lawyer, his first task was serving political prisoners facing terrorism charges. Lately, he is more known for sharing his political views on main stream media outlets. The Reporter’s Selamawit Mengesha sat down with him, as he reflects on current affairs and his journey in politics of Ethiopia.

The Reporter: can you tell us a bit about yourself?

Wendemu Ibsa: I was born in what is considered a large family. I had 17 sisters and brothers and my father had 47 children from 3 different women. When I was growing up the schools in Arsi used to encourage us to learn Amharic. And some people associated it with racist remarks but it was purely to help us learn other languages.

I was amongst the students who survived the 1969 revolution, I was in ninth grade and I remember crying to my mom when soldiers would beat us senseless. When the ‘edget behibret’ campaign started, the Ethiopian People Revolutionary Party (EPRP), wez league (ወዝሊግ) and All Ethiopians Socialist Movement (AESP) were wreaking havoc across the country.

I joined senay leke’s party Wez League. Students whose average was above 90 were selected to give after class courses back then, for which I was selected. I started working as a teacher starting from 1969 to 1971 with a 180 birr salary. Through all of this, we were running the revolution on the side.

I’ve went from having my parent’s religion to having no beliefs but I eventually got baptized at 40 years of age and became an orthodox Christian. I then worked as a money collector at the church for four years.

I was also detained in the famous ‘Makelawi’ for 150 days, when EPDRF took power in 1983.

I’ve also worked as a supervisor and a director in Hawassa. As a lawyer in Adama, I joined the Oromo Federalist Congress in 1998–2002. In 2006, when more than half of OFC members, including Merara got arrested, I decided to give my services as a lawyer. Back then, lawyers used to charge more than 300,000 birr to represent people accused of terrorism, because representing people accused of terrorism could label them as terrorists as well. Knowing this, I offered my services at makelawi for free, and since then I have represented 600 people accused of terrorism.

When I was serving free of charge, I faced a lot of opposition from people including my family. I remember a judge telling me that I can’t defend people charged with terrorism anymore, but 17 of my colleagues had already decided to represent those accused of terrorism.

Prime Minister Abiy Ahmed (PhD) has said they will not arrest anyone without due diligence, yet we are seeing a lot of people arrested abruptly and detained for several days without cause. What do you think changed?

“We don’t arrest without due diligence,” is just a political way of speaking. Currently, the parties in Ethiopia including the incumbent follow a party politics system, meaning it is the top executive’s playground. A political party stands for justice for those that are with it or against it. The parties in America, the republicans and democrats, are political parties, while Prosperity Party, Ezema, ABEN, Enat, amongst others, look like they are trying to shift from party politics into political parties.

A lot of Ethiopians were involved in the green legacy campaign. But out of the 53 parties, not more than 10 were involved. Why weren’t the rest involved? The legacy is not for the PM but rather for generations to come. They could have contributed to something that made a difference but the only objective of party politics is to obtain power.

When Abiy said that, it was in the essence of party politics. To whom does the PP belong to? Is it for the prosperity of the city, the rural area or the farmers? It should have been called “Ethiopia’s prosperity political party.”

Political parties care about the country, its people, history and culture. Even if political parties try to gain power they still stand for the people. The Civil Code, which has been in action since 1952, says that people can be arrested based on suspicion with or without a court ruling. Back in the feudal days, it was only allowed to arrest suspects from 6 in the morning till the sun sets but not after even if they were guilty. Police can surround him but they can’t arrest him, no matter who the person is. If Abiy does not practice this law, then the EPRDF and Derg’s plague hasn’t quite left his system yet.

The practice that is becoming normal these days where they hold people in prison for eight or nine days is not acceptable by law. Statements like “We don’t arrest without due diligence” are said with a political intent. Politicians and political parties think about what to say to get more applause instead of thinking what would actually benefit the people.

What is the cause for the killings of innocent people in Ethiopia? Who do you think is responsible for these acts?

The instability in Ethiopia has its roots dating hundreds of years back, back when colonizers had their eyes on Africa. The victory at Adwa was not just a victory against Italy but against the whole of Europe. Ethiopians used to unite to defeat these outside forces. When the west found out the secrets to Ethiopia’s victory happened to be in our unity, they needed to dismantle this unity through civil wars and parties. These parties who have a budget from the west have the sole purpose of creating conflict and rift between ethnicities.

Controlling the source of income was also a measure used by the west since the country is dependent on donations. After the 1945 World War, Japan was forced to adopt a strong military system. Within 30 years, Japans capacity was just as good as the UK, after changing the policies they were forced into. The donations are an indirect attempt at colonization.

The crimes we’re witnessing today is a result of years of planning by the west. There is this thought process circulating where people think their ethnicity came first or that it is better.

Even banks organize themselves based on ethnic lines; they have the “divide” mentality. People that are losing their lives are Ethiopians and there is no need to classify them based on ethnicity. Being proud of your ethnicity only validates Ethiopia more, because our ethnicities are found within Ethiopia.

If we take the religious approach on how humans originated, it started with Adam and Eve. They were human beings and not Amhara or Oromo. We are Ethiopian’s first then ethnicity follows; so, to refer to the atrocities in Wollega as atrocities committed on Amhara women is accepting the narrative pushed by colonizers.

Amhara’s policy is Oromia’s policy and vice versa; we can only salvage Ethiopia when we stand all for one and one for all. Being Oromo, Amhara or any of the other 80 ethnicities is natural but claiming one is superior over the other is immoral.

How do you think this can be mitigated?

Parties and politicians that stand for terrorism should be dealt with to make way for the people to have an active role. The government feeds 1.7 million students in Addis Ababa and its surrounding. It provides books, uniforms and bags. The only thing families worry about is providing the dinners. This is not something to overlook. When I say this am not saying prosperity party or Dr. Abiy are without flaw, all governments have flaws.

The community’s outlook on laws and courts is relatively better than it was before. Do you think this has anything to do with the organizational change? If there is change since most organizations are individualistic, how can that be mitigated and continue long after the individuals have left?

Prosperity Party asks organizations to help it achieve democracy. A strong military can only be formed when there is a strong organization. Law enforcement is the government’s duty while respecting the law is everyone’s responsibility.

In a meeting amongst 1000 lawyers in Oromia held by the Oromia Lawyer’s Association, a lawyer said “there are no courthouses in Oromia, or judges. The only place where judges and courthouses exist is at the Oromia Supreme Court.” But there are Oromo judges and courts in Ethiopia. If we’re accounting for injustices, then every other supreme court could come into question. The acts of a few lawyers and judges that are deeply intertwined in ethnocentric beliefs do not dictate the profession as a whole. Even the PM has no right to misjudge the profession because there are honest judges and lawyers.

What should be done to promote accountability? Would people who have violated human rights be questioned in the court of law?

The current atrocities are due to terrorists, whether they are Oromo terrorists or Amhara terrorists. Both cultures have their own way of justice that involves forgiveness. The involvement of the elderly is needed.

Political parties are creating a better life for their children while condemning the innocent. Those responsible for these acts of terrorism shouldn’t be judged in court. All the region’s religious leaders and elders should judge and reconcile things themselves.

The newly formed National Dialogue Commission plays a vital role for this, but political parties have been skeptical since its inception. If all Ethiopians come together, it will help the national dialogue to be successful. As politicians put it, the dialogue is not one carried out between parties but one that involves farmers that make up 85 percent of the population. As of now racist politics and ethnocentric politics have spread.

The current problem will not go away easily. It will take several years of working together.

There is a noticeable change in courts after Meaza Ashenafi took power, but there are also a lot of problems at the same time. Just like how a teaspoon of poison could ruin a barrel of water, the acts of a few taint the entire institution.

How can we stop the problems in all the regions of Ethiopia? How can the region’s questions be answered while maintaining peace?

The people should give information as a way of solidarity with the government. The 547 representatives at the Parliament represent 120 million people. For a parliament member to talk about their own ethnicity alone is really shameful, they are not there to represent the Wereda that put them there but to represent the people of Ethiopia.

If there are people in Parliament that spread fake news, then prosperity party is negating its own progress. There are a few that are openly opposing the death of fellow citizens. When a citizen is hurt in wollega, there should at least be an opposing brief against it from the Parliament. If prosperity is leading the country, a region’s Special Forces should be able to help another region’s army. The defense force alone cannot save the country.

Rophnan Nuri, commonly known as Rophnan, is a prominent performing artist, musician, DJ, singer, songwriter and an audio engineer that blazed a trail for Ethio-infused electronic and house music. The Artist made a name for himself as DJ Rophi before releasing his first album, Reflection, in 2018. The album made him the first ever artist to release an electronic music LP in Ethiopia, becoming an influential figure locally and internationally.

Mixing traditional sounds with futuristic undertones and a powerful lyric, he dedicated his debut work as a voice for his generation. His work earned him multiple awards, featured with world famous groups like Major lazer, and collaborated with the Zambian rapper Chef 187 on the coke studio stage. He also held a successful country wide tour for a year and half.

His work and demeanor has earned him a feature on Forbes Africa’s 30 in the creative category, making him the first Ethiopian to feature on the list.

He recently released a successful album “3” earlier this year, which he followed up by “6” this past week. The two albums, which were released after his deal with Universal Records, offer incredibly produced music directed at the youth.

Rophnan announced the final album of the trilogy will be released before the end of 2022. Yosthena Aynalem of The Reporter sat down with Rophnan to talk about the mystery that is Rophnan Nuri.

The Reporter: let’s start from the beginning. Can you tell us about your upbringing and how you got into music?

Rophnan: Funny enough, it did not start out with music for me. Yes, I have known and loved music all my life but my journey did not start there. I am a singer but I am not just a singer, or just a writer. I am a recording artist that engineers and produces as well, but I am also a DJ. I think when you’re all of these things your journey must start with one thing. For me, it was recording.

I started recording sounds from a young age and little by little I went from recording to learning the guitar, DJ’ing and then singing. It all unfolded gradually to make me the artist I am today.

I remember I started recording my mom when I was 10 years old. That was my first experience of getting into music. Because to me it wasn’t just music, I thought everyone had the same relationship with sound and music as I did. Through time, I came to realize that not everyone was drawn to it the same way. At that age, I used to perform in front of students and they would love it, but I thought that was normal at the time.

I started recording my mom out of the love I had for her, I would use tape recorders that I make from scraps; I have always been a physics head because it helped me know the world better. I would always make things up from run down electronics or collect parts like dynamos; I have always been that kid.

I always wanted to keep a record of my mom’s voice in my tape recorder, so I’d play it on repeat until my battery dies and that was a 10-year-old me falling in love with sound and frequency. From then on, I started recording my little brothers, my neighbor’s kids, and my friends.

It became my way of keeping a photograph or picture of some frequency, those records painted pictures in my head that ensued emotions in me just like a picture would. I have recorded my mom till my last conversation with her, she is not here anymore, but I’ve kept her voice till our last conversation, so I have basically recorded my mom for 21 years.

So, how exactly do you experience sound?

I always see colors when I think of sounds, even when I am asked to do commercials. I will always ask them what their theme color is so I have a sound for that color. Every color in the way it’s painted or crafted has the same pattern in music because in order for something to exist it needs pattern. Music and creativity have a pattern of their own. A very good example for this is the project I did in Dorze in my first album, it was literally the pattern of their denguza (Welayeta Traditional Cloth) that inspired the music, and it is a mixture of black and red patterns.

So, the pattern on this attire is that when one color goes in, the other goes out, their song is the same way, so you can represent the color in different voicings and you have a pattern which is a harmony and the Dorze people are one of the most harmonious people and that is one of the things I learned from them.

Harmony is everything. It is embedded in their music, their day today life, culture; they know how to sing and be in sync within. That is how I see sound no different than pictures or any creative work.

What classes have you taken to master your craft?

Endless practice and my experiences were my lessons. I remember building my first studio with Abu-Walad biscuit box and Miyota DVD microphone when I was 13. I continued performing in class rooms and jamming, and I have also been listening to FM Addis 97.1 from the first day they opened. Eventually I started working there for three years later on in my life.

I think I was 10 or 11 when they started and from that moment on, my whole teenage time was spent listening to a lot of radio. Radio became a huge part of me, sound was everything because my experience is my mom’s voice but I started hearing her voice through other moms. Even when I travel and record, I know that tone, it has the same spirit.

A sound does not lie. That is why mostly my music is based on tone and notes. These are my inspiration when I make my music especially when I am trying to go deeper in the culture and get something out from it.

At what point did you start DJ’ing?

I started DJ’ing or I would say playing in mini media at the age of 15. I got introduced to computers at the same time and realized there is a thing called “software,” which allows me to record vocals and play with instruments that are already recorded, make patterns out of them and make music. So, I started doing that when I was 15.

What most people don’t understand is the reason my recordings are clear is because I’ve been recording for 21 years. I am more experienced than most people who are in my age group. I have been producing for 17 years now and I just turned thirty-two. So the reason why my production is this good and I am getting better every day is because I have been doing it for a long time. You have to understand that this recording, this clarity and this skill doesn’t come easily. You have to work on it and you really have to put your time.

When I turned 17, I actually started DJ’ing. I got introduced to a DJ mixer. I put out my first mixtape when I was 16, remixes of songs at that time, whether Amharic or English, I literally did what I used to do in the classroom and changed it into a record.

I already had recorded data in my head and the computer allowed me to turn that into a recording so I started DJ‘ing that music. It was a way to put my music out. It became the best platform for me instead of being a guitarist, a vocalist or anything else. DJ’ing was the first introduction for me to put my music out and then it goes on to working in Radio.

I used to play my mixtapes on the radio when I was 18, 19 or 20 and that gave me the platform to be famous. After that, I put out my second mixtape and then I continued producing even more, production has been there since I was 15 till now.

When I turned 21, I stopped putting out mixtapes after the third one because I wanted to do an album of my own. It took seven years of my life in the studio, worked day and night, 16 hours a day, every day, while DJ’ing at night and paying rent. That circle went on for seven years straight and then Netsebraq was born.

I went from 21 to 28 years old doing nothing but producing, learning how to write, learning to sing better, learning how to record, buying new better equipment, working on myself and my craft. It took everything out of me.

That is why Netsebraq sounds the way it does, it was crafted from scratch and I found a new sound for my generation the world has never heard of, a new sound for my country and for the industry and that took time.

I found myself in music, in a new way of writing, progression, of sounding, recording and all this took time. It was not just a project. Its impact can be seen through DJs coming into the mainstream, singers to find themselves. I hope I am not fooling myself when I say this but, I think Netsebraq proved to artist to be themselves and to sound like themselves. It brought free thinking to this industry but it didn’t happen overnight. It was something that was crafted for a long time.

When was the first time you Disk Jockeyed professionally?

I started doing my own Day Party’s after high school in college where I started throwing parties for people in my own age group and a lot of people came to my sessions. Back then, there was no platform you can use like Tik Tok so people just attended my parties using flyers and a lot of people showed up because of the mixtapes I used to release. At those parties’ attendees didn’t pay attention to the music, just how it made them feel, they don’t really understand the craft.

Out of the whole experience, what has been your favorite part?

Definitely my first album release party, because I had been working none stop before that and when reflection happened, I was famous in most cities as a DJ. I would go to Arba Minch and pack a place of 2000 people, as a DJ I was doing really well. I was making good money and had good exposure as well, especially on the last year before Netsebraq.

Netsebraq brought me to the stage as a singer, song-writer plus a DJ. The DJ part has been subtly following me. But my first album release party was a very special moment for me. It was three months after the album had dropped and the place was packed, people were at the gates lined-up because the place filled up early.

All of that happened within three months and it was very historic. An up-and-coming artist, who is a DJ, selling out a concert was not common; it was unheard of then. For me it was a moment I will never forget, because I remember the energy that night. I had never seen an energy like that in my life, that made me think to myself “oh wow, I have made it this far.” Seeing people sing along to songs that I wrote felt surreal, something I created spoke to them enough for them to know it by heart and that truly astounded me.

To answer the question, the release party truly stands out for me, especially when I was playing the piassa song. I remember time freezing, my friend and fellow DJ, who I grew up with, was back stage with tears in his eyes because of how amazing it was. We used to walk back home after DJ’ing because the first two years of my career, I didn’t have enough money to even pay for my taxi-fare home, so we walked to places instead. I dropped opportunities my family offered me to go to the US, I dropped out of Piloting school after completing almost everything, and I then joined computer school.

And were your family supportive through all this?

Well, my brother wanted me to go to Pilot School, he was ready to pay for it and arrange everything. I went and did everything, I didn’t think I would get in but then I ended up getting in. When I did, I went to my mom and told her that I made it in, that I could follow this path and that I didn’t think it was for me.

The only thing closer to music for me at that point was computers and I would rather go and study that. And she was very supportive, she said ok and that I should be careful. My family had always been supportive of my aspirations which I am forever grateful for.

I remember when I finally got the deal with Universal Records, the first thing I did was to tell my mom and record her in the process. She was always willing, she never turned me down. She was always there for me, had she said no to me backing out of pilot school back then, I would not be where I am today. Rophnan, as a musician would have never existed. I am forever indebted to them for that.

My father on the other hand used to always tell me “Whatever you do, sell it.” He never told me what to pursue or to stop music just that I should do what I love and whatever that is I should sell it. He raised all of us like that, if you love something learn how to sell it, so you’d learn to perfect it and love it even more. Selling it would give you the money, time and opportunity to grow it and polish it into something better.

If I never sold my first mix tape, even if my first salary was just 500 birr, I wouldn’t have had the resources to support my endeavors down the line. Money is money no matter how small it may seem; it will serve as a stepping stone. I am not saying to just do it for the money but you have to account for your time with something; gain something from it, no matter how small it may seem because your time is the most valuable thing you have.

You are currently amongst one of the top artists in the country, yet you are very private, not very active on traditional media but you’re also active on social media, why is that?

I wouldn’t say I am private, because I am always posting. People know what I eat, what the studio looks like, where I work out, when I’m working. If you ask an average person who follows me on social media what I do, they’ll tell you that “he eats healthy,” I go to gym at midnight.

But as for media, I usually don’t go out unto media because I don’t really have anything to say. I have been away from media for around two years now and that’s mostly because I didn’t believe I had anything substantial to say and I don’t want to come on and lie, so I chose not to say anything.

I am the kind of person who likes to understand people’s truth and delve in to it. I believe a lot of truth is subjective and I am open to hearing other people’s truth but I know that a lot of people don’t see it that way.

What I consider my truth might not be what people want to hear. So, if I were to come out on media and say what people want to hear and not my truth, it would be a lie. I never want to lie to my fans; that is disrespectful. I would rather communicate with my people through social media and show them what I hope would inspire them, show my craft and take them through my creative process. And when this album comes out, it wouldn’t be alien to them because they saw the work that went into it through my social media posts.

I would rather communicate through that because who am I to comment on things I don’t know and understand.

I know and understand that everyone also has their truth that they’re exposed to and I am nobody to negate or support that. Until we all find a common ground of saying I respect your truth as much as you respect mine, I don’t see the importance of going out in public and creating controversy instead of looking for a solution because we can see that nobody is listening to anybody anymore.

Everyone is looking for voices and opinions that confirm their truth instead of openly listening to everyone unbiased. So, of course I am private, because I have nothing to share that my fans don’t already know. I am just as confused as everybody else and if I can’t help, I would rather listen and try and learn about everyone’s pain and truth.

And to me, music helps me do that.

Interesting, steering a bit off topic, you’ve mentioned you regularly attend the gym at midnight, why do you do that?

For me, it’s more mental than physical, because I don’t want my studio to be the hardest thing that I do in my day. Because the hardest thing is always seen in comparison, the hardest part of your day is the most dreaded part no matter how much you love it.

To not lose the love, I thought I would create something more challenging for myself. Now for me, the studio will continue to be more exciting because it’s not as hard as getting up at midnight and going to the gym. Contrary to what most people would think being in the studio is very tiring. You sit there for hours and hours daily; the not knowing of what will come out of each session creates a lot of anxiety as well, so when I add the midnight gym on top of that, I would have a much harder thing to do, which pushes me to like the studio better.

I needed that push because I had to finish three albums in two and a half years. It took a lot out of me and not just me but it took a lot out of my management as well. To deliver three albums in this time frame was really hard. Normal working hours don’t quite cut it.

Back in the days, it was really hard for artists to make a living off of music but the tides are changing now and artists like you are making a difference in that. What do you think propelled that change from your part and your peers as well?

I know it is getting better comparatively but it is not on the trajectory it needs to be at. There are still artists that are not earning their fair share but I think YouTube democratized so many things. It gave the power to artists to some extent. What got better is not the payment but the exposure. Artists get to be discovered in a quicker, better way.

As for back in the day, if the person who worked at ‘hire treat’ did not like you personally no one would know your name. Now, we’re exposed to more artists because we have access on our own terms. Young artists have better platforms now and bigger exposure where their music gets the chance to be discovered by many.

For me personally, I am rooting for all of us. When I hear an artist getting paid a million birr or dollars for music, it makes me ecstatic whether I like the music or not. It makes me so happy because the industry is getting paid this much, which is a win for all of us. It would mean fewer artists who are unable to support themselves and their family through their craft.

At least they would set a standard of artists earning a good life. I think what is happening is there is the YouTube market that is supporting local artists. Even if the public isn’t directly paying for the music, they are exposed to it at least. There are platforms that would support artists even more like Awtar but people barely use them.

When people buy the music, the artists will directly benefit from that so I encourage listeners to get their music from platforms like that. I think that is the main market but for now, YouTube works wonders for the industry.

What are your thoughts on people saying Ethiopian music died after the golden age? Some might say today’s music is more diverse and the time for it is now. What is your input on that?

Whoever says the time for Ethiopian music is now, I just want to say that I appreciate you all. Because a lot of people discourage what the industry is right now, saying it could never amount to what it was back then. The way I see it, if you grow up listening to any type of music, even if it’s just whistling, you’re going to have an attachment to it because it would be nostalgic.

It is hard to compare today’s music to something that has been part of people’s memory for 40 plus years. There is a lot of memory attached to it that can’t be compared. It is like expecting a new born baby to win a race against a 40-year-old, if you were to give 20 more years to the new born they will definitely win against a 60-year-old.

So, if you give us time, we too will have that nostalgia factor that would make us amongst the classics in people’s mind. Every generation has a favorite and it mostly has to do with the memory attached to it. I think it has more to do with nostalgia rather than production, quality. The golden age music was well produced, very powerful and well written too but I don’t think they need to be compared with today’s music.

Today’s musicians are very creative. They too have things to say, they too are well written; the people making the comparison probably grew up with those songs and they might not understand today’s music. Not understanding something does not make it lesser.

Considering artists back then, even the greats, did not put out a lot of albums or singles when compared to today’s artists who put out music more often. Why do you think that is?

I think it was very hard to put out albums back then than these days. But artists suffer to put out albums these days as well. There are easier platforms to make and sell your music on but I think artists are still suffering in a sense that studios are not easy playgrounds to play on.

The industry still does not really pay creatives; studios, composers and writers are not paid the right way. So, until that day comes, don’t expect too much creativity because creativity is also run by the freedom of time that you can make music.

If I am not getting paid well, I’ll just do something to pay my rent. Something that is easier. That is why getting paid can make a difference. When I say this, people might automatically say in the 60s they were not paid but they did so many things, no they were hired by the government.

These writers were hired by the Ethiopian National Theatre, Ras theatre, Cinema Ethiopia, and all those bands in mazegaja were hired and they were workers who were paid a monthly salary especially during the time of Haile Selassie I. That’s their actual job. They were workers who went in at 2 o’clock and left at 8. Most of us are self-employed so that also has its own impact on what you’re going to do and what you’re going to deliver to the art because you can abuse that freedom as well.

In general, I don’t agree with the comparison and I don’t think it’s fair. My generation is putting out a lot of good stuff. Think about it, if you call your days the good days and things were so well in the 60s and everything was nice, then why you would expect better things from me then, while you understand I’m living in a worse time.

So, coming to the new album, you said earlier that you were into physics; does that have anything to do with the 3, 6, 9 and the universal numbers?

Yeah, I mean you have to understand the Orthodox Church has a big explanation over this because it has a lot of knowledge about the world and the universe and everything from ancient times, but also those teachings were spread throughout the world in different ways and one of the people who understood this in early times was tesla.

He brought this idea of these three numbers being the key to unlock the universe and to understand the whole thing. If you understand things from the perspective of frequency, vibration and energy, you’d understand the world in a much better perspective.

Instead of saying me, me, you will start to say us; instead of just boosting up your ego and saying, man is everything in this world. You will understand the relationship of man in the world. And then you will protect the world.

What I’m trying to put here is for my generation to see things from a bird’s eye view. Let me put it this way, everything that we use today, phones, computer, internet, technology, all these things that we kill each other for is made by the people who understood this, these higher understandings of the world. Because how can a person make a phone that can do miraculous things without understanding the world holistically. I think the perspective that we have about ourselves and the universe is distorted and that’s why we’re very tribal and biased.

The bottom line is, I think the understanding we have about ourselves and the world should change or should be in check.

So, what I try to do with this 3, 6, and 9 is to show people that there is a higher perspective of looking at yourself, the world, how it goes and how it functions. If you understand that, everything becomes lighter, everything becomes a shape that will be understandable by the next person.

The names are inspired from that. So, when people say, oh, it’s three, it’s six, it’s nine, it’s like you’re engaging with these numbers, raising curiosity amongst listeners to look into these numbers, which will hopefully raise a question in people’s head so that they can have a better understanding of the world.

It’s always much better to look at yourself within the world. What I mean by that is like, yes, you are you, but you are in the world so know the relationship you have with the world, and then you’ll have a healthy thought, instead of saying what did the world give me? You’ll understand and you’ll start to say, what did I give to the world, what are the things that I said this morning? Most of us we’re just living inside our head, we don’t really live.

How has the experience been with Universal Records?

Well, I’m learning a lot from how the world moves, how it works, how everything is intentional; intentional in a sense that the world is moving faster. It was like going from being a small fish in a tank into a small fish in an ocean, it’s so big and sometimes it’s challenging but exciting for the most part.

I’ve seen a lot of people working day and night to make things go the right way. For me, it starts from my management company, Dots, all the way to universal music Africa and the whole team who have worked tirelessly to make things go smoother for me. I am very thankful.

The one thing I’m most thankful for is getting to release 6 at this moment, because according to our deal with the record company, I wasn’t supposed to release it now but we demanded it because I felt my generation needed it. There are songs in the album I really want to put out at this moment because my generation needs it.

They’ve been willing to compromise on things for me and understand that I’m coming from a different side of the world that they never existed in. So, it’s been challenging for them and I can understand but they they’ve been nice to me, I feel like I’m in great hands to join the world.

Other artists like Aster and Gigi have signed to international companies and represented our country. Hopefully, I’ll be able to get to do that as well. I’m following in the footsteps of giants. I hope I deliver something worth a while. Honestly speaking, to join the international world has been a dream come true.

Do you still get to work on crafts that are still true to yourself?

Of course. They do not affect my craft, rather they just help. That’s what people don’t understand. People thought they’ll make me do things their way, if that was the case, I would have never signed anything.

They’re here because they loved what I do. So, why would they touch it? But they will help me delve in deeper. They want me to experiment in our cultural music more and they also allowed me to stay here. I’m still based here; I’m producing my music on our soil. I’m still intact with the people. I’m still a part of the community.

The future is exciting. I have a full control over my artistic freedom. They don’t bend my music into anything, they even provide me with more freedom and guide me through the lines, and present me with better opportunities.

What is the perspective of 6 and what does it mean?

Yeah. So 6 means a perspective of a six-year-old. When we were at that young and impressionable age, our intentions were clear and our ego was not built the way it is now. We were not stiff. We were eager to learn and we had a better understanding of the world.

I think in order to become a better generation, we have to learn how to become young and find our inner child. To tap into my inner child, I went to kids. I went to orphanages and just spent time with the kids, communicating with them, asking them to paint me stuff.

I’ll give them words and learn their perspective. For example, I’ll ask them for testify. Like, what do you think about the word testify? And they’ll just paint me stuff. Through the genius of my graphic designers Fanuel Leul and Tsegaw Tesfa, we were able to incorporate those paintings on the album art.

I also wanted for those six-year-olds to see themselves being represented, so that they can have better guts, that our traumas cannot hurt them, for them to have a thicker skin to say no to us, if we are ever to push our biases onto them.

I want my generation to be purposeful in not passing that trauma to the young. I am hopeful this would empower them both. We are alien to kids because our biases have molded us somehow. They don’t quite vibe with us that much. When they hear their voice in my album, they’re automatically engaged through the things that I say and to the songs that I put in there. It will eventually become theirs. So, when they grow up people will not manipulate them, the way we have been manipulated.

What can we expect going forward?

“9” is coming out in December and somewhere between then and now, we’re planning on having a festival celebrating all my music with fans.

It’s going to be a series of beautiful engaging events, and till then I hope everyone enjoys 6 and gets the message.

The TPLF is the enemy of Ethiopia and the people of Tigray point blank. The government says that it would make peace with the group but as Ethiopians we can’t forgive that party even if the government fulfils its diplomatic responsibilities. I did not say the people of Tigray, rather just TPLF.

The role of Ethiopia’s government should be identified; the election board should not be giving out certificates for parties that work with terrorists. If they get a certificate, then the TPLF would need one as well.

The country is on the precipice of prosperity now. Our current state could be depicted as a nine month pregnant women ready to give birth on any day. It is always darkest before dawn, Ethiopia’s people come together even stronger when there problems pile up.

We should be careful with parties that try and create the gap between ethnicities.

How can the government enforce a justice transition? What should be included?

Justice transition means the world did not get civilized through a revolution, but rather through reforms. Reform means averting the negative impacts and carrying on already started projects.

Justice transition implies those that refuse forgiveness and acceptance from the recently started national dialogue and the people that are being accused. Each one of the perpetrators will not be brought before court but instead will have to reconcile their differences in the regions customs, which is according to justice transition.

This is the outcome of the reforms. A new education law is now being drafted, in addition to changes to the education policy. These and other innovations in teacher education are greatly appreciated.

The Association applauds the improvements and supports the next developments.

In the last three years, for example, the panda bag arrived in Djibouti and stayed for more than a month, and we were required to pay tax. We would not pay that money if the Ethiopian government was facilitating faster. We occasionally lose bags or items in a warehouse where we keep the bags.

It’s pointless for me to go over what happened. It is all well known that we simply need to take our time and evaluate everything before coming up with a way to mediate it.

ወቅታዊ
ሪፖርተር

ክቡር ሚኒስትር

[ክቡር ሚኒስትሩ ከፕሮፓጋንዳ ጉዳዮች ኮሚቴ ሰብሳቢው ጋር ስለ ሰሜኑ የሰላም ስምምነት ትግበራ መረጃ እየተለዋወጡ...

በጋዜጣዉ ሪፓርተር - November 9, 2022

እኔ ምልህ፡፡ አቤት ክቡር ሚኒስትር? የሰሜኑ ተዋጊዎች ከሠራዊታችን ጋር መቀራረብ ጀመሩ የሚባለው እውነት ነው? አዎ። እውነት ነው ክቡር ሚኒስትር። ከማንም ትዕዛዝ ሳይጠብቁ ነው ከእኛ ሠራዊት ጋር መቀላቀል ጀመሩ...

የሰላም ስምምነቱ ቀጣይ ሒደቶች

ዮናስ አማረ - November 9, 2022

ሁለት ዓመታት ያስቆጠረው ‹‹የሰሜን ኢትዮጵያ ጦርነት መቼ ነው የሚያበቃው?›› ተብሎ የብዙዎች መነጋገሪያ ሆኖ ነበር የሰነበተው፡፡ የሰላም ፍንጭ ታየ እየተባለ በርካታ ግምቶች ቢኖሩም፣ ጠብ ያለ...

የዘመን ባንክ ጠቅላላ ጉባዔ የባንኩን ካፒታል ወደ 15 ቢሊዮን ብር ለማሳደግ ወሰነ

ዳዊት ታዬ - November 9, 2022

የዘመን ባንክ ጠቅላላ ጉባዔ የባንኩን ካፒታል ወደ 15 ቢሊዮን ብር ለማሳደግ በባንኩ ዳይሬክተሮች ቦርድ የቀረበውን ሐሳብ ተቀብሎ አፀደቀ። የባንኩ ባለአክሲዮኖች ይህንን ውሳኔ ያሳለፉት ባለፈው ቅዳሜ...

አልሳም ግሩፕ ‹‹አልሳም መንደር›› የተሰኘ የመኖሪያ መንደር ለመገንባት የመሠረት ድንጋይ አኖረ

ዳዊት ታዬ - November 9, 2022

አልሳም ግሩፕ በአዲስ አበባ ከተማ ያለውን ከፍተኛ የመኖሪያ ቤት ፍላጎት መንግሥት ባስቀመጠው የመንግሥትና የግል ትበብር መርህ መሠረት ለማሟላት በከተማዋ ‹‹አልሳም መንደር›› በሚል መጠሪያ የሪል...

ወደን ሳይሆን ተገደን!

በጋዜጣዉ ሪፓርተር - November 9, 2022

እነሆ ከመገናኛ ወደ ወሰን ልንጓዝ ነው። የጥርጣሬ ዘር የተዘራበት ጎዳና በከንቱ ያገለማምጠናል። ከፍቅራችን በፊት አለመተማመናችን እየቀደመብን ተቸግረናል። ይህ ይሆንብን ዘንድ የወጠነብን ማን መሆኑ ዘወትር...

የሰላም ስምምነቱ ወሳኝ አንኳር ነጥቦች!

አንባቢ - November 9, 2022

በሲሳይ መንግሥቴ አዲሱ (ዶ/ር) መግቢያ አሥር ገጽ ከሚሆነው የሰላም ስምምነት ሰነዱ ውስጥ በዋነኛነት አንቀጽ 2፣ አንቀጽ 6፣ አንቀጽ 7 እና አንቀጽ 10 በጣም ጠቃሚ ሐሳቦችን የያዙ...

ምን እየሰሩ ነው?

‹‹ኅብረተሰቡ አስፈሪ ብሎ የፈረጃቸውን ልጆች በመደገፍ ውጤታማ መሆን እንደሚችሉ እያሳየን ነው›› የቢቢአር ኤፍ የውባንቺ...

ምሕረት ሞገስ - November 9, 2022

የብለ ብሎ ሩዥ ፋውንዴሽን (ቢቢአር ኤፍ) በሕጋዊ መንገድ ከመመዝገቡ ከአራት ዓመታት በፊት አገልግሎት የሚሰጡት በበጎ ፈቃደኝነት ነበር፡፡ ለውባንቺ ፕሮጀክት መከፈት ምክንያት የሆነውም እነሱ በበጎ...

ማኅበራዊ

‹‹ኢትዮጵያ ምን አጥታ ተቸገረች?››

ታደሰ ገብረማርያም - November 9, 2022

‹‹ኢትዮጵያ ምን አጥታ ተቸገረች?›› በሚል ርዕስ በአቶ አሰፋ አደፍርስ ለሕትመት የበቃው ታሪክ ቀመስ መጽሐፍ ጥቅምት 26 ቀን 2015 ዓ.ም. ተመርቆ ገበያ ላይ ውሏል፡፡ ደራሲው እንደተናገሩት፣...

በማደግ ላይ ያሉ አገሮች ጥቅም እንዲጠበቅ ጥሪ የቀረበበት የአየር ንብረት ለውጥ ጉባዔ

ምሕረት ሞገስ - November 9, 2022

ዓለም በተለያዩ ችግሮችና ቀውሶች ተወጥራለች፡፡ በሩሲያና ዩክሬን መካከል እየተደረገ ያለው ጦርነት የፈጠረው የኑሮ ውድነት፣ የኮቪድ-19 ወረርሽኝ ጥሎት የሄደው አሉታዊ ተፅዕኖ እንዲሁም የዓለም መንግሥታት ትኩረት...

ማኅበራዊ

በትግራይ የተለያዩ አካባቢዎች ሰብዓዊ ዕርዳታ መቅረብ መጀመሩ ተገለጸ

ሔለን ተስፋዬ - November 9, 2022

በትግራይ ክልል ሽሬ፣ አክሱም፣ ሽራሮና በሌሎች ቦታዎች አስቸኳይ የምግብ ዕርዳታ እያቀረበ መሆኑን የኢትዮጵያ አደጋ ሥጋት ሥራ አመራር ኮሚሽን አስታወቀ፡፡ የኮሚሽኑ የሕዝብ ግንኙነት ዳይሬክተር አቶ ደበበ...

Ethiopian Reporter, Political, Kibir Minister, Editorial….

Ethiopia Country Report Context

Key changes and developments in the newspaper marketplace in the past five years

According to the Ministry of Information, there were 68 newspapers and magazines published and distributed in July 2006. This is an increase from five years ago (though figures for 2000 could not be found). There are 56 newspapers and 12 magazines. Most papers are weeklies, bi-weeklies and monthlies, with only three dailies, all national, in existence. Many of the new papers in recent years have been tabloid weeklies responding to news events, such as the 2005 elections. However, some of these papers disappear when there are no strong news events to cover.

Newspaper in Ethiopia

Daily

Twice a week Weekly

Every two weeks Monthly

Source: Ministry of Information, personal communication, August 2006

The newspaper sector is limited by the country’s low literacy rates, and most titles are said to have small print runs of only about 3,000 copies. At the time of writing this report, no data could be sourced on the percentage of the adult population that reads a newspaper.

At national level, there are three daily newspapers (see Figure 8). The three national dailies are Addis Zemen (Amharic), The Ethiopian Herald (English) and the Monitor (English). The Monitor is the only private-owned daily. There is no information available to distinguish whether the remaining 53 newspapers are national or regional papers.

There are 12 national magazines; 10 published monthly, two published every two months, and two published quarterly. Ten of these magazines are in the Amharic language, and two are published in English, a monthly and a bi-monthly (Ministry of Information, personal communication, August 2006).

7.2 Investment and growth in newspapers in the past five years

There has been a significant increase in the number of papers in the past five years, with new privately-owned papers leading this growth.

However it is difficult to comment on the exact size of the newspaper market, as there is no research available in this area. Anecdotally, however, there was evidence of high demand for private papers during the May 2005 election period, but with a contraction in the number of private papers after the election.

Only a few of the newspapers, such as The Reporter (with Amharic and English editions, owned by the Media Communication Centre) and Addis Admass (in Amharic) are backed by strong private investment. Some papers have folded after not being strong enough to withstand challenges pertaining to legal or other matters. Some complain about delays in getting permits due to delay in finalisation of the provisions of the new Press Law. Another barrier to newspaper sector growth, according to the International Press Institute (IPI, 2005), has been the banning of some newspapers and the detention of journalists following the unrest after the May 2005 elections.

There is a state-owned news agency, Ethiopian News Agency, and a private local one, Walta Information Centre, both of which mainly serve the state media. Walta Information Centre is owned by the ruling party (EPRDF), so is categorised as state-owned in Figure 9. The private media do not have arrangements with these news agencies to provide them with the content they require, and this remains a major challenge for the private media. The other five news agencies operating in the country, such as Reuters and AFP, are all international.

State or government-owned/backed

Plurality, ownership and control

The private newspaper sector in Ethiopia is still very young and, because of lack of transparency around ownership, it is not known whether ownership is diverse or concentrated in a few hands. However, Kifle Mulat, president of the EFJA, states that all newspapers are under censorship and all are pro-government and controlled by the government (directly or indirectly) (K. Mulat, private communication, 1 September 2006). There is strong opposition to this view, however, from one Ethiopian editor and publisher, Mr Amare Aregawi, who argues that there is no censorship in the country because it is unconstitutional and illegal for the government to practice it.

The Minister of Information states that of the 56 newspapers currently being published, six are government-owned and 32 are privately-owned. The remaining papers are owned by Religious Organisations (8), Associations (6), Political Parties (3) and NGOs (1).

Of the 12 magazines published, 11 are privately-owned, while one is owned by a religious organisation (Ministry of Information, personal communication, August 2006).

Figure 10 below lists the 10 most-read newspapers. These papers can be classified into state, private and party papers. Addis Zemen is a daily state paper. Netsanet, Addis Admas, Ethiop, Askual, Minilik and Ethiosport are private weeklies. Party weekly papers include Oromiya, Abyotawi Dimkrasi and Woyin.

The number of newspaper readers is generally thought to be quite low, and there could be several reasons for this. First, it is possible that the culture of reading has not been properly cultivated, despite the fact that literacy has been increasing over the past few years. Another possible reason is that, in the case of the private newspapers, they cannot afford to distribute beyond the capital Addis Ababa, due to both financial and infrastructural constraints.

Newspaper Netsanet Oromiya

Abiotawi Democracy

Addis Admas Ethiop Asmat Minilik

Addis Zemen Woyin Ethiosport

Percentage

Source: Ministry of Information, personal communication, August 2006

7.4 Diversity

The past five years has seen an increase in the plurality of ideas found in newspapers. For instance, there is frequent newspaper coverage of women’s and religious issues, with some papers even published by religious institutions. Private newspapers provide more entertainment coverage than the government ones do.

The majority of the newspapers are in the Amharic language (33), and the second most common language is English (14). There are also several bi-lingual newspapers, publishing in both Amharic and English (5), and there is one newspaper that publishes in Amharic, English and French. There are also newspapers written in Oromifa (2), Tigrinya (1) and Arabic (1). (Ministry of Information, personal communication, August 2006). One interviewee expressed the need for further objective research to obtain more accurate data on readership.

7.5 Quality of newspaper reporting

With the great increase in the number of papers, there has also been an increase in journalistic work. The quality of journalism is highly uneven. Whilst some commentators describe work as lacking in ethics, independence and professionalism, others assert that concerted efforts are being made by journalists to improve standards in the sector.

7.6 Specific challenges

Challenges faced by newspapers in Ethiopia include low reading levels, the high cost of distribution outside the capital Addis Ababa, and a lack of professional journalists.

Key findings

The past five years have seen increased private sector participation in the press sector, but many of the private papers are not financially strong.

The largest group of publications is the national weeklies.

The panoply of challenges facing Ethiopia and its people show no sign of respite. Though active hostilities in the northern part of the country, have almost stopped after the forces of Tigray People’s Liberation Front (TPLF) were pushed back to Tigray from most of the territories they had captured in the adjoining Amhara and Afar regions, the security situation in a number of areas of the nation is fragile owing to the interminable endless cycle of violence that has been racking them for years now. Aside from the death of tens of thousands and the displacement of millions frequent outbreaks of internecine conflicts have led to, the unchecked rise in extremist attitudes, the cost of living, corruption, and land grabbing, among others, have made life an ordeal for the vast majority of Ethiopians. It’s in this backdrop that an incident, whose fallout could potentially plunge Ethiopia into a crisis of catastrophic proportions, recently took place.

On March 29 at least 26 people were killed and several more injured in clashes between armed groups hailing from the Minjar Shenkora Woreda of North Shewa Zone, Amhara regional state, and local militia in the bordering Fentalle woreda, East Shewa Zone of Oromia regional state. The blame game began soon thereafter with both sides issuing conflicting a slew of contradicting statements regarding the incident. Amhara region officials lay the blame on “anti-peace groups” whom they accused of perpetrating the attack. Their counterparts from the Oromia region though disputed the accusation, blaming the attack on “extremist forces operating in the Amhara region”. They also took these forces to task for displacing people and looting property in other woredas of Oromia bordering the Amhara region. It’s surprising that both the federal government and the ruling Prosperity Party (PP) have not made any overt attempt to defuse the tension between the Amhara and Oromia regional administrations even as both escalate the war of words among them.

Ethiopia is a nation that continues to be on the wrong side of the global digital divide. Only a fifth of its over 110 million people have Internet access that is expensive and often unreliable. In cognizance of the imperative to tackle the multi-faceted challenges this poses the government has embarked on liberalizing the telecom sector and adopted Digital Ethiopia 2025— a digital transformation strategy described by the government as a visionary strategy that serves as a blueprint for different sectors and institutions—as it tries to position the country competitive in the brave new digital world. Efforts to open up the telecom industry have had limited success with one international consortium awarded a license to operate telecom services in the country so far while plans to sell 45 percent of the state-owned telecoms monopoly to international buyers have been repeatedly pushed back. Meanwhile, a number of public services have begun to benefit from Digital 2025 through developments like e-government, digital ID, the national payment system, online trade registration and licensing system, electronic single-window customs clearance and electronic tax filing.

As the government ramps up its roll out of various services aligned with the digital transformation strategy, the suspension by the National Bank of Ethiopia (NBE) of digital remittance platforms, namely CashGo and MamaPay, the Bank of Abyssinia (BoA) uses has caused a furore, leading many to question whether the central bank is on the same page as the government in the latter’s quest to create an inclusive digital economy through the national digital strategy. CashGo is an international money transfer system which allows anyone abroad to transfer funds in the local currency to accounts maintained at BoA while MamaPays allows users to request payment from remitters or payment to be settled on behalf of a third party. The reasons cited by NBE to justify its decision are varied. It says both BoA and the developers of the applications behind the platforms do not possess a valid license permitting them to provide remittance services. It also alleges that the applications enable BoA to avail travelers foreign exchange through credit cards in disregard of its regulatory mandate over currency management. The regulator further raised the need to address safety and security concerns, particularly relating to privacy breaches, and ensure that local fintech companies survive the inevitable competition from foreign rivals via a major initiative currently in the works.

The developers of the applications, however, refute the points mentioned by the central bank. They argue that they are authorized fintech companies engaged in developing applications and as such do not require to have a remittance license, adding the applications were vetted by the NBE and the Information Network Security Agency before they were integrated into BoA’s system. They also suspect that foul play may be involved, saying some of the remittance companies active in the Ethiopian market probably conspired with regulators at NBE to close them down because the country would save up to USD 800 million it annually lost to them through steep service charges and redirection of the forex they receive to informal channels. Moreover, they point out that NBE’s compliance and safety concerns could have been worked out while the applications were still running.

While NBE may have grounds it deems legitimate and warrants the suspension of the operation of the digital remittance platforms, its decision is heavy-handed and lacks foresight. In the first place, it did not hold formal consultations on the matter with all the stakeholders involved. If it had demonstrated the willingness to engage them constructively, the dispute between the parties could have been amicably solved. The decision also discourages fintech companies from investing in the development of platforms that help Ethiopia bridge the digital divide. The Digital 2025 strategy aspires to transform Ethiopia’s digital landscape to accomplish such lofty goals as playing a vital role for inclusive prosperity; innovating and applying the culture, practices, processes and technologies of the digital era to respond to citizens raised expectations. The realization of the strategy requires, among others, the collaboration and commitment of everyone including government, non-governmental, development partners and societies as well as a robust commitment to increase infrastructure and put in place an enabling ecosystem. If the government is to succeed in pushing the country through digitalization and making it a viable investment depends on its dedication to reforming the bureaucracy, implementing the right regulation and creating credible institutions. As Prime Minister Abiy Ahmed (PhD) once said leveraging digital opportunities demands a new mindset and leadership style. Leaders at the central bank must take this advice to heart and adapt to the new digital environment.

The feuding between officials heading two branches of the ruling party cannot be confined to them given the party is still ethno-centric despite claiming to be a national party. In fact it has led to spats among major opposition parties active in the respective regions and social media activists, which are spewing a hateful rhetoric that could very well pit the Oromo and Amhara people, the two largest ethnic groups in Ethiopia, in a bloody conflict. The consequences of such a conflict are too horrible to contemplate. From a protracted and destructive civil war in which no side emerges victorious to a total state collapse all the scenarios facing the nation are lose-lose not only for its citizens, but also the Horn of Africa and beyond. It’s not entirely clear whether the protagonists to the ongoing verbal warfare realize that their actions are liable to lead to Ethiopia’s unraveling or are indifferent to the ensuing heavy price.

With three decades of experience in the banking industry, Mulugeta Asmare is known for his successful years at the Bank of Abyssinia. During his five year tenure as the president of the Bank until 2019, the Bank’s profit doubled to over half a billion birr, while its paid-up capital skyrocketed from a little less than one billion birr to 2.5 billion birr.

Last year, he was appointed as the president of Goh Bank, the first self-proclaimed mortgage bank in Ethiopia. The Reporter’s Selamawit Mengesha sat down with Mulugeta to learn about his new journey at Goh and his insights in the banking industry. Excerpts:

The Reporter: Tell us about your experience in the banking industry.

Mulugeta Asmare: I have been working in the bank industry for the past 31 years. I have an all-round experience in the banking industry, meaning I had started work in the banking sector as a clerk and have now reached the position of general manager. I have worked as deputy president of Abyssinia Bank for four years-and-a-half until 2019. I believe that I was able to make a lot of reforms and changes while working at Abyssinia Bank. I was faced with a lot of challenges while working at this bank, since it had a lot of shortcomings at the time.

I believe that I have contributed a lot towards the betterment of the banking system at Abyssinia Bank, for it to get to the stage that it is in now. We started off by inviting global market leaders like Deloitte, PWC, KPMG, and Ernest & Young to participate in a bid to frame a five-year strategy for the bank. Winning the bid, Ernest & Young have done a remarkable job in improving our system-wide operations. We used to have such work done by in-house experts. So, this is the first time that we enlisted the services of a globally renowned company. We have focused on manpower development and raising pay, measures that have surely contributed to the development of the bank.

Following my previous stint with Abyssinia Bank, I used to focus on private contractual jobs here and there. I was informed of this new concept of establishing a mortgage bank system which was unique and different, and it got my attention. After establishing the bank and selling the shares and raising enough capital to establish the bank, we couldn’t find the right person to run it. The 11 founding members are well-known business professionals that have worked for years in the banking system, and they wanted me to take the role. I couldn’t say no to such noted personalities as former National Bank President Getahun Nana.

Before delving into the mortgage bank, I would like to raise a question regarding saving. Most people open bank accounts for saving purposes while few dare to ask for loans. Why do you think that is the case?

The major mission of a bank is to help develop the culture of saving. It is evident that once there is a saving, the next step is to provide a loan. Without savings, there are no loans. Customers can resort to saving for they have some future plans to invest or to purchase something, or it can just be a leftover from their monthly expenses. This saving is directly forwarded to producers and service providers who are planning to expand a business, or who are looking forward to enter into new business ventures. The main job of a bank is to act as an intermediary between the depositor and the borrower.

Banks have advanced and sophisticated role nowadays compared to the old times. I believe that low-scale savings at the banks is the main reason for the small number of loans. The loans are mostly provided to customers that have a convincing project idea with a guaranteed profit. You don’t find such projects every day, not everyone can be a producer, a service provider or a farmer. Banks have a limited access to capital and deposit, which is the reason for setting strict criteria. These are some of the reasons for having more savings while there are less loans being provided.

The last three years have seen a remarkable change in the banking sector. The number of private banks has increased to 23, including Goh Betoch Bank, which is managed by you, and an interesting enterprise at that. Why do you think private banks are increasing at such a pace? Is it because the banking industry is profitable?

It is obvious that the banking industry is becoming more profitable today than ever. All banks are recording a profit since the market demands such service. Even though our economy is underdeveloped, the banking sector is essential to reach the population that is not getting access to the service. Until recently, only 25 percent of the population was banked. But that is changing thanks to the increasing number of banks and the opening of branches in the regions. This shows that the market is still untapped. That being said, the capital requirement to establish a bank is also increasing drastically. The set of criteria laid down by the National Bank is complex. Therefore, I don’t believe that we have banks mushrooming left and right. For a population of 110 million, the number of banks we have is far from enough. I think the main challenge for potential new banks forming is the rules set by the central bank. Allowing specialized banks to open branches in the country is not yet a trend but it’s a must. We have paved the way as a mortgage bank but there can be many others that specialize in farming, industry, housing, import and export, etc.

Goh Bank specializes in the housing sector. I’m sure you’ve conducted a thorough research before establishing the bank, including the case of the then Construction and Business Bank. What is the sustainability plan?

The Construction and Business Bank has its own flaws. During the reign of the Derg, it was taken over by the government and it was functioning under the name of Housing and Savings Bank, the only service provider specializing in mortgage banking. It was later on transformed into a commercial banking system and was named as “Construction and Business Bank.” Keep in mind that both the Constriction and Business Bank and Commercial Bank were providing the same traditional banking service under a different name. The bank didn’t have enough capital. Therefore, it has struggled to keep in the same pace as private banks. The Construction and Business Bank later on merged with the Commercial Bank since it couldn’t stand on its own. This has caused a gap in the mortgage banking system. It provides a service that is in high demand. That is the main reason for establishing the Goh Betoch Bank with a view to addressing the problem. A lot of customers have savings in their account that is not enough to purchase a house without bank financing. These people can opt to switch funds used to rent a house in favor of mortgage payments.

Does the bank provide mortgage service or does it focus on commercial services?

The bank purely provides mortgage services. It is also registered with the national bank as a provider of mortgage services. We are the first bank in Ethiopia to offer this service. We have done rigorous feasibility studies. We haven’t provided any commercial loans to businesses. We only give loans to customers who want to buy a house.

Is there a push from the government to make the service partially commercial?

Actually, we are the ones pushing. That is since the country doesn’t have laws regulating such a specialized banking system. According to the law in the books, all banks are treated equally, be they private or government. But we are demanding a special treatment, and the national bank has lately been cognizant of this fact.

Do you cater to folks lower in the socio-economic ladder, and can you also reflect on the high cost of housing in Ethiopia?

It would take days to discuss issues regarding housing. In Ethiopia, there are many programs that were drafted in order to provide solution to these problems. For instance, the Integrated Housing Development Program was developed by the government in 1997. This condominium-housing project was later on developed into the ‘40/60’ housing. The idea was to construct a lot of housing units and help the general public own their house. A mere 400,000 housing units have so far been built. Many Ethiopians have been into the culture of housing saving schemes for years now. There is a study indicating that 400,000 housing units needed to be built every year in order to meet demand in Ethiopia. Specifically, 100,000 housing units should be constructed in Addis Ababa every year, but a tenth of that is being accomplished.

What is more, the already existing houses in Ethiopia do not meet habitat standards established by the United Nations. Based on this requirement, around 74 percent of the housing units in Addis Ababa need to be reconstructed since they do not meet the standard. The main reason for the soaring price of houses is the ever rising cost of land as well as construction materials. The paucity of hard currency coupled with unbridled inflation has worsened the situation. The current going rate for a housing unit is beyond the reach of middle and lower income citizens.

According to our study, medium income is 30,000 and up, way below the threshold to afford buying a new house. We should also look into our construction system that is backward and traditional. It takes two to three years to build a house. Time is essential; we should be able to construct houses in one year. If we want housing to be affordable, we should look into ways of cutting down the price of land and construction inputs as well as employing modern technology. Financing should also be factored in, and this is where we come in.

Apart from huge outlays by private banks, the government is also spending 50 to 60 million birr to construct condominiums. These houses are designed to be affordable to low-income people, but that’s not the case. How does your bank intend to make housing affordable to middle- or low-income citizens?

The housing problem can’t be solved only by private banks. The main role should be played by the government since having shelter is a human right. The government being a responsible body should provide land at a lower price or for free to the lower and medium income people. What’s more, the government should regulate the price of construction materials besides encouraging their ample supply. Banks as financers should also expedite provision of capital in the form of loans.

Most banks are reluctant to engage in mortgage banking. How come you chose it?

We dared to join the banking sector, especially mortgage financing, because of the need for one on the market. Our shareholders took the initiative to establish a huge institution that can support the country’s economy. The realty on the ground in Ethiopia is such that a 40-year-old individual lives with his or her parents. This is so due to the dearth of financing schemes to own one’s house. Therefore, we are trying to help individuals with limited means.

What is the plan this year as regards providing mortgage loans for customers?

We have started business since October 25. We haven’t provided much service because we just launched our bank a few months ago. But we are planning to provide one billion birr in loans until the end of the year. Based on the outlook of the economy, this might not be attainable, but that’s the plan.

How much would that be per client?

It depends on the customer. Some might take a 10 million-birr loan while others ask for more. Anyways, we are planning to provide 1 billion birr in loans until the end of this year. While framing this plan, we were under the impression that we can go around the country and find deposits, but there were many unforeseen events such as the war that disrupted the economy. Therefore, we might not be able to meet the target.

So there is no plan to provide this service to other regions?

We will cover other regions as well. We might not have many branches like other banks but being a mortgage bank, we are going to employ technology to scale up services. The main branch is in Addis Ababa while the second branch is in Dire Dawa and the third branch is around Lebu. The fourth branch in the CMC area goes online this month. We serve cities that have a high housing demand such as Hawassa, Adama, Bahir Dar,Gonder and Mekelle.

What do you think of foreign banks establishing mortgage banks in Ethiopia? How would they affect the already existing mortgage market?

Although I’m aware that foreign banks are joining, the timeline is not yet announced. A healthy competition is not bad; I don’t believe that they will take over the banking business instantly. The government will surely have some sort of plan in order to institute a gradual change. Some requirements might also be in order such as a fixed amount of capital. They should purchase shares to be able to establish a bank in Ethiopia. For instance, if a foreign bank buys 30 to 40 percent share from a private bank, then it will be perfect since they can invest in human-resource development and bring in capital for the existing bank.

Mortgage bank is no different from other private banks; I believe that foreign banks can help a lot since there is an untapped market. We can assist them in expediting the process of setting up shop. If foreign banks buy shares from us, then they can avoid that hustle. We would like the competition, although we are not sure when they can come to the market; we are preparing psychologically to work with them.

Can you briefly explain what it takes to get mortgage?

Those who seek loan at our bank, we welcome them all. We have started giving service for most customers now. It is required for the customer to save a minimum of 20 percent of the selling price of the house at our bank. And then, we can provide the remainder 80 percent. The other unique system is that we will provide 30 years grace period for paying the loan back to the bank. Our interest rate is lower than other banks’. For instance, Commercial Bank provides loans at 15 to 26 percent rate while we can provide loans for less. Our interest rate is flexible depending on the currency and frequency that a customer would return the loan. This makes us unique.

Customers can’t knock on any private bank and ask for a loan to purchase a house. Most banks provide a mortgage service to their employees, or for selected VIP customers that pay in foreign currency such as embassies, NGOs and exporting companies. We only require that a customer has a fixed monthly salary and that he or she can pay the loan back at the provided timeline. There’s also no need for any collateral since we use the house that will be purchased as collateral by itself. We are trying to reach the public with this information to mitigate the housing problem.

Since the public is very eager to get this service, what can we expect from your bank?

We would like to pass the message that any customer that has the financial means and the interest to purchase or construct a house, we are eager to help. Come to our bank, open a bank account and save the minimum amount of money required for purchasing the house that you want to have. We will advise you on the best option. We are also planning to construct houses by ourselves.

With three decades of experience in the banking industry, Mulugeta Asmare is known for his successful years at the Bank of Abyssinia. During his five year tenure as the president of the Bank until 2019, the Bank’s profit doubled to over half a billion birr, while its paid-up capital skyrocketed from a little less than one billion birr to 2.5 billion birr.

Last year, he was appointed as the president of Goh Bank, the first self-proclaimed mortgage bank in Ethiopia. The Reporter’s Selamawit Mengesha sat down with Mulugeta to learn about his new journey at Goh and his insights in the banking industry. Excerpts:

The Reporter: Tell us about your experience in the banking industry.

Mulugeta Asmare: I have been working in the bank industry for the past 31 years. I have an all-round experience in the banking industry, meaning I had started work in the banking sector as a clerk and have now reached the position of general manager. I have worked as deputy president of Abyssinia Bank for four years-and-a-half until 2019. I believe that I was able to make a lot of reforms and changes while working at Abyssinia Bank. I was faced with a lot of challenges while working at this bank, since it had a lot of shortcomings at the time.

I believe that I have contributed a lot towards the betterment of the banking system at Abyssinia Bank, for it to get to the stage that it is in now. We started off by inviting global market leaders like Deloitte, PWC, KPMG, and Ernest & Young to participate in a bid to frame a five-year strategy for the bank. Winning the bid, Ernest & Young have done a remarkable job in improving our system-wide operations. We used to have such work done by in-house experts. So, this is the first time that we enlisted the services of a globally renowned company. We have focused on manpower development and raising pay, measures that have surely contributed to the development of the bank.

Following my previous stint with Abyssinia Bank, I used to focus on private contractual jobs here and there. I was informed of this new concept of establishing a mortgage bank system which was unique and different, and it got my attention. After establishing the bank and selling the shares and raising enough capital to establish the bank, we couldn’t find the right person to run it. The 11 founding members are well-known business professionals that have worked for years in the banking system, and they wanted me to take the role. I couldn’t say no to such noted personalities as former National Bank President Getahun Nana.

Before delving into the mortgage bank, I would like to raise a question regarding saving. Most people open bank accounts for saving purposes while few dare to ask for loans. Why do you think that is the case?

The major mission of a bank is to help develop the culture of saving. It is evident that once there is a saving, the next step is to provide a loan. Without savings, there are no loans. Customers can resort to saving for they have some future plans to invest or to purchase something, or it can just be a leftover from their monthly expenses. This saving is directly forwarded to producers and service providers who are planning to expand a business, or who are looking forward to enter into new business ventures. The main job of a bank is to act as an intermediary between the depositor and the borrower.

Banks have advanced and sophisticated role nowadays compared to the old times. I believe that low-scale savings at the banks is the main reason for the small number of loans. The loans are mostly provided to customers that have a convincing project idea with a guaranteed profit. You don’t find such projects every day, not everyone can be a producer, a service provider or a farmer. Banks have a limited access to capital and deposit, which is the reason for setting strict criteria. These are some of the reasons for having more savings while there are less loans being provided.

The last three years have seen a remarkable change in the banking sector. The number of private banks has increased to 23, including Goh Betoch Bank, which is managed by you, and an interesting enterprise at that. Why do you think private banks are increasing at such a pace? Is it because the banking industry is profitable?

It is obvious that the banking industry is becoming more profitable today than ever. All banks are recording a profit since the market demands such service. Even though our economy is underdeveloped, the banking sector is essential to reach the population that is not getting access to the service. Until recently, only 25 percent of the population was banked. But that is changing thanks to the increasing number of banks and the opening of branches in the regions. This shows that the market is still untapped. That being said, the capital requirement to establish a bank is also increasing drastically. The set of criteria laid down by the National Bank is complex. Therefore, I don’t believe that we have banks mushrooming left and right. For a population of 110 million, the number of banks we have is far from enough. I think the main challenge for potential new banks forming is the rules set by the central bank. Allowing specialized banks to open branches in the country is not yet a trend but it’s a must. We have paved the way as a mortgage bank but there can be many others that specialize in farming, industry, housing, import and export, etc.

Goh Bank specializes in the housing sector. I’m sure you’ve conducted a thorough research before establishing the bank, including the case of the then Construction and Business Bank. What is the sustainability plan?

The Construction and Business Bank has its own flaws. During the reign of the Derg, it was taken over by the government and it was functioning under the name of Housing and Savings Bank, the only service provider specializing in mortgage banking. It was later on transformed into a commercial banking system and was named as “Construction and Business Bank.” Keep in mind that both the Constriction and Business Bank and Commercial Bank were providing the same traditional banking service under a different name. The bank didn’t have enough capital. Therefore, it has struggled to keep in the same pace as private banks. The Construction and Business Bank later on merged with the Commercial Bank since it couldn’t stand on its own. This has caused a gap in the mortgage banking system. It provides a service that is in high demand. That is the main reason for establishing the Goh Betoch Bank with a view to addressing the problem. A lot of customers have savings in their account that is not enough to purchase a house without bank financing. These people can opt to switch funds used to rent a house in favor of mortgage payments.

Does the bank provide mortgage service or does it focus on commercial services?

The bank purely provides mortgage services. It is also registered with the national bank as a provider of mortgage services. We are the first bank in Ethiopia to offer this service. We have done rigorous feasibility studies. We haven’t provided any commercial loans to businesses. We only give loans to customers who want to buy a house.

Is there a push from the government to make the service partially commercial?

Actually, we are the ones pushing. That is since the country doesn’t have laws regulating such a specialized banking system. According to the law in the books, all banks are treated equally, be they private or government. But we are demanding a special treatment, and the national bank has lately been cognizant of this fact.

Do you cater to folks lower in the socio-economic ladder, and can you also reflect on the high cost of housing in Ethiopia?

It would take days to discuss issues regarding housing. In Ethiopia, there are many programs that were drafted in order to provide solution to these problems. For instance, the Integrated Housing Development Program was developed by the government in 1997. This condominium-housing project was later on developed into the ‘40/60’ housing. The idea was to construct a lot of housing units and help the general public own their house. A mere 400,000 housing units have so far been built. Many Ethiopians have been into the culture of housing saving schemes for years now. There is a study indicating that 400,000 housing units needed to be built every year in order to meet demand in Ethiopia. Specifically, 100,000 housing units should be constructed in Addis Ababa every year, but a tenth of that is being accomplished.

What is more, the already existing houses in Ethiopia do not meet habitat standards established by the United Nations. Based on this requirement, around 74 percent of the housing units in Addis Ababa need to be reconstructed since they do not meet the standard. The main reason for the soaring price of houses is the ever rising cost of land as well as construction materials. The paucity of hard currency coupled with unbridled inflation has worsened the situation. The current going rate for a housing unit is beyond the reach of middle and lower income citizens.

According to our study, medium income is 30,000 and up, way below the threshold to afford buying a new house. We should also look into our construction system that is backward and traditional. It takes two to three years to build a house. Time is essential; we should be able to construct houses in one year. If we want housing to be affordable, we should look into ways of cutting down the price of land and construction inputs as well as employing modern technology. Financing should also be factored in, and this is where we come in.

Apart from huge outlays by private banks, the government is also spending 50 to 60 million birr to construct condominiums. These houses are designed to be affordable to low-income people, but that’s not the case. How does your bank intend to make housing affordable to middle- or low-income citizens?

The housing problem can’t be solved only by private banks. The main role should be played by the government since having shelter is a human right. The government being a responsible body should provide land at a lower price or for free to the lower and medium income people. What’s more, the government should regulate the price of construction materials besides encouraging their ample supply. Banks as financers should also expedite provision of capital in the form of loans.

Most banks are reluctant to engage in mortgage banking. How come you chose it?

We dared to join the banking sector, especially mortgage financing, because of the need for one on the market. Our shareholders took the initiative to establish a huge institution that can support the country’s economy. The realty on the ground in Ethiopia is such that a 40-year-old individual lives with his or her parents. This is so due to the dearth of financing schemes to own one’s house. Therefore, we are trying to help individuals with limited means.

What is the plan this year as regards providing mortgage loans for customers?

We have started business since October 25. We haven’t provided much service because we just launched our bank a few months ago. But we are planning to provide one billion birr in loans until the end of the year. Based on the outlook of the economy, this might not be attainable, but that’s the plan.

How much would that be per client?

It depends on the customer. Some might take a 10 million-birr loan while others ask for more. Anyways, we are planning to provide 1 billion birr in loans until the end of this year. While framing this plan, we were under the impression that we can go around the country and find deposits, but there were many unforeseen events such as the war that disrupted the economy. Therefore, we might not be able to meet the target.

So there is no plan to provide this service to other regions?

We will cover other regions as well. We might not have many branches like other banks but being a mortgage bank, we are going to employ technology to scale up services. The main branch is in Addis Ababa while the second branch is in Dire Dawa and the third branch is around Lebu. The fourth branch in the CMC area goes online this month. We serve cities that have a high housing demand such as Hawassa, Adama, Bahir Dar,Gonder and Mekelle.

What do you think of foreign banks establishing mortgage banks in Ethiopia? How would they affect the already existing mortgage market?

Although I’m aware that foreign banks are joining, the timeline is not yet announced. A healthy competition is not bad; I don’t believe that they will take over the banking business instantly. The government will surely have some sort of plan in order to institute a gradual change. Some requirements might also be in order such as a fixed amount of capital. They should purchase shares to be able to establish a bank in Ethiopia. For instance, if a foreign bank buys 30 to 40 percent share from a private bank, then it will be perfect since they can invest in human-resource development and bring in capital for the existing bank.

Mortgage bank is no different from other private banks; I believe that foreign banks can help a lot since there is an untapped market. We can assist them in expediting the process of setting up shop. If foreign banks buy shares from us, then they can avoid that hustle. We would like the competition, although we are not sure when they can come to the market; we are preparing psychologically to work with them.

Can you briefly explain what it takes to get mortgage?

Those who seek loan at our bank, we welcome them all. We have started giving service for most customers now. It is required for the customer to save a minimum of 20 percent of the selling price of the house at our bank. And then, we can provide the remainder 80 percent. The other unique system is that we will provide 30 years grace period for paying the loan back to the bank. Our interest rate is lower than other banks’. For instance, Commercial Bank provides loans at 15 to 26 percent rate while we can provide loans for less. Our interest rate is flexible depending on the currency and frequency that a customer would return the loan. This makes us unique.

Customers can’t knock on any private bank and ask for a loan to purchase a house. Most banks provide a mortgage service to their employees, or for selected VIP customers that pay in foreign currency such as embassies, NGOs and exporting companies. We only require that a customer has a fixed monthly salary and that he or she can pay the loan back at the provided timeline. There’s also no need for any collateral since we use the house that will be purchased as collateral by itself. We are trying to reach the public with this information to mitigate the housing problem.

Since the public is very eager to get this service, what can we expect from your bank?

We would like to pass the message that any customer that has the financial means and the interest to purchase or construct a house, we are eager to help. Come to our bank, open a bank account and save the minimum amount of money required for purchasing the house that you want to have. We will advise you on the best option. We are also planning to construct houses by ourselves.

Shewit Emanuel is the current country director of Farm Africa, an international NGO established 35 years ago. It started out in Kenya but has branched out to Ethiopia, Uganda, Tanzania and the DRC.

Active in majority of eastern African countries, it is a specialized NGO focusing on natural resource management and business development linked to agriculture including livestock. Yosthena Aynalem of The Reporter sat down with Shewit to discuss smart agriculture in Ethiopia. Excerpts:

The Reporter: In a country where agriculture dominates, what would you say you have achieved thus far?

Shewit Emanuel: In a nutshell, one of the biggest achievements so far is that we exclusively work with smallholder farmers. What we are trying to do is to ultimately enable them to move out from poverty and become a commercial farmer who is self-sufficient.

Developing methodologies that are sustainable, inclusive and impactful is also one of our achievements. That’s our own target at the end of the day, when we leave, we want to make sure the work continues and the farmers continue to thrive with the support that we have started.

We operate all over Ethiopia. Unfortunately, some of the projects have ended in some regions, but we have footprints across all the regions within Ethiopia. The biggest achievement starts from increasing the income of the smallholder farmers we supported to reducing deforestation as well as supporting Ethiopia sell carbon credit to the international market. That is actually the newest achievement. We have also supported farmers to sell coffee directly to international markets.

Since vertical intégration is allowed now, farmers don’t have to go to the Ethiopian Ccommodities Exchange (ECX) anymore. If you can connect them with exporters, they can directly sell to the international market. The whole point is to reduce the middle men for the farmers and get the fairest prices for them.

Food insecurity is a recurring problem in Ethiopia and Africa. Many approaches have been applied to reduce food insecurity but nothing seems to avert it thus far. Is there any approach you have tried that is poised to be successful?

Nowadays, everybody’s moving into climate smart agriculture and unless all your interventions are becoming climate smart, you are bound to go back to that vicious cycle of droughts and flooding; which is both damaging to farmers. So, making sure farmers practice climate smart agriculture is the number one thing that we are working on.

One of the things that Farm Africa is actually pioneering and becoming innovative and a champion of is the use of integrated landscape management. This means to look at the challenge holistically, you cannot talk about conservation of land without talking about the livelihood of the people.

The majority of past projects, if you look at them, are about conservation without addressing why the community is damaging the environment? Unless you tackle that, you are not going to sustain it and all your efforts will be for nothing.

It also has to be inclusive of everybody. Most of the time, when a project starts, they focus on the direct beneficiaries. Let me give you a good example. One of our biggest projects is in Bale Eco region, where we’ve been operating since 2016. Initially, we were focusing on the regions communities and when the current drought occurred, the lowland communities came looking for water and resources towards the forest. So, all the conservation that we made, all the protection of the forest become under threat.

So, what we tried to do is expand our support, with the support from the Norwegians and other likeminded donors. It is not just the highland communities, but the lowlands are also included now. We have somewhat built resilience so that they don’t have to come to the forest.

And to be fair, even though 1.6 million people live within Bale, as direct beneficiaries, 12 million people depend directly on the forest. So, to address their need, everything from livestock fodder and irrigation is being provided, moving them into climate smart agriculture to become sustainable. They then become the protectors of the forest themselves, becoming part of the solution.

The approach we advocate for is an integrated landscape management where you can make your intervention impactful, sustainable and more importantly, inclusive of everybody, including women, pastoralists and nomads.

Does Farm Africa give lessons to these people or just resources?

Not exactly. When I say climate smart agriculture, there are different kinds of approaches that we use. Starting from the training itself such as when to plant, how to plant and what type to plant, and everything that has to do with linking farmers is included.

It could be providing improved seeds or making sure that they move to organic fertilizers or connect them to the local market. The majority of farmers’ problem is linkage; they just need to be connected with the agro-dealers so they can get the seed, fertilizers, and safe deliver of their harvests to the market. And once they produce, they can aggregate it and sell it at a good price.

We also support the enabling environment, which means working with the government to make sure that the necessary policies and protection are there. At the end of the day, we need to build the capacity of the government. They are the ones we are making sure we align with, since they will take it forward. We can show it on a small scale for the government to expand it at a larger scale.

The climate smart market systems project in Amhara region that we piloted, is now being rolled out to all over Ethiopia, modified depending on the region and soil conditions. The value chain may be different, but in terms of supporting the full spectrum of the value chain, that’s what we do, so that farmers have the right tools and information on a timely basis.

Urban farming is something that is said will reduce food insecurity and that you are doing something along those lines. Can you tell me more about those projects?

Sure. When Farm Africa was actually set up, our attention was exclusively focused on rural farmers, but what has become very clear is that you cannot address the rural challenges if you are not addressing urban challenges.

Urban poverty is on the rise and food insecurity is becoming as critical as those in rural areas.

The government requested us to support them on how to improve urban agriculture. With that, we started to pilot a project in the Ministery of Planning and Development’s compound because they have the space. We have started testing out the pilot phase, trying to look at what urban agriculture looks like, if it is sustainable, and how the farming methodology works.

We are now actually setting up; the clearing has been done and the design has been finalized. We are left with the planting processes, and we hope in the next couple of months to have the first produce available. It’s not just crops we are producing. We are also piloting fish as well as poultry so that everybody can practice it.

If you were to go to rural areas, there is space, you can do horizontal farming, but in urban areas, we don’t have that space. However, vertical agriculture is the answer. We are coming up with new kinds of innovative ways to produce food at a scale that is required to feed the local community. We are working with around 105 households for now, including women and unemployed youth. We just started that this year. So, it’s still at the early stages.

So what can urban settlers do? Like you said, these projects will encourage them, but considering there’s inflation now, there’s even more food insecurity, which is compounded by the war.

That’s why we encourage the use of your back backyard or whatever space you have. It does not require space. What we are trying to show is that you can do this vertical farming. Within a limited space, you can actually produce enough, to feed your family at a lower cost because inflation is becoming an issue. Families are barely feeding themselves, so at least it supplements their food intake and more importantly ensures nutritional balance.

Scholars suggest encouraging farmers to diversify their source of income to fight food insecurity. One of the options is to promote off-farming activities. Is that being implemented? If so, is it working?

Unfortunately, this concerns the lack of knowledge. The diversity is not as much as you would expect it to be. As part of the business development, we exclusively focus on income generating activities that you can do beyond agriculture. You need to diversify.

The coffee producers used to only produce coffee and farm forests. So, instead of farming the forest and cutting down trees, we showed them they can do forest honey, forest coffee, incense and other products, helping them to diversify their income stream.

A lot of the evaluation reports can be shared on, for instance, income. We increased their income by 143 percent. Not only were they able to increase the volume but also the quality. Now, almost all our projects, be it in Bale or Illu Aba Bora, all of them are now 100 percent export quality standard. And by supporting them change into a cooperative, they could buy better machines and so on, to aid in the quality of the product, instead of using traditional means and do less damage to the product. The coffee they produce now has scaled from grade six to grade one.

But you need to provide them the option and training, ranging from the know-how, all the way to even financial literacy. We do a lot of voluntary saving and loans, by setting them up with associations so that they are able to save money and get loans to buy better inputs and be able to negotiate better with dealers.

Ethiopia has been hit by a drought recently and many cattle have died as a result. There are other east African countries going through the same thing, probably in countries Farm Africa is involved in. So why do you think countries like Ethiopia are being affected by these things more often than the rest of the world?

Unfortunately, we are still rainfall dependent and one of the biggest impacts of climate change is making this cycle of drought more frequent than ever before. It used to occur every 10 years or so but now it happens every two or three years.

So, unless we equip both the highland and the lowlands with the necessary climate smart interventions, they will still suffer. We have a huge project in Borena and mobilized fodder to be delivered as an emergency, because the animals are crucial for their livelihoods. I think it was reported to cost more than five million birr.

The second one was to make sure the ecosystem is protected because that generates the water that goes to the lowlands. The intervention here has a huge impact at the lower catchments. That is why you need to make sure your interventions are holistic. Just by protecting the Bale eco region, you protect 12 million people’s livelihood, livestock and food.

The support is not only in providing materials, but to improve small–scale irrigation, pound point constructions and watershed management, to become drought resilient.

Several projects have been implemented by donors and other NGOs that work on resilience, capacity building and the like. But soon after their launch and brief success, they dwindle out. What do you think is happening in the middle? Why does the impact subside quickly?

The problem lies in the projects design. You have to plan to make it sustainable. When we set up a project, we have to prioritize carefully. If you don’t do that, then what happens is you’ll just be replacing one challenge with another and the impact would be temporary.

Our intervention should be as a facilitator, not actors. If you become an actor, then you are disrupting the market. What we are trying to do is to become the catalytic process, by working clearly with the government, like the Ministry of Agriculture and other stakeholders, so that policies do not contradict.

When we set up the project initially, deforestation was very high. Awareness raising and capacity building campaigns were held not only with the government, but also the communities, on why they need the forest, and understanding why the forest was damaged was very critical.

By introducing a specific blend of coffee, which grows under a shade, to farmers, which fetches a higher market price, the community has started to protect the forest by themselves. By giving them ownership and accountability, when you leave, it will not stop.

That is why you have to be very careful and make sure you have addressed the challenges that surround it.

You mentioned traders usually get more money than farmers, and Farm Africa is doing things to help in this aspect. Could you elaborate more on that?

First, you have to improve their yield per hectare because they usually sell it to the local market due to the low yield of crops they harvest. So, increasing the yield per hectare and then the quality is crucial. Empowering and connecting them with the market also helps them know the market value of their products.

women are paid less in the coffee sector, even though they do just as much, if not more. Is there anything done to empower women into joining the sector?

We assessed where women were involved in the value chain of coffee. The majority of women were found at production sites, such as planting or coffee picking, but you see them less involved as you go higher in the value chain. That is why they earn less because they’re at the lower end of the value chain.

We are trying to build the capacity, knowledge and their participation at the higher end of the value chain and make sure they’re involved outside of the production itself. They must have the power and skills to take their matters to the union and get better prices. And in parallel, find them the necessary financing. That is why around 80 percent of our beneficiaries are woman.

Do you get resistance from the community while doing this?

Not so much. We undertook awareness raising campaigns before we started, to make sure they understand why not everybody had to be part of the growth, but nobody should be left behind at the end of the day either. That’s our principle.

Since the demand for coffee is so high, they don’t see it as competition, they just need more support. It is usually competition that makes you push each other a lot of the time, but now the demand is so much, especially for forest coffee, what’s available is not enough.

Unfortunately, the drought has affected us this season and the amount of coffee we are selling this year is going to be less than last year.

Is there any forecasts as to what the effects of the drought will look like in the coming few months?

No, we have not done that per say, but I know FAO is working around the forecast. We’re coordinating, collaborating and sharing our lessons, not just with likeminded NGOs, but with the government and donors, so that our aggregated knowledge can be able to solve the problem. We are also coordinating with the Disaster Risk Management Commission right now, chaired by the FAO.

Another major problem in Ethiopia’s farming sector is landlessness. Authorities would like to hear recommendations to avert problems arising due to landlessness. What would you like to recommend in this regard?

So, we are not going to solve the issue of land, but what we can do is to come up with ways that we can use the land efficiently and effectively. Once the farmers understand how to increase their yield per hectare, they can increase their labor input as well.

For example, when one of our coffee farmers started working with us, he could barely feed his kids or even send them to hospital. Now, from the coffee sales, he has not only generated substantial income, but has also diversified and is setting up stores in Bale. He also managed to employ 24 youth to help him in the coffee production.

So that’s how we address it by making sure you are climate smart and generating the number of jobs needed to absorb landless youth. Otherwise, you cannot solve the land issue, what you can do is only give access to it.

There are a lot of mechanisms you can do to address the issue. But from Farm Africa’s point of view, what we’re trying to do is to increase the yield per hectare and capabilities of farmers, so that they can hire more people.

From your experience, what has been the hardest thing to overcome in Ethiopia?

We haven’t been able to address or mitigate the impacts of climate change. For me, it’s always been three steps forward and three steps backwards, but we are going in the right direction. Until we address and minimize those impacts and make sure that the farmers move from rain–fed agriculture to a more sustainable climate smart agriculture, it will be difficult.

Access to information and inputs is crucial. We are doing a lot of studies on value chains, different crops and fruits and pulses, and are we disseminating enough information to everybody to make an informed decision, so that they can produce what the market wants.

If you go to speak to most of the farmers in rural areas, they produce using traditional practices. If they do not wait for rain anymore, then they can produce more harvest per year.

Does Farm Africa work on logistics as well?

No, not on logistics, but we try. What we are trying to do is to connect them with the dealers so they can come. The dealers will only come if they can find value. That is why we want to make sure the farmers are organized in cooperatives, so that when they come for the coffee, they can get 40 tons to 50 tons. The volume will make it interesting for the private sector. But, the private sector has to be part of the solution as well.

Do you have any comments regarding the crisis that is going on in the country right now and how it’s affecting the agricultural sector?

As an NGO, we are not allowed to talk about it. We are not allowed to talk about rights. But, Farm Africa is committed to support the reconciliation and recovery process. That’s where we can come in because we are not even a humanitarian organization. So, we can’t even support these kinds of interventions.

What we can do is once stability and security is established, we can quickly go in and support farmers to quickly recover and catch up with the coming harvest season. So, through the post conflict recovery, we have a lot we can contribute, but beyond that, not so much.

Is there anything you’d like to add that would help authorities, individuals or farmers?

Working with farmers is still the solution. They have the knowledge and know-how; you just have to be the catalyst to help them and enable them achieve their goals. We want to make sure the economy thrives.

We need to improve our productivity and production. Everyone including the government, NGOs, beneficiary communities themselves have a role to play to contribute to this. If we do that, we are able to not only feed our own society, but be able to export and help others.

Eskinder Nega is a household name in Ethiopia. Known for publishing newspapers with articles critical of the government, Eskinder has been in the media industry for over 25 years. In 2019, he established Balderas Political Party.

Though he lost the last election to the ruling party, he is still actively participating in political matters. He was among the people arrested in the aftermath of the killing of Hachalu Hundessa and was released a year and a half later on January 2022.

The Reporter’s Amanuel Yilkal and Samson Berhane sat down with Eskinder to understand his journey in the media industry and politics. Excerpts:

The Reporter: Let me take you back to the 90s when you started publishing Ethiopis after your return from the US. How were you attracted to the media world?

Eskinder Nega: I lived in the US for many years. When I returned to Ethiopia, the country was in the midst of changes. There were many magazines, while the only privately-owned newspaper was Eyita. The magazines were not assertive and they feared criticizing the government and its policies. They used to beat around the bush.

I was able to learn a lot from the media environment in the US, which is free to criticize the government without being censored. It is not because I am a daredevil (Jebdegna) as some see me but since I was aware of the media landscape in the US, I wanted to try a new thing.

Then I started publishing Ethiopis, a publication that was ardently challenging the ruling government back then. It continued till October 2006. Ever since I started publishing the paper, I was a target of the Tigray People Liberation Front (TPLF). I was in custody for over 10 years in the period of the TPLF-led government and another one and half years after the then Oromia People Democratic Party (OPDO) started to lead the country.

You were arrested for the first time due to a column dubbed “Fascism in Tigray” that appeared on Ethiopis.

“Facism in Tigray” appeared in the second edition of Ethiopis. The first edition’s cover story was the “killings at Sidst Kilo.” It was initiated after the death of students who opposed the secession of Eritrea from Ethiopia. It was a story that made officials angry. And when we published “fascism in Tigray” in the second edition, we became a target. May his soul rest in peace; Tesfaye Asmare was the Editor-in-Chief of the paper, while I was a publisher back then.

We did the “Fascism in Tigray” story because people in Tigray were not allowed to be a member of a party other than the TPLF back then. Those who did not become a member of the TPLF back then were not only being arrested but were also being isolated from Idir and other social institutions.

Many were isolated just because they didn’t want to be a member of TPLF. We opposed this in our article. The situation in Tigray was no different from totalitarianism, while what was happening in Addis was authoritarianism. The TPLF was controlling every step of the people in Tigray, where there was no freedom of press. In Addis, there was a freedom of press, though it was limited and was a show to create an image that the media landscape is improving after the fall of the Derg Regime.

You are saying the “Fascism in Tigray” column intended to voice the concerns of people in Tigray. However, this goes against what another newspaper of yours was publishing in a column dubbed “Wegid Yihuda”, authored by Tadios Tantu. Articles written under this column were for long criticized for belittling ethnic Tigrayan’s.

Whenever you criticize dictators, they always give you a name. When we were publishing Wegid Yihuda, there was always another article that argues against what was written in it. The column always revolved around the history of Ethiopia. It discusses about King Yohannes IV.

When the British Empire invaded Ethiopia, it was him who received their army at Hamassien. This led to the death of King Tewodros. Tadios Tantu argued this is a betrayal and TPLF is born from such a history.

Do you consider this story as a common history of Ethiopians? Or are you blaming one ethnic group for it?

When Yohannes IV allowed the British to enter Ethiopia, he was not alone. He was assisted by King Teklegiorgis (also known as Wagshum Gobeze) who allowed the British to go through his territory to Mekedella. All of these are a part of our history. Yet I believe we did not learn from it. That is why I allowed the column to be published.

However, I have not gone through each of the words of the articles appearing on Wegid Yihuda. At that time, I was editing stories appearing on three publications with a scarce resource and professionals. We used to call it guerrilla journalism. While fighting the government, we were facing critical shortage of resources. In the midst of such challenges, there were several points that were published, though they were not supposed to be printed.

However, the aim of the article was not to disparage the image of Tigrayans. I never have been an enemy to Tigrayans and I will never be. The same goes with Oromos, even though many accuse me of being an enemy to the Oromo people. We were accountable to the contents appearing on the newspaper. We may have made some mistakes.

I cannot say mistakes were never made when we were publishing articles under the column. I apologize if we made a mistake and for the error. Yet, one thing is for sure, it was never our intention to portray the people of Tigray as our enemy.

You have been given several awards while you were in the media sector. Many also say you have paid a big price for journalism, while some claim that you are an activist rather than a journalist. For you, what are the things you have contributed for the development of journalism in Ethiopia?

Journalism can only prevail in a country where democracy exists. When you try to practice pure journalism in an undemocratic state of affairs, you face several challenges. Undemocratic elements of state target you not because you do not follow the ethics of journalism; rather it is because they don’t want to accept the truth or the reality on the ground.

It is the lack of objectivity that strains your relationship with the government. It is because a dictatorial government doesn’t accept the ethics of journalism. Under such a state, you cannot practice your journalistic profession and when you fail to do so, what you do is fight for your rights. You will also be forced to be an activist, a reality that you must accept because of the situation on the ground. The press in Ethiopia passed through such challenges. Our first aim was to practice journalism.

However, in our second edition, after we published the “fascism in Tigray” story, I was arrested and tortured at Meakelawi Prison. Since then, I was fighting for my rights. On one hand, I was practicing journalism. On the other, I was practicing activism.

We were not able to bring the experiences of the west and practice it here. That happened because we were operating in an undemocratic state, while the opposite is true in the western countries. Of course, when we build a democratic state, it will be the right time to talk about journalism.

Why did you become a politician before exercising what you called “pure journalism?”

In 2006, the TPLF suspended licensing of media outlets. When we got out of prison in 2007, we were hoping everything would go back to what it was and we will be allowed to reopen our media houses.

However, the TPLF-led government refused to give us a license. I then decided to become a human rights activist. I was arrested again in 2012 and remained behind bars until 2018. I then started publishing Ethiopis.

Soon after, the issues of special interest on Addis Ababa became a public agenda. To respond to this, I became an advocate and founded a civil society organization. However, we were not able to get a political party that pushed for the implementation of what we were advocating as a CSO. That forced us to transform the CSO into a political party and I became a full-time politician afterwards.

When you founded the party, you were saying your goal was to fight for the rights of residents of Addis Ababa and even Balderas is registered as a regional party of the capital city.

However, after your release from prison recently, you claimed that your plan from the beginning was to establish a national party. Is that not contradictory?

The problem of Addis Ababa is an outcome of nation-wide problems. Addis Ababa is not facing a challenge of its own. Its current problems are born from a dictatorial form of government. When we founded the CSO, our aim was to avert problems faced by the city and its residents.

We were hopeful that EZEMA [Ethiopian Citizens for Social Justice] will achieve what we wanted for the city, but that failed to happen. When we were opposing against special interest of Oromia in Addis Ababa, we went to the public to sell our ideas. Beyond that, we picked EZEMA to make our objectives a reality.

EZEMA’s closeness to the ruling party did not comfort us. In fact, EZEMA was the flip side of the coin when it comes to the ruling party. As we were not able to get a replacement, the public started to ask how we are going to implement what we wanted at a policy level. As a response, we established the party. However, as there were only four months left for the election, there was no time to establish a national party. That is why we were limited to Addis Ababa.

But as I said earlier, the problems faced by Addis Ababa can only be solved if national problems are solved too.

As a party that claims to fight for the rights of the residents of Addis Ababa, for you, what are the major problems faced by the city’s residents.

Residents of Addis Ababa want to see a democratic Ethiopia, a country with no risk of disintegration. They want a united country. Secondly, what they want is a universal democracy.

It is not a system of government that we create together as the current Prime Minister does. They want a universal democracy that is being practiced in the US, West Europe, India, South Africa, Japan and many other countries. That is what Ethiopians want. It is no different for Addis Ababa, who has the same vision for their country as other Ethiopians do. There are many problems born from a dictatorial government. The issue of special interest in Addis Ababa is also an outcome of such a system.

As home to several ethnic groups, there is a need for the introduction of more working languages in Addis Ababa.

After Prime Minister Abiy Ahmed (PhD) came to power, a new policy has been put in place that aims to increase the working languages of the federal government to five.

That did not follow the right procedure. It needs a legal amendment. The law works for everyone. Especially the government, it has the responsibility to uphold the law. At the national level, we all agree on the need for more working languages.

However, in Addis Ababa, there is no need to add more working languages. Amharic is enough. I never heard the people of Addis Ababa demanding for more working languages.

But there are ethnic Oromos demanding for the addition of Afan Oromo as a working language of the capital, along with the Amharic language. Have you ever conducted a survey to reach to such a conclusion that there is no demand?

I never encountered such a claim. Let alone in Addis Ababa, there was no such a demand even in cities surrounding the capital. Even in rural parts of these cities, residents speak two local languages, including Amharic.

We have not conducted a study. But we did not come across such a demand. I will apologize if I encounter anyone asking for the introduction of more working languages.

Critics say your party focuses on fueling violence. Your party is present wherever there are protests or riots. And you are rarely seen coming up with policy recommendations and solutions for problems faced by citizens. How are you going to address this criticism?

Some say we focus on issues of little importance to the public. That comes from two directions. The first is a concern coming out of kindness. The second is an attempt to silence us. And it is also an action taken to imprison us again.

There are people who believe things that we are giving an emphasis, like demolition of houses, can be solved by taking administrative measures. We have to awaken the public by publicizing and following each problem. We want to make the public aware that a problem that compromises the existence of Ethiopia as a country is happening and they must debate on it.

Supporters of ethnic federalism argue that regions should continue to have the right to secede. However, you argue that secession should not be allowed. Is that not against democracy?

Take India as an example. It is a model of democracy. But it does not allow secession. See the case of Kashmir. The Muslim majority living in the city want to secede from India and be part of Pakistan. That was why they were fighting an armed struggle for the last 80 years. There are also Indian states that want to secede but the law of the country prohibits them from doing so. The same is true in other democratic states, including South Africa and Nigeria.

In Nigeria, the attempt to secede Biafra failed, while the country’s law bans any federal state from doing so. Yet this does not make Nigeria an undemocratic state. The issue of the Catalan’s is no different. The administrators of Catalonia held a referendum and declared independence from Spain. But where are they now? They are in exile in Belgium. So does that mean Spain is not a democratic country? No!

To ensure the existence of Ethiopia and avoid of the risk of disintegration, secession must be prohibited. It is not Balderas that came up with such a rule for the first time. It is based on the experience of many countries across the world.

Agriculture is still the main driver of the economy, whether we like it or not. And we have to make sure it contributes to the GDP as its intended. I think we just have to keep our eyes on the ball.

We have collaborated with other organizations in order to increase our capital as well. Upon our establishment, our bank had one billion and fifty six million birr. Next year, we are planning to raise two billion birr by selling two million shares. We will give first opportunity to buy shares to existing share-holders and then it will be open to the public. The government has set out a rule whereby private banks have to have seven billion birr in capital in the seven years. We have six years to raise the other five billion birr.

We have collaborated with other organizations in order to increase our capital as well. Upon our establishment, our bank had one billion and fifty six million birr. Next year, we are planning to raise two billion birr by selling two million shares. We will give first opportunity to buy shares to existing share-holders and then it will be open to the public. The government has set out a rule whereby private banks have to have seven billion birr in capital in the seven years. We have six years to raise the other five billion birr.

Ethiopians have demonstrated on ample occasions that they will never tolerate anyone bent on advancing their selfish political agendas by sowing instability and thereby jeopardize Ethiopia’s very survival. All political actors need to abide by the notion that each and everything they do must be guided by the vital interests of the country. They also ought to realize that Ethiopia is much more about than the trappings of power, bankrupt ideologies belonging to the dustbins of history, manufactured historical narratives, ethnic and religious identities, and obsession with flags and emblems. It’s then that its citizens can embark on the journey to building a democratic nation that is the epitome of strong unity, durable peace, and sustained economic growth.

The panoply of challenges facing Ethiopia and its people show no sign of respite. Though active hostilities in the northern part of the country, have almost stopped after the forces of Tigray People’s Liberation Front (TPLF) were pushed back to Tigray from most of the territories they had captured in the adjoining Amhara and Afar regions, the security situation in a number of areas of the nation is fragile owing to the interminable endless cycle of violence that has been racking them for years now. Aside from the death of tens of thousands and the displacement of millions frequent outbreaks of internecine conflicts have led to, the unchecked rise in extremist attitudes, the cost of living, corruption, and land grabbing, among others, have made life an ordeal for the vast majority of Ethiopians. It’s in this backdrop that an incident, whose fallout could potentially plunge Ethiopia into a crisis of catastrophic proportions, recently took place.

On March 29 at least 26 people were killed and several more injured in clashes between armed groups hailing from the Minjar Shenkora Woreda of North Shewa Zone, Amhara regional state, and local militia in the bordering Fentalle woreda, East Shewa Zone of Oromia regional state. The blame game began soon thereafter with both sides issuing conflicting a slew of contradicting statements regarding the incident. Amhara region officials lay the blame on “anti-peace groups” whom they accused of perpetrating the attack. Their counterparts from the Oromia region though disputed the accusation, blaming the attack on “extremist forces operating in the Amhara region”. They also took these forces to task for displacing people and looting property in other woredas of Oromia bordering the Amhara region. It’s surprising that both the federal government and the ruling Prosperity Party (PP) have not made any overt attempt to defuse the tension between the Amhara and Oromia regional administrations even as both escalate the war of words among them.

The feuding between officials heading two branches of the ruling party cannot be confined to them given the party is still ethno-centric despite claiming to be a national party. In fact it has led to spats among major opposition parties active in the respective regions and social media activists, which are spewing a hateful rhetoric that could very well pit the Oromo and Amhara people, the two largest ethnic groups in Ethiopia, in a bloody conflict. The consequences of such a conflict are too horrible to contemplate. From a protracted and destructive civil war in which no side emerges victorious to a total state collapse all the scenarios facing the nation are lose-lose not only for its citizens, but also the Horn of Africa and beyond. It’s not entirely clear whether the protagonists to the ongoing verbal warfare realize that their actions are liable to lead to Ethiopia’s unraveling or are indifferent to the ensuing heavy price.

Ethiopians have demonstrated on ample occasions that they will never tolerate anyone bent on advancing their selfish political agendas by sowing instability and thereby jeopardize Ethiopia’s very survival. All political actors need to abide by the notion that each and everything they do must be guided by the vital interests of the country. They also ought to realize that Ethiopia is much more about than the trappings of power, bankrupt ideologies belonging to the dustbins of history, manufactured historical narratives, ethnic and religious identities, and obsession with flags and emblems. It’s then that its citizens can embark on the journey to building a democratic nation that is the epitome of strong unity, durable peace, and sustained economic growth.

Two pieces of legislation entailing catastrophic consequences for Ethiopia and its people are meandering through the United States Congress. The first, whose official moniker is H.R. 6600: Ethiopia Stabilization, Peace, and Democracy Act, is pending before House floor after it moved out House Foreign Relations Committee in mid-February. Entitled S. 3199: the Ethiopia Peace and Stabilization Act, the second was approved this week by the Senate Foreign Relations Committee for consideration by the full Senate. The bills require the President of the U.S. to impose sanctions on foreign persons the Administration determines to have “threatened peace and stability, undermined progress toward a ceasefire, obstructed humanitarian assistance, or violated human rights in Ethiopia.” They would also would suspend certain U.S. foreign assistance to Ethiopia and authorize the Administration to help entities investigate and seek accountability for war crimes, crimes against humanity, and genocide in that country. Furthermore, the bill would require the Administration to “develop and implement a strategy to promote peace, reconciliation, and human rights in Ethiopia and to report to the Congress on its actions under the bill and on other related matters.”

Ever since the forces of the Tigray People’s Revolutionary Democratic Front (TPLF) launched an unprovoked attack on the Northern Command of the Ethiopian National Defence Forces (ENDF), the bilateral relationship between Ethiopia and U.S. have broken down following the U.S.’ adoption a series of measures intended to arm-twist Ethiopia into choosing its side over China in the new cold war. Although the two countries have recently shown signs of improvements in their relations with the allocation of additional U.S. funds in support of different regional states and institutions in Ethiopia, the U.S. is still bent on applying more sticks than carrots to accomplish its strategic goal in Ethiopia and the wider region. The passage of these blatantly biased bills is sure to negatively impact Ethio-U.S. relations for they erode the trust, predictability and mutual cooperation on which they should be based.

What makes the contents of H.R. 6600 and S. 3199 more galling is the fact that they place no sanctions or threats of one against the TPLF despite its instigation, expansion and prolonging of the civil war as well as the commission of crimes of atrocities. In addition they fail to give due recognition to the steps the Ethiopian government has taken to bring a peaceful resolution to the civil war. Chief among these measures are the withdrawal of the ENDF from the Tigray region in June 2021 following the unilateral declaration of a ceasefire; the streamlining of aid delivery to the regions affected by the war; ordering the ENDF to not cross into Tigray after TPLF forces were routed from the positions they held in the adjoining regions they had invaded in December 2021; releasing several politicians, including TPLF leaders, from prison in January; lifting the six-month State of Emergency declared after three months; and declaring a humanitarian truce to facilitate the delivery of aid to the conflict-affected people of Tigray. Such inequity only serves to deepen Ethiopians’ distrust of the U.S. and its allies.

Punitive sanctions do more harm than good and seldom achieve their intended outcome. The US has not secured democracy, peace and stability by imposing debilitating sanctions on any country in the world. It is the poorest of the poor, low- and middle-income Ethiopians who will suffer the most by the passage of H.R. 6600 and S. 3199, not the government officials they target. The sanctions will adversely affect regions which have already been hit very hard by the war, including Tigray, Afar and Amhara given they make it very difficult to source the materials needed to reconstruct the health, educational infrastructure the war has ravaged as well as the resumption of other critical services. Moreover, by calling for an independent investigation into conflict-related human rights violations, the bills signal lack of confidence in the Ethiopian Human Rights Commission, whose report on a joint investigation undertaken with the U.N. Human Rights Commission on the war in Tigray, was endorsed and applauded. The debilitating impacts of the bills on a poor nation like Ethiopia will be devastating and apt to linger for years. This would lead to the very instability and fragility of Ethiopia that the U.S. ostensibly wants to prevent.

In a rare foray into engaging Ethiopians in candid dialogues since the advent to power of Prime Minister Abiy Ahmed (PhD) in April 2018, senior officials of the ruling Prosperity Party (PP) have fanned out across Ethiopia to hold dialogues with citizens from all walks of life. The discussions come on the heels of the premier’s pledge at the conclusion of last week’s meeting of the party’s executive committee that party officials would soon be dispatched throughout the country with a view to seek durable solutions to multi-pronged challenges in collaboration with the public. The party said the dialogue has two underlying objectives: informing the public about the decisions of the party’s first Congress held at a fortnight ago and reaching a consensus on the respective roles of the public and the government in the search for solutions. By most accounts the participants were apparently able to voice their views without any inhibition. Time will tell if the party is committed to heeding them.

The topics raised at the discussions largely coincided with the areas of focus PP’s congress vowed to tackle. Chief among these are the deteriorating security situation in large swathes of the country; the debilitating hike in the cost of living; the rise of extremism and exclusionism; and the proliferation of corruption and other forms of bad governance. The crux of the impassioned and sometimes angry views expressed by the public was that the blame for the current state of things squarely lay with the government. While some acknowledged that the plethora of problems besetting the nation and its people predate the government and thus absolve it of some degree of culpability, most did not buy into this line of reasoning saying that the government lacked both the desire and capacity to put paid to them. In fact, they argued, the rank of the government has been infiltrated by duplicitous elements intent on advancing their selfish interest or the sinister agendas of domestic and foreign enemies. The government would do well to take immediate corrective actions for the extent to which it genuinely responds to the demands of citizens will determine if and how long it may remain in office.

The gravest of the grievances voiced by everyone participating in the discussion forums is the cycle of violence that has been rocking Ethiopia for some years now. From the frequent outbreak of internecine conflicts and targeted attacks to the war in the Tigray, Amhara and Afar regions thousands of innocent citizens including children and the elderly have been butchered and injured with millions more displaced from their homes. Though the public has demanded time and again that the government protect its safety and security and bring the perpetrators of acts endangering its welfare, the latter has been found wanting when it comes to ending the recurrence of senseless carnage. The government’s predictable response to the calls for it to guarantee the fundamental rights of citizens to lead a secure life anywhere within the territory of Ethiopia has been to vow that it’s committed to upholding the rule of law. It must stop paying lip service to a matter of grave importance and back up its promise with action.

The second and equally pressing matter that arose during the course of the discussions was the backbreaking cost of living. The interminable escalation of the headline inflation rate has meant that life has become a living hell for the vast majority of Ethiopians and pushed a significant chunk of the population into poverty. There are a host of reasons driving inflation. One of them is the inability of the government to formulate and implement monetary policies instrumental to contain if not bring down the phenomenon. Its failure to allocate sufficient foreign currency to importers of basic necessities and eliminate the predatory behavior of unscrupulous market actors have further contributed to exacerbating the inflationary pressure. Although the government can do nothing to halt a significant contributing factor—the rise in the price of fuel and imported food items—it is incumbent on it to seek both short- and long-term solutions through meaningful consultations with the general public. Undertaking a course of action that does not take into consideration the views of everyone who has a stake is bound to fail miserably and worsen the problem. The serious ramifications of the spiraling inflation, namely stirring widespread public discontent that triggers political and social unrest, is something the government needs to wise up to and take appropriate steps to neutralize them.

As much as the government bears the primary obligation of easing the suffering Ethiopians are undergoing, it cannot succeed if it tries to go it alone. Aside from empowering political parties, religious organizations, educational institutions, civic and professional associations, elders, the youth and women to play an active role in the search for informed solutions, the government is duty-bound to clean its house and purge officials and functionaries in its structures who are complicit in the very problem they are supposed to fix. Important as organizing dialogue forums may be in garnering the views of the public, it’s paramount to ensure that they are inclusive. It’s only then that the government can effectively respond to the demands expressed by the public in the recent discussions.

As some U.S. lawmakers and lobbyists engage in a concerted endeavor to force Ethiopia into kowtowing to the demands of the West, it is incumbent on the government, people and friends of Ethiopia to do everything possible to foil their sinister design. While efforts are underway both at home and in the U.S. to stop H.R. 6600 and S. 3199 from seeing the light of day, they should be ramped up until the bills are defeated. It’s disheartening though to see some citizens and members of the diaspora community side with the sponsors of the bills. Ethiopians should not despair just because the bills have advanced to the House and Senate floors. In order for them to become law they will need a full vote of both chambers and the signature of President Joe Biden. There are several things that can be done in the meantime to ensure that even if the bills pass they are defanged and unrecognizable from their current form. It’s imperative that we keep up the fight to the death and resolutely defend our national interest.

The inability of the political class to resolve differences through discussions and negotiations has for far too long been a hallmark of Ethiopian politics. There is no disagreement under Ethiopian skies, however deep-seated it may be, that cannot be addressed through genuine dialogue. Politicians that truly have the interest of Ethiopia and its people at heart owe the duty to ensure that they comport themselves in a manner that advances the interests of the nation, not their selfish motives or the agendas of adversaries intent on doing the country harm. They need to work together to facilitate Ethiopia’s smooth transition to a democratic order, uphold the rule of law, and enable citizens to have access to justice. Furthermore, it’s incumbent on them to play an exemplary role in terms of, among others, rejecting discriminatory attitudes and practices, creating a mutually respectful relationship amongst themselves, and forging a culture of constructive dialogue. It’s then that the calamitous ramifications of the war of words between members of Prosperity Party can be averted.

The inability of the political class to resolve differences through discussions and negotiations has for far too long been a hallmark of Ethiopian politics. There is no disagreement under Ethiopian skies, however deep-seated it may be, that cannot be addressed through genuine dialogue. Politicians that truly have the interest of Ethiopia and its people at heart owe the duty to ensure that they comport themselves in a manner that advances the interests of the nation, not their selfish motives or the agendas of adversaries intent on doing the country harm. They need to work together to facilitate Ethiopia’s smooth transition to a democratic order, uphold the rule of law, and enable citizens to have access to justice. Furthermore, it’s incumbent on them to play an exemplary role in terms of, among others, rejecting discriminatory attitudes and practices, creating a mutually respectful relationship amongst themselves, and forging a culture of constructive dialogue. It’s then that the calamitous ramifications of the war of words between members of Prosperity Party can be averted.

Best known for playing a big role in establishing the Association of Chartered Certified Accountant Ethiopia (ACCA), Hikmet Abdella is currently the Director-General of Accounting & Audit Board of Ethiopia (AABE). She has been holding the position since 2019 after replacing Gashe Yemane, the founding DG of the Board.

Hikmet has been tasked to complete the path to full implementation of International Financial Reporting Standard (IFRS) in the next three years.

The Reporter’s Ashenafi Endale sat down with the Director General as she reflects on the path taken to make Ethiopia’s audit and accounting standard comply with internationally accepted principles and rules. Excerpts:

The Reporter: How is the progress of Accounting & Audit Board of Ethiopia (AABE) in professionalizing Ethiopia’s auditing system?

Hikmet Abdella: Financial statement is the cornerstone of any institution, whether they are business entities or NGOs. But Ethiopia had no financial statement standards for a long time and there were also no standards for professionals.

The Accounting and Auditing Board of Ethiopia (AABE) was established under such context. Before the AABE, the Auditor General (AG) used to provide licenses and undertake supreme audits for public institutions. So licensing auditors, accounts and firms was an additional job for the AG, at that time. It gave the licenses but had no capacity to control and regulate them.

A World Bank study in 2007 indicated that Ethiopia’s economy was growing faster and there is no accounting and auditing professionals that matched the growing businesses. The AABE was established based on this recommendation.

The AABE’s task is to license accountants, auditors, firms and regulate them. We also adopt and implement internationally accepted auditing standards in Ethiopia. These professionals undertake audits and submit documents to the AABE. We have a library of firms’ files.

Which companies are difficult to control? Which company structures are more complicated in Ethiopia?

Our prime priorities are Public Interest Entities (PIE) and the AABE is basically established to protect these entities from failing. If a company fails, it might not have much impact on the whole economy but if PIE fail it will have a wider economic impact.

Different countries have varying definitions for PIE.

PIE is defined qualitatively and quantitatively. For instance, financial institutions are PIE with huge numbers of shareholder’s with interests. They collect savings and give loans. So they must be protected from failing. Secondly, SOEs are protected because they are the highest taxpayers.

MFIs and share companies are our next priorities, while PLCs are our last priority. We don’t have to control vendors since they have absolutely no impact on the economy.

Every jurisdiction has its own definition. The AABE is currently developing its own definition for PIE and other business entities but we have to align with international standards.

Currently, a similar international definition for PIE is being debated and we have been participating in such debates virtually, due to the COVID-19. Probably by next year, we will have a new definition for PIEs. But there will not be much deviation from what we are using now.

The AABE’s task also relates to domestic resource mobilization. Big companies have to generate big taxes and the AABE controls big business entities strictly, than small businesses.

Ethiopia’s private sector is very new. It has only been 30 years since the communist regime changed and the only big players are financial institutions, followed by other share companies.

Generational companies, that have passed from generation to generation, have also a big role to play and we must be able to maintain family owned enterprises. They usually lie in the middle, between small and big companies.

Family owned enterprises, if well nurtured, can contribute up to 50 percent of the tax revenue. So they should be considered as PIE. But in Ethiopia, family owned enterprises are dying out currently, due to various reasons.

Scholars argue that the tax base should be diversified in Ethiopia. Is it big companies or small businesses that pay more taxes currently?

It is a matter of context. Large taxpayers have to get incentives in different mechanisms, so they can grow more robustly. A country cannot grow without diversifying its tax base at a small business level.

The number of taxpayers in Ethiopia must grow. Many small companies, pooled together, bring huge sums of tax revenues. But the tax authorities must be careful not to squeeze small businesses through stringent taxes. Small businesses must be relieved from stringent of taxes, so they can grow.

What is the AABE’s capacity in controlling and regulating Foreign Direct Investments since Ethiopia’s economy is integrating into the global economy?

The Prime Minister recently stated that the financial sector will open up. And the ongoing liberalization and privatization, as well as the World Trade Organization accession, need ultimate caution. It is good that big foreign players are coming to Ethiopia. But all regulatory institutions in Ethiopia, including the AABE, must sit down, and discuss whether we can handle it or not.

Ethiopia’s economy and regulatory institutions have been closed for a long time. Even neighboring countries have more capacity when it comes to regulatory capacity. There are also differences but we cannot remain closed. We must look for methods to bridge the regulatory limitations.

The east African block including Rwanda, Uganda, Kenya, have a system in which accounting and auditing professionals can move freely from one country to the other.

When Ethiopia opens up, they will bring their own systems and professionals. Ethiopia must produce its own professionals to control foreign firms. Currently, Ethiopia has no sufficient accounting and auditing professionals to support the economy.

We are currently preparing to establish the Ethiopian Institute of Certified Public Accountancy (EICPA). Hopefully, it will be operational this year and start to produce professionals. If you go to Kenya, there are close to 40,000 professional accountants but Ethiopia has around 250 professionals. We cannot support or handle the opening-up of the economy with such meager figures.

The Capital Market is nearing realization in Ethiopia, which requires precise and highly trained professionals. PIE will be affected if we launch a stock market without skilled professionals. In some countries, only firms listed on stock markets are considered PIE.

As soon as the stock market is opened, banks will be the first to be listed. These institutions must be valuated every three months, instead of annually as before.

Unless we have professionals to value the Initial Public Offerings, public interest will always be affected. Even statements made by politicians can affect the value of an IPO; so the listed firm must be valuated frequently. This is impossible without qualified accounting and auditing professionals.

Officials at the National Bank of Ethiopia are saying it will take three years to create a fully-fledged stock market ecosystem. Can we reach that with the absence of professionals?

Big things can be done in three years. With the EICPA established now, and is backed with a sufficient budget, we can generate 5,000 professionals annually.

There are already many graduates but there is much to be done to create the right stock market ecosystem. Public interest must not be affected, until we try to fill the gap in lack of professionals.

There are many distortions in the commodity value chain and malpractices in the corporate world in Ethiopia. Even recently, importers and wholesalers have been blamed for hoarding edible oil, which has caused a crisis. Do you think the AABE has created a good corporate culture in Ethiopia?

We did not achieve much progress. There is no responsibility. Do you think money laundering is done without the knowledge of accountants? Is the accountant responsible to the public, government, or the company owner?

Ethics is the biggest problem. Accountants can build or destroy a country. The demand for accountants is always up, even at war times. Accountants can change small money into big, or vice versa.

Currently, Ethiopia is negotiating to start the Africa Continental Free Trade Area (AfCFTA) and also the WTO. It should be accountants that represent Ethiopia on the negotiation table. Accountants know what the agreement articles mean. They can tell you what it means ten years from now.

Does the AABE work with the auditor general? Do you have the capacity to take action on accounting misbehaviors?

The Auditor General audits institutions and we produce the professionals. We do not audit public institutions. We do SOEs, private companies and NGOs and the Ministry of Finance reviews the financial statements. Currently, we are reviewing SOEs parastatal financial statements. We will discuss with the PEHA, the MoF and the AG next week.

Ethiopia embarked on the road to privatization and liberalization three years ago to shift the economy from state-led to the private sector. But currently, regional states are building their own conglomerates, while the federal government also establishes the Ethiopian Investment Holding. Do you think this can create productive and efficient firms in the economy?

That is a difficult question. What is for sure is less is done concerning financial statements. Many SOEs, endowments and other firms vanished, or merged, without any consultations with the AABE.

There is a huge problem on this issue. There is no procedure at all in cases of shutting down SOEs, mergers or creating a holding company. Assets, liabilities and other complexities go without proper accounting, especially in mergers. Firms usually close or merge in the middle of the year, before the fiscal year ends and a financial statement is compiled. This is a big problem.

Usually, the Cabinet of Ministers decides on the formation, closure or merger of SOEs.

I have no knowledge on why the government is making changes when it comes to its role in the economy. But strengthening parastatals is common in many countries. We are also seeing progress to accede to the WTO.

Is there capacity to regulate foreign firms like MPESA and are foreign banks allowed? Do you think banks can survive foreign competition?

Ethiopia’s financial institutions are better than where they were ten years ago. If a single foreign bank had come ten years ago, local banks would have never survived, even if they merged into one.

But now, local banks are stronger. The problem is, local banks cannot grow more than they have now. They cannot diversify their products anymore and are very similar. If foreign banks or MPESA come, more products can come with them and support the economy.

But the banking sector will not be opened at once and will be gradual and managed. Unless the regulatory capacity grows parallel and equally, Ethiopia will be in danger.

What do you think is the competitive edge of local banks?

There is not much but their organic growth is very appealing. But the quest for access to finance in Ethiopia is beyond the capacity of existing banks. The economy grew very fast but the access to finance did not.

Even now, we are facing a liquidity problem, which has affected the construction industry due to the lack of credit. The construction industry massively contributes to the economy. But it depends on finances.

The return on shares also remains very positive. But some banks are reaching their ceilings. Many people bought shares because there were no other alternative investment areas at the time. And once the stock market is opened, there will be more opportunities, even for the layman.

Did the new Commercial Code, which was amended after 62 years, bring changes to company structures and accounting systems?

Allowing the creation of a holding company, one person PLC and other minor changes have occurred. The code also allowed foreign accounting firms to come to Ethiopia. The big four, which include KPMG and PWDC, are allowed to operate in Ethiopia.

But these international financial institutions can only partner with local companies. They are allowed to have a 49 percent stake. They are currently requesting us for a license. This is one of the signs that the economy is opening.

The big four will have a big role in capacity building but are very unhappy with the 49/51 proportion. But for me, it is perfect.

So auditing is allowed for foreigners now?

Yes, but this was only made possible after the commercial code was amended.

Recently Ethio telecom’s CEO, Frehiwot Tamiru rejected the 80 billion birr asset valuation of the company. Some say the low valuation is intentional, and conspiracy concerning the valuator has been raised.

I am very concerned of the valuation issue in Ethiopia. Valuation is one input for accounting. In the old days, the value of vehicles dropped every year and on the tenth year, the value gets to zero. The Tax Law also states it must depreciate by ten percent annually. The IFRS states an assets value must be stated in its current market value, which shows the true value of a company.

In Ethiopia, the value of vehicles keeps appreciating. A Toyota bought with 200,000 birr ten years ago is now 2,000,000 million birr. So according to IFRS, the vehicle is worth 2,000,000 birr. But the tax system does not demand depreciation.

Who is the right valuator in Ethiopia? There are only three certified valuators in Ethiopia.

The conspiracy issue when it comes to foreign valuators is not a new issue. That is why I say the opening up of the country must be cautious. Ethiopia has been closed for so long that the process must be done step by step. The reasons why the big four hate the 49/51 ratio is because they want to come at once and manipulate the weak regulatory system.

Whatever your background, you care about your country. But foreign firms care only about their profit. The loyalty of their accountants and auditors is not to the Ethiopian public or the government. It is for their parent company abroad. This is why we must produce our own professionals, to maintain the balance.

Which institutions have shown progress in implementing IFRS?

That would be financial institutions. They have the money and IFRS is expensive. If a company can afford the expensive professionals, it is simple to implement IFRS. There is a huge demand for the professionals, but there are very few. The demand shot-up since the AABE came.

Financial institutions are implementing IFRS because they have the money and managed to engage international financial consultants, but SOEs are the first to bring an IFRS report four years ago.

Banks are blamed for engaging in informal financing including the black market, and informal Hawala services. Do you think IFRS brought transparency to the banking system?

Every time an economic system is closed, informal doors are opened, including corruption. Many problems will be solved, if the economy is opened but as long as it remains closed, it creates many loopholes.

New banks have come into the picture in the past three years. But lately, the PM has said the sector will open up soon. When should it be opened?

When foreign competition comes, it will be all about survival of the fittest. How long will it take for our banks to be fit? If they have to merge to be competitive, let it be. Mergers should be encouraged. It is better to have a few strong, internationally competitive banks than many banks.

So far, Ethiopian banks are not even going into regional states, because they did not even satisfy the urban clients while Kenyan and Nigerian banks are working at continental levels. That should be our direction.

What would be your expectations of the upcoming stock market?

It will engage the ordinary people. Only few have been able to buy bank shares. But in a capital market, people can have a stake in the stock market. Anybody can invest in profitable businesses, in a stock market.

Will the EICPA produce professionals for the stock market?

Yes. The institute will generate mainly certified public accountants, to address the diversified demand of professionals from different institutions.

Various institutions want to install their own institute to produce such professionals. But that would be unaffordable. So it should be the EICPA that branches-out and addresses these diversified interests.

Who will be listed on the IPO first?

Financial institutions, then SOEs, share companies, and family owned enterprises. The last one may need discussions on whether they want to go public.

Cross listing is also possible. For instance, companies like Coca Cola, which are listed in other countries and also operating in Ethiopia, can be listed in Ethiopia.

Why is it still difficult to solve under-invoicing and over-invoicing challenges in Ethiopia’s import-export business?

Our concern is how to address it through a transparent accounting system. But there are varying scholarly debates on this issue.

Lately, the Ethiopian Investment Holding company has been formed to be an umbrella company for SOEs. Do you think such a mammoth holding company, run by a government, can be efficient given that SOEs are known for wasting resource?

I believe such trend of creating holding companies is a good start. If there is a strong accounting and valuations system, SOEs and holding companies can be efficient.

Liability and asset management company (LAMC) was also recently formed to soak up SOEs’ debts. Credit default swaps, or trading credit derivatives, is common in other countries. In Ethiopia too, some banks are buying defaulted debts from prospective enterprises. Do you think the trend is recognized by the AABE in Ethiopia?

This area should be researched. Many new trends are emerging in Ethiopia’s economy and its contribution must be analyzed.

Before the Ukraine war and COVID-19, scholars were saying globalization is invincible. Now, self-sufficiency is becoming irreplaceable. We have been dependent on FDIs, but they abandon industrial parks when they want. Yet, Ethiopia is pushing for privatization and more integration in the international economic system.

Don’t you think it is time to focus on economic sovereignty, including import substitution? I am not talking about closing the economy, but where should be the boundary?

No country is economically self-sufficient, including the US. Their economy was stuck when Chinese supply declined during COVID-19. Many companies closed in the US, because the supply chain was disrupted. Ethiopia cannot think of self-sufficiency with a nascent manufacturing industry.

But I believe it is time to re-prioritize our policies. Especially, our negotiation skills on international economic activities must grow. The level of our negotiation skill determines the level of external debt stress on our economy.

Many countries have long term plans, up to a century. We must be clear and have a realistic plan on where we want to go in the long term, regarding self-sufficiency, import substitution, even on Chinese imports. For instance, we export oilseed and import edible oil at expensive prices. This can be replaced locally.

Many investments were damaged due to the conflict in northern Ethiopia and COVID-19 pandemic before that. Can they be compensated rightly?

Knowing their accurate accounting is critical, to determine their losses and compensations. We also need to produce professionals on investment insurance policies.

How man licensed auditing firms are there?

Basically, the AABE gives two kinds of licenses. Authorized accountants prepare financial statements. There are around 2,000 authorized accountants, at federal and regional levels and there are 162 independent auditors.

What are its challenges?

There are many challenges. The AABE is a regulatory body. We are expected to have much more capacity than those we control. One of the challenges relates to professionals earning more money if they operate privately, than work for the AABE.

Professionals in regulatory institutions, have less incentive. If the professionals have more power than the regulator, it is difficult to regulate. For the time being, the board is using consultants who are paid by the World Bank, with approval from the Ministry of Finance.

ACCA supported us too. Currently, the AABE is in good position. We know how to review audit reports, and control licensed professionals. Some companies take up to four years to finalize financial statements, but we always begin to review from the first year.

The world is celebrating March 8th. Do you think the affirmative actions provided in Ethiopia have really empowered women?

I do not know what incentives are provided. March 8th is good to highlight the challenges women face. But nobody cares about the details on normal days. Those women like us, who have succeeded, should share our experiences and become role models to young people. We have much homework ahead.

The statistics of women in higher corporate and leadership positions, is alarming. I think there is only one bank president currently and this is not because women lack capacity. If you look at the boards of banks, women constitute less than 10 percent. It is the same in SOEs.

Our definition of democracy is distorted. Ethiopians think ideological semblance comes from similar people. That is wrong. Successful women must nurture the young.

Some European banks which survived the 2008 financial crisis, were banks led by women. Do you think making women CEOs is a guaranteed success?

Women have different management philosophy than men. Women lead with humility. It is not because we have more capacity but because we have intense concern for humanity.

Usually women empowerment issues are used or raised during March 8th or elections. When will equal opportunity become embedded in the publics thought?

We live in a man’s world. The existing trend must change completely, to accommodate women. A new world and country that equally accommodates women and men must be created.

Radical feminists argue a new social order should be created from scratch.

That would be good, if it is possible.

But other groups argue the existing world can accommodate women, with some adjustments.

I agree with this one. But I do not think we should try everything foreigners tell us, especially on feminism. Context and culture are very important. Ethiopia has a different context from the west. We can create an indigenous system for Ethiopia.

First, we have to reconfigure what the education system, society and the media tells about equality. The narrations and practice must be seamless, while extremist views on gender issues only harms the efforts.

If completely erasing the existing system and creating a new order is possible, it should have been simple to reshape the country.

For instance, there are some jobs where women earn less for the same position. Can it be solved by policy actions?

There are various challenges posed on women, some to be solved by the government, some by the private sector, or the society. For instance, board compositions can be solved only by policy. Chambers can also do more work to bridge the inequality gap. And some challenges are inherently solved through time.

There is this discussion over equal opportunity versus equal outcome. There is opportunity for all. Both boys and girls go to school. But that equal opportunity does not continue. Women give birth and then must take care of children.

The inequality will change as more women come into leadership roles. No challenge can be solved overnight, through policies or campaigns. For instance, the AABE can play a role in board compositions because corporate governance is one of its tasks.

Sewagegn Chane is director of the Public Financial Institutions supervisory department at the Public Enterprise Holding and Administration (PEHA), which regulates state-owned enterprises. Sewagegn is currently responsible for directly supervising the Development Bank of Ethiopia (DBE) and the Liability and Asset Management Corporation (LAMC). The Commercial Bank of Ethiopia (CBE), Ethiopian Insurance Corporation (EIC), and the National Lottery were also under his supervision, until they are transferred to Ethiopian Investment Holding (EIH) past May.

Working in public financial institutions for 30 years, Sewagegn initiated the establishment of the stock market in Ethiopia, which is bearing fruit eleven years after the first feasibility study. He was also vocal and key in rescuing the DBE, initiating Ethiopia’s first reinsurance company, Takaful (Islamic insurance), among others.

Sewagegn is also researcher at i-Capital Institute and organizer of the East African Finance Summit. Currently, he is leading two teams formed at the institute, studying the establishment of an investment and agricultural development banks in Ethiopia. Although he has been advocating ending state protection over the financial sector for years, he has currently changed his mind, just as Prime Minister Abiy Ahmed (PhD) authorized a policy that envisages opening up Ethiopia’s financial sector to foreign competition. Sewagegn believes the banking sector should remain closed at least for the next few years. The Reporter’s Ashenafi Endale sat down with the public finance guru. The excerpts, does not necessarily reflect PEHA’s position.

The Reporter: What is the progress in reforming public financial institutions, which commenced after Abiy came to power?

Sewagegn Chane: The biggest reform we undertook is in the DBE. In 2018/19, the House of Peoples’ Representatives (HPR) decided DBE cannot continue as a financial institution and debated on how to dismantle it. That year, the bank reported 765 million birr loss so the HPR decided that the bank is not supporting itself, let alone the economy.

Myself, Haileyesus Bekele, the president at the time, and Yohannes Ayalew (PhD) DBE board president at the time, were called by the HPR to explain the issue. At that time, Public Finance Institutions Agency was a separate entity outside PEHA. The agency was led by Sintayehu Hailemichael (PhD) and I was the deputy director for operations. When some 36 SOEs were put under PEHA in 2018/19, the agency was included under PEHA, as a directorate.

The Budget and Finance Standing Committee at the Parliament insisted the DBE must be dismantled, because it was reporting a loss consecutively. The three of us were called to give our final comments on the committee’s decision. The committee was told that the fundamental problem of the bank was the lack of institutional independence.

Everybody was intervening in the bank, and it was unable to operate as a bank. The PM, other ministers, sectorial institutions, and even individuals have been meddling in DBE’s operation. Secondly, the bank gives loans but does not collect. Those who took DBE loans view it as the government’s budget, not as a client. Most of them had the “developmental investors” plate.

They take a loan and divert it to other businesses. Commercial farming in Gambella and Benishangul are good examples. I was in Gambllea for a year and half, to study why DBE’s loans failed there. There are so many rain-fed projects there. Particularly, six of those that took loans completely diverted the money to other businesses, instead of the commercial farming.

I stood before the standing committee, and pledged to give the DBE additional time. I told them if institutional freedom is restored, relationships with clients will be straightforward, and the bank’s loan collection capacity rebuilt, bringing DBE on track. So I asked the standing committee to give us just one year, and if we fail to rescue the bank in that year, then the committee can dismantle it.

Yohannes on his behalf explained how the IMF and the World Bank are happy to see the DBE dismantled because they do not want development banks in developing economies. He also elaborated how important a development bank is for Ethiopia. After a brief tea brake discussions, the standing committee announced it granted the one year time.

Immediately, we embarked on the reform agenda, introducing seven reform pillars. One of the biggest reform pillars was reducing DBE’s Non Performing Loans, which was over 40 percent at the time. If the bank cannot collect the loans, it cannot disburse loans the next time.

DBE’s NPL at the time was weighed in rain-fed agriculture and textile. So, we stopped any further loans for rain-fed agriculture. In textile, many foreign investors took loans in billions but did not pay, so we decided to take over all the projects that are not paying back their loans, and transferred them to other investors.

We also took the contract management of non-performing projects. For instance, the DBE took over the management of Elsi Addis, Etur and other textile factories, for the time being. Except Etur, most of these projects have been transferred to new investors, without reaching the foreclosure stage.

The major project left on our hands to date is Ayka Addis.

The other serious measurements we took were barring any officials from intervening in any loan appraisals and disbursement processes. Before the reform, orders for some loan approvals were given from the Office of the PM. Officials from the Industry, trade, agriculture, and many other ministries used to give such informal orders to the bank. Now, even the DBE board cannot involve in loan disbursement cases, except on strategic issues.

We managed to reduce DBE’s NPL to 30 percent this year, including Tigray loans. It is actually 17 percent, if loans in Tigray are excluded, which are affected by the war in northern Ethiopia. Profit comes from loan interest. If the loan is not collected, there can be no profit.

We managed to generate 1.2 million in 2019/20; just a year after the reform was launched. This year, the bank generated 3.9 billion birr in profit. If we did not put aside 4.1 billion birr provision for the Tigray loans, DBE’s profit this year could have been 7.8 billion birr. The DBE is rescued now and everybody is acting as a client now.

DBE’s source of finance is the guarantees from the Ministry of Finance and the National Bank of Ethiopia (NBE). The capital has increased from five million to one billion. The macroeconomic committee approved a study to allow new DBE bond, effective since January. This is apart from the GERD bond, which is the DBEs source of finance.

Before the reform, all the financial indicators of the bank were negative, and unhealthy. We completely reversed all of that, except for the NPL. Before the reform, there were only expenses and disbursement, but now there is income.

Out of the 31 strategic measurements we stipulated under the seven reform pillars, 21 are aggressively implemented and ten are in the process. Only one measurement has not started, which is the digital technology and modernization initiative.

The PEHA and DBE’s board has contributed for the success of DBEs management. One of the positive factors is the steel-serious discipline of Tegegnework Getu (PhD), the board chair of DBE. As a board chair, he is opaque to any external influence or favor. He never took stipends and incentives allocated for board chairs annually. Even he uses his own car for DBE activities.

Yohannes was the chief economist at the NBE for a long time. How did you believe in him, that he could rescue the bank?

Under past presidents, the bank had many deviations and exceptions. Instead of going through loan approval and disbursement procedures, loan seekers directly contact the president and get the loans, informally.

For instance, after we banned DBE loans for rain-fed agriculture in 2018/19, the bank gave 120 million for rain-fed agriculture project. The president at the time said he was forced because certain officials at the Ministry of Agriculture managed to give the order via the Office of the PM.

Surprisingly, the board chair does not know about the loan. The bank was bleeding. We had to be brutal to stop the bleeding. Most of the bad loans were given during Isayas Bahre’s time. Both Haileyesus and Getahun Nana were unable to save the bank. Our biggest worry was that Yohannes might decline the role to lead the DBE.

Over 200 large scale agricultural projects, and a number of foreign textile investors took loans from the bank and failed to pay. Are you pursuing them legally?

We are trying to acquire the lands currently. Our biggest problem now is with the regional governments of Benishangul and Gambella. The land is the key asset the investors provide as collateral to take the loan from the bank.

After the investors fled without paying the loans they took, the DBE has to acquire the lands, since it is the collateral. Once we finalize acquiring the lands, we will transfer it to other investors. Then we will recover the previous loans.

I heard the Benishangul and Gambella regional governments are demanding it pays taxes on the lands?

We reached agreements on some of the lands in Benishangul. There are ongoing debates on the amount. The bank agreed to pay the tax, if it agreed on the amount. The regional governments usually give one plot for multiple investors, so one certificate is given to multiple investors. The regional agriculture bureau has been reporting to us that the lands were being cultivated by the investors, which was false.

In general, rain-fed agriculture and textile investments have bled DBE.

For instance, Ayka Addis’s investor used informal channels to get the loans, instead of going directly through the bank. It either goes through the PMO or other officials. Solving all this was not simple.

Most of DBE’s clients were unruly. They had the right to take the loan, and the right not to pay. So we disciplined the clients first, and reversed the bank’s practice of negligence. All this was done in three years.

How much is the land leased for the rain-fed projects?

The rate depends on the regions. Basically, tax, lease and anything related to the land is handled by the investors. But since the investors went bankrupt, and the DBE took the lands, now the bank has to pay them. This is the reason why the regional states are asking DBE for the taxes, because it is under the bank now.

The investors who took the land in regional states for commercial farming, left, and the tax holiday period is over. So regional states are now claiming the taxes and the DBE agreed to pay. This is the game.

Did the Gambella commercial farms failed by design?

The loan was supported by policy. The policy of initiating commercial farming and modernizing the agriculture was not wrong. So the DBE prepared policy and procedures.

The major factor for the failure at that point, was the decision to give loans for rain-fed agriculture. This was a mistake because the investors knew the loopholes and abused the loans and failed to return it.

The DBE is on the right track now but business continuity is more critical.

What are DBE’s sources of funds, after the NBE’s 27 percent T-bill is replenished?

The NBE introduced another bond this year, in which banks channel one percent of their loan portfolio to the DBE. In the past six months, a bit more than 10 billion birr has been channeled to the bank from this new scheme. Once we start from insurances, these two schemes will become our biggest source of funds.

The GERD bond and loans from international banks also generate finance. It also accesses external funds like SME loans, through the MoF. DBE’s T-bill is almost zero currently.

How much is the loan interest the DBE is paying currently, when will the rest mature?

The DBE pays interests by adding two percent on the saving interest, which means nine percent. On the other hand, DBE’s interest rate is between 11 percent and 12 percent, the least being for import substituting projects. The margin covers its administrative cost. So the bank is able to pay all its interests duly.

DBE requested to put Tigray NPL’s off its balance sheet. But NBE officials told The Reporter that it is not going to take it off its balance sheet.

If Tigray’s NPL is put-off DBE’s balance sheet, DBE’s NPL could be 12.5 percent. But including the Tigray NPL, which is 10 billion birr, the NPL stands at 30.4 percent. What we are saying is this 10 billion birr in NPL happened by factors out of DBE’s control. We are not asking the NBE to cancel the Tigray loan.

We undertook a detailed study on how the NPLs could be taken off the balance sheet, and presented to the NBE. We do not know why NBE is silent on the issue. The CBE also requested the NBE to take off two billion birr off CBE’s balance sheet. This was also studied and presented to the NBE.

The NBE first said the request should be processed by the Bankers Association but the issue is still in the process. It is illogical to keep inactive numbers on banks’ balance sheet. When unrest occurred in Oromia over the past few years, the NBE allowed loans of affected investors in the region to stay off banks’ balance sheet. The same can be done for Tigray. It is not a big deal. It is NBE’s decision but I do not know why it is reluctant when it comes to Tigray NPLs. Tigray NPL does not represent DBE’s actual performance, which is outstanding.

DBE’s outstanding loan is 63.4 billion birr. Total NPLs stood at 19 billion, of which 10.1 billion birr is created in Tigray since the war. The president of DBE requested to exclude the Tigray NPL but PEHA does not agree, unless the NBE approves it.

Another investor is negotiating to buy Ayka Addis. Will this be the last negotiation?

A number of potential buyers have been trying to buy Ayka Addis in the past but failed. Especially a Chinese investor was very eager to acquire Ayka Addis. Any potential buyer is expected to contribute 50 percent of Ayka Addis’s portfolio. For instance, the initial investment loan was USD 1.7 billion so the buyer is expected to contribute half of it. But the Chinese lacked capital so it requested to contribute only 10 percent of it, which means around USD 200 million, so we refused because we cannot breach the 50 percent law.

If Ayka Addis is sold, DBE’s NPL will drop to around 15 percent, from the current 30.4 percent. Ayka Addis is holding a huge loan. The principal loan is 1.7 billion, a decade ago. Including the interest, probably it is around USD three billion by now. The value of the machines, factory building, raw materials when the DBE received Ayka Addis, is valued at USD 1.79 billion.

By the way, we are still paying the salary of 4,500 employees of Ayka Addis, though it has not operated for years now. It is between 13 million birr and 14 million birr every month. We cannot abandon the employees, after the Turkish investor left. We are carrying all this cost.

There were also other alternatives for Ayka Addis, other than selling it.

There were three major options tabled. The first is selling to a capable investor or buyer. The second is operating Ayka Addis under a management contract, just like Elsi Addis and the third was repurposing Ayka Addis into an Industrial Park. Some three potential investors have been negotiating. The Chinese came last.

Currently, another negotiation is underway. We hope this will be the last one. It is a consortium of local and foreign investors. We will disclose it when it materializes. Ayka Addis’s operation ranges from cultivating cotton to sewing the clothes. It pins the cotton, dyes it, and makes the clothes. It is an end-to-end project. So the potential buyer is expected to specialize in all these value chains.

Will the new buyer pay Ayka Addis’s accumulated tax?

Under Ethiopia’s law, a company does not pay taxes if it declares bankruptcy. After the DBE took over Ayka Addis, the tax authorities are saying Ayka Addis must pay tax, since it did not undergo liquidation. Ayka Addis was not operating for the past eleven years. So, the tax authority is asking for back-taxes for all these years, stating the project did not declare liquidation. So we are arguing with the tax authority.

But the DBE declared foreclosure?

When the Turkish investors left and the DBE started managing Ayka Addis, the tax authority started asking for tax.

Amazingly, Bmet cables, one of the Turkish investments abandoned after taking huge loan from the bank is a good example of how much Turkish investor’s exploited us. Under the Turkish investor, Bmet cables utilized 40 percent of operational capacity but they were not paying their loan.

Now, the local buyer, Tadesse Admasu of Red Star Trading, is operating at 12 percent of its capacity due to different reasons. The buyer acquired Bmet paying 890 million birr. Now, it has paid all the loans owed to Bmet.

How much has Ethiopia lost because Turkish investors left the country without paying DBE loans?

Before, their equity contribution was 30 percent. This means the DBE contributes 70 percent of the investment. Under the previous ratio, a Foreign Direct Investment comes with USD 30 million, and takes 70 million. The foreign investors left without paying the 70 percent loan they took from the DBE. But now, we adjusted the equity contribution to fifty percent, for foreign investors. Local investors pay 20 percent.

FDI is needed to bring technology, capital, forex, and create jobs. It did not meet any of these targets.

One of the other loopholes FDIs has been exploiting is that they highly under invoice export price. They usually have subsidiaries or a mother company operating abroad. So they export the clothes to them, with fake price documents. These investors also import raw materials only from those mother companies or subsidiaries abroad. The FDIs operating in Ethiopia do not want to use local inputs. They export t-shirts with USD 60 cents from Ethiopia. But the buyer abroad, which is affiliated to the FDI, resells it at a much higher price. So the FDIs generate meager forex for Ethiopia. Their bank statements also indicate loss, always. Especially the expats brought by FDI are highly abusive. Bmet’s former CEO has been paid 500,000 birr in salary monthly. This is excluding housing, vehicle and other accommodations. Now we decided to reduce expats inflow.

That is why, just when we started being strict on Ayka Addis that the Turkish investor’s fled Ethiopia immediately, without handing over the project’s properly. I think they left for Burkina Faso.

Are there new public financial institutions planned to be established, particularly to finance long term development projects?

Four years ago when the bank was in deep trouble, we conducted a study to determine its fate. One of our alternative recommendations in the study was to breakdown DBE into three different policy banks; into an industry bank, agricultural bank and an SME bank. Finally, a decision to reorganize and reform DBE as it is was made. In the meantime, we conducted a study to renovate the bank; the ATA was also making moves to initiate the establishment of an agricultural bank.

The initiative to establish a stock market was also conducted by us. We have been trying to convince the government to establish a stock market for the past eight years. It is only realized under Abiy.

Now, the importance of an independent agricultural bank and investment banks is imperative for Ethiopia. In line with the agricultural bank, agricultural insurance and micro-insurance firms are necessitated equally. These firms protect the loans provided by the agricultural bank to farmers.

We conducted the “Proposal of restructuring public banks” in 2014. The proposal included the recommendation to determine the fate of the former Construction and Business bank (CBB). We did not just demolish CBB without a proper study.

The same studies have later been modified for the DBE. The modified study also recommended the vitality of Agricultural Development Bank, and mortgage bank (construction bank). The plan is for the CBE to stop mortgage financing, and transfer the role to the new Construction Bank (CB). In fact, the proposed CB partly takes on the role of the now defunct CBB.

Currently, we have established two working groups at i-Capital Institute, studying on investment bank and the agricultural development bank each. PEHA has the mandate to give birth to new public enterprises, apart from managing the existing ones. It can also decide on mergers, and dismantling of SOEs.

As long as Ethiopia is progressing from an agrarian economy to manufacturing, a stock market is very essential. If we need more robust manufacturing companies, we must build a robust stock market, where the companies are listed, float shares, and mobilize capital. A manufacturing industry cannot grow without a stock market.

The banking sector fears to give loans to manufacturing industries because the banks fear losing their saving capital. Once the stock market is active, the interest in banks will drop. But the stock market will grow faster, hand in hand with manufacturing.

I hope the establishment of an agricultural bank is realized soon. Ethiopia has an agrarian economy. But the economy is currently distorted, as the service sector constitutes the largest portion of the GDP. In a bid to transform Ethiopia’s economy from an agricultural to a manufacturing industry, agricultural development bank cannot be an alternative. Agriculture is not developing due to lack of finance, fundamentally.

The agricultural bank also needs an insurance firm, to cover the risks of the loans. The bank finances tractors for the farmer, and then the insurance firm insures the machines as well as the harvest. It is highly imperative that agricultural development bank and investment banks are essential for this country.

A secondary market cannot operate without an investment bank. Since we are nearing the establishment of a stock market, we also need to establish an investment bank.

For instance, banks are planned to be listed on the stock market. The investment banks will study the banks, as well as other IPOs, inside out. So, the investment banks determine the exact value of shares, and securities. This means IPOs, including commercial banks, cannot determine the price of their shares by themselves, unlike now.

The underwriter preserves the interest of every stakeholder, investor, IPOs, and others. It sets standard but the investment bank cannot be listed on the stock market itself.

Once the two working groups wrap up their studies, the documents will be reviewed by stakeholders. Then, we will present the final documents to the government to decide on whether to drop or implement the study’s recommendations.

A few years back, we travelled to Nigeria to visit their central bank and development bank and took three months of training. I was amazed by their Islamic insurance. We extracted lessons and brought it to Ethiopia.

The government is saying the banking industry will be opened for foreign competition very soon. What is your take on this?

Before, we have been asking the government to open the banking industry. But recently, we have changed our perspective. We prefer the government to delay the opening up for now. I precisely know the exact capacity of each local banking institution.

Before, our assumption was that local banks will merge, at the face of an open up. So we have been advocating for it to open, at each meeting and financial summits.

Basically, banking and insurance businesses in Ethiopia is a captive business. The banks are formed either under religious, ethnic, political sentiments or other bands. So, Ethiopian banks and insurance companies lack the business mentality. If they had a business mentality, they will work with anyone who has a viable business idea. So I believe the government must delay the sectors opening up.

The NBE recently said mandatory merger and acquisitions will be forced on local banks, when the sector is opened up.

That is inevitable once the industry is opened up. Of course mergers can happen even before the opening up. For instance, the NBE raised the paid up capital to five billion. Those who failed to meet will have no option but merge. The NBE can also raise the reserve let’s say to 25 percent, from the 10 percent currently. Many banks could have merged. This way, competitive banks could be created.

Western banks, especially Europeans, strongly pushed Malaysia, Korea, South Korea, and Thailand to open up their financial sector. Once these Asian countries opened their financial industries, the western banks withdrew after joining the sector. The Asian economies were hit by financial crisis as a result.

But eventually the Asian tigers avenged the western banks. The 2007 financial crisis hit western banks, because the Asian tigers suddenly raised their banking capital. They intentionally gave more loans to American banks. Then the American and European banks disbursed those loans to mortgage, and small businesses. The western banks failed to pay their loans to the Asian tigers, taking revenge twenty years after the western banks played foul.

We do not need such turf wars.

The only reason Ethiopia’s economy is doing well after the war in the past two years, is because our financial industry is closed off. Our economy survived because the banking sector is not open.

If banking was opened to foreign competition, the economy could collapse, under this war. And had it been opened before the war, the economy would have collapsed by now. Foreign banks simply close and leave, when there is a war.

Many people say the banking industry should be opened. That is wrong. They do not know the exact capacity of local banks in surviving foreign competition. I have no confidence even in the CBE.

The CBE has a huge NPL owed by the government. The government owes over half a trillion birr. Unless it is fully paid, CBE will face many challenges.

So, I insist the banking industry should not be opened at least in the next three to four years. Local banks need up to four years to prepare. Mandatory merger is simple.

When the Home Grown Economic Reform was launched in 2019, the government promised to reduce the states hand in the economy, and reduce the pressure on CBE and domestic credit. Is there any progress?

The CBE is not giving loans to the government now. State pressure is reduced. The CBE has studied new organizational structure, and is implementing new business strategies. Before, especially during the previous regime, state banks give loans as if it is a budget. They do not collect the loan.

Do you follow up on CBE’s branches abroad?

We evaluate them during reporting. The bank has branches in Juba and Djibouti. The Juba branch is performing very well but the Khartoum branch was suspended while in the pipeline.

Did the CBE move from PEHA’s supervision, after it is placed under the EIH?

Currently, the CBE is in transition process, from PEHA to the EIH.

I heard SOEs will be categorized under three supervisory institutions according to their performance. These are the EIH, PEHA, and the LAMC. Is that true?

What I know is that there are SOEs going to the EIH, and the rest will remain under PEHA. The LAMC by itself is an SOE and is under PEHA’s supervisory. LAMC is under my supervision. The CBE, DBE, EIH, LAMC and national lottery, are under my directorate.

The EIH has recently on-boarded 27 SOEs, out of the 36 SOEs under PEHA. Does that mean they are completely out of PEHA?

The investment part of SOEs goes to the EIH, while the enterprise management aspect remains under PEHA. But so far, there is no definite decision on whether the selected SOEs completely move to the EIH, or partially. This is decided by the macroeconomic team of the PM.

Will all SOEs be listed on the stock market?

The plan was for the SOEs to list a certain percent of their value on the stock market. If SOEs like ET, ethio telecom and others trade 10 percent of their portion on the stock market, it builds the public’s confidence. But SOEs must meet stringent financial reporting systems.

I also hear that five percent of ethio telecom’s share will be sold on the stock market. SOEs that meet the right financial reporting system will be able to float shares on the stock market.

People are facing difficulties acquiring houses because real estate companies collect money from house seekers and disappear. The stock market will also solve this. Everything will take shape under the secondary market.

The government is allowing the establishment of new banks in the last two years. But lately it confirmed the opening up of the banking sector for foreigners. Isn’t this sending mixed signal?

Mergers can be done at any time. Then local banks can consolidate and ready for competition. PEHA is exemplary in merging CBB with the CBE six years ago. Private Banks must follow suit.

Local banks are in a comfort zone, registering lump profit, not because they are providing a class service. They are profiting because they are protected. Under state protection, they do not have to improve service. They survive at the expense of the client. Millions are saving in bank but only a few thousand get loans. All of this will change, once foreign banks come.

Yesuf Ibrahim is a founding member of the National Movement of Amhara (NaMA). He worked as the head of the strategic sector in the earlier stages of NaMA’s establishment. After its establishment, he worked as the head of the strategic sector for two years. After serving the organization as a vice chairman, he is currently working as the head of the party’s legal and ethical regulations and as a manager of the government’s property management authority. He received his LLM degree in law from Addis Ababa University and has worked as a law lecturer at a university. The Reporter’s Selamawit Mengesha sat down with Yesuf on issues concerning the party, region and the country at large.

The Reporter: How would you describe your participation from the time you first started working with the government as an opposition party, and the process until you became the manager of the government’s property management authority?

Yusuf Ibrahim: I have been heavily involved since the establishment of NaMA until its present stage. NaMA’s ideology is not an organization that paints itself as a liberator. It is synchronized with the people and the country.

Because the Amhara people have special problems and are being attacked by the constitution and narrative, protecting the people is one of the political targets. However, we have come to the historical notion that the attack on Amhara people is not something that has a special historical origin but an effort to destroy the country by making the community a victim.

The movement is one that could be traced back to colonialism. Weakening the beliefs, values, and social status of this community can be a way to destroy the country. Its origin is a colonial idea. Because of this ideology, a number of internal anarchist institutions were created.

By establishing such organizations, a political party based on identity has been established over time to save the Amhara people, who have suffered a lot. When the government moves into the phase of “change”, it is important to try because “change” has not yet been seen. When we look at the power alignment in Ethiopia, it is not a place where NaMA makes friends easily. In the course of time, after studying the intricate web of power, we analyzed the power that could become the friend of the enemy.

Compared to that, even if we can’t get along with everyone, we can work with anyone. As for figuring out to what extent and with whom, there are those who are known for backstabbing, so that’s a start. It was a timely analysis that was not particularly favorable to the Amhara. Therefore, it was established to fight anti-Amhara organizations.

Currently, even though it is an institution with many problems, we have an organizational position supported by a strategic document that we must work on together with the government. In general, it is necessary to work together with the government. When elections were planned to be held during COVID, there was pressure from many political organizations. Working together with the government was our own initiative.

We asked ourselves how we could safeguard the long-term interests of our country and people. We are a political organization and we take a position based on who we believe will betray us. We do this within the bounds of the law. It is necessary to work together with the government. They did not try to make it as big as NaMA, but there was pressure from other parties to make NaMA a part of the government, but the government did not want that. Regarding this, we explained to them that Prosperity is a traditional government.

This showed that the government was not proactive and did not identify its partners. As a party, it contributes greatly to the work of saving the country. We believe that we have especially united the people.

During this process, there was a conflict in the nature of misunderstandings between various issues, and because the problems of the parties and the government were not resolved quickly, it started to turn into a war.

With all of that happening, it was important to work with the government during that period. But keep in mind that working together with the government does not mean that we are the government but, in some cases, groundwork needs to be done. We had the idea that politics based on cooperation, not competition, was best suited for the landscape of the country.

Since the NaMA did not have a clear idea about working with the government (that is, we joined the government while the country was at war), we discussed it twice with the government when the issue was raised.

The matter has been tabled at the executive level. But it was fundamentally ignored by NaMA.

When the authority was given, I was called on the phone. I arrived in Gondar at 5 o’clock in the morning and was told that the appointment would be at 7:30. They have their own reasons for doing so. Since the appointment process was during the war, it was completed in secret until the end so as not to overwhelm the government.

On the side of the Prosperity Party, there was a bit of a misunderstanding because I received a call from the Addis Ababa city administration and then, on the same day, I received a call saying that they were looking for you for an appointment in the Amhara region; I made my own decision and chose Addis Ababa.

There is no problem with opposition parties working with the government. In Ethiopia, the process of democracy should gradually develop over time. Democracy needs to be improved by learning to work together.

In fact, it would be great if NaMA worked with the government. It would have been helpful if the lower level of government was more involved in areas such as kebeles and districts.

I made a proposal that if the government does not give us authority on the lower structure, we should give up big authority positions. But the party was not unified and could not consider the proposal.

NaMA is a party established to represent the people of Amhara. The Amhara people want you to be the voice of your party in any way. Working with the government means leading a multi-ethnic population, and haven’t you faced challenges in the middle?

This is also an issue of the reform process that the party intends to follow. The reform will work to clarify which level and which concept we are working on. There might be some changes in concept with the change of leadership.

It is about continuing to explore our strengths and solving our problems. The government does not exist only through the executive branch. The government has three branches and includes Parliament in the constitution.

We have representatives in the federal parliament in the state. The relationship between the party and its members at the top should be defined. As a party leader, when we work with the government, it must be based on the party’s principles. If I am going to move in that way, we should either leave the party or leave the leadership of the government.

There should be a strict procedure. In the current state of affairs, the federal structure that our party and the country are led by all is based on ethnic lines.

The constitution itself rarely even uses the word “citizen.” We want this to be liberal over time. We follow the philosophy that individual citizens should be the foundation of democracy. We want our organization to be a center for correcting the many mistakes made by extremists.

It should not be restricted only to Amhara. It should also be connected with other communities. Once this is fixed, the Ethiopian status will be announced. We believe that when we work as a party and as Amhara, we are operating as Ethiopia.

The Amhara community is the Ethiopian community. It has been pushed by many things. We are not saying it should be paid by revenge. We only remember the past to be able to fix the future. We do not believe that our people would be harmed if equality and freedom prevailed in Ethiopia. This is a modern principle. I do not believe that I am an advocate for the politics of a community at any time. As a company, we believe that we work for all Ethiopians.

It is one of the pillars of our society that it should not be affected by special circumstances. We want to be seen from the Ethiopian perspective. We do not want to separate Amhara. We want it to be governed by justice along with its fellow citizens. Amhara is affected in the same way that the rest of society is, but the incorrect narrative that has developed over time must be corrected. The question of who is the representative of political philosophy is bound to arise. Since NaMA is of Amhara origin, it is organized accordingly.

It is necessary to adapt to solve this problem for the time being. I think NaMA can adapt to all the parties. While working here, I am color-blind. I have neither the capacity nor the desire to take sides by saying who belongs to which nation. I also do not share such political views. We think that the perceptions created on us by the TPLF is in conflict with the people of Tigray. This is because the TPLF has been equating itself with the people of Tigray. But we still see their segregation. We believe that the TPLF is a criminal group. During the century, narcissistic institutions were created to hold back society and live for profit.

A while ago, it was tiring to find the issues that separate the people of Tigray and the people of Amhara. It was bound by various social, geographic, religious, and economic ties. We have to solve the existing problems with different justifiable methods. As it is known in Ethiopia, we do not accept ethnic politics. Therefore, I am running the people’s question in alignment with the government’s work.

Is there a division between the leadership of the government and other members of the party? What kind of situation is NaMA in right now?

Currently, changes are made every time political dynamism changes. The struggle is that when more energy is needed, society needs change. We have gone through many problems in our struggle for organization and society.

As the country’s problems continue to expand, members of the family are always at war. Therefore, leaders and members do not meet regularly. NaMA’s children are dying on the war fronts.

Don’t ask me how a peaceful party can fight with weapons. Since the declaration of seclusion, there has been a call to participate in the war. War has been waged on the Amhara people directly.

There are NaMA members in Raya, Wolkait, and in all the districts where there were members that were killed while in command of the brigade. There are several fighters in the structure. Therefore, the central one, the one at the top of each leadership, and the one at the bottom are not formally connected; we are connected informally.

During the second round of fighting, the party did not have a central committee or executive meeting for four months. Many gaps were created during that time, and it is not possible to update regularly. Politics brings the change of opinion closer to you when you meet and update regularly.

However, the more it is separated, the more the case is defined. So far, we’ve been supporting the idea that had majority support in debates. I have never seen a decision made without the approval of NaMA members.

Because we do not meet regularly, we have lost the opportunity to make decisions through debate and consensus. There were talks of NaMA coming into government appointments without the party’s consent, but in the process, although there were violations of discipline, the matter was adopted at the central committee level and this concept of working together will hopefully continue in the future.

The forces that wanted change were created in NaMA. First, there was a question that you should not lead the party part-time while in government, as the party requires a full-time dedication.

We will restructure. The party is a movement, and a movement needs to open up. It is not just a random party in power. Until the struggle reaches a certain level, the movement will open its doors and attract new talents, and it is not feasible to say that I will remain on the throne of the establishment once it is over. It is not correct, and it is not the principle of our struggle either.

People feel worried if there is no open discussion. There will be people who want to make the party a powerhouse. But in the end, the contradictions could not be easily reconciled.

On the other hand, it has shown differences in the way we see politics. But it is only in the top management that the difference should be noted. A certain difference was created between the Central Committee and the Executive Committee with only 10 to 20 people. There is no difference in the bottom structure of the broad members.

Due to Bahir Dar’s protest, I resigned on my own accord and changed from the position of vice chairman to the law department. What the party wants is not the change of one person or two. They say the movement wants to change from top to bottom. And this is their right.

An inquiring generation should be encouraged. There were misunderstandings with the top management. It deviated from NaMA and the general concept of democracy, which did not accept the reform and were going through a process that did not encourage internal democracy.

It is not a question of whether we like or hate individuals; it is a matter of history. It is the struggle of our people. It doesn’t define division for me. It is fundamentally settled by law. The structure is not split.

The main foundation is structure. I don’t think that the creation of division in the leadership of two or three people will divide the structure. We intend to hold a general assembly by October, which will hopefully restore NaMA.

Will the party become more organized by resolving the controversy within NaMA?

NaMA will come prepared. This happens at any party because it is a massive collection. The party needs time. The fight will then go into negotiations. The negotiation will be based on the concept of transitional justice from our point of view. There are a lot of processes that go through both material and human life. All of that should be resolved.

Politically, where are we going? Where are we going as a country and what is our collective ambition? NaMA must be prepared for this soon.

There are those who have applied what we brought as an idea to Ethiopian politics, which shows NaMa’s power to exert great pressure. After many pushes, debating and explaining to the people of Ethiopia, if politics is about to bear fruit, it will not happen unless the party exists.

There may be individuals with egos within the party leaders. They should be dealt with on the inside first. We were hoping that it wouldn’t show on the outside.

Most of the leadership and central committee members have petitioned the General Assembly’s request. A petition has been filed for reform. Yet undisciplined work is being done against the will of the people and the structure of the organization. That should be corrected. They are all being looked at from every angle.

Let us come to the current national issues. We have been at war for the past two years. Various efforts have been made to resolve the war peacefully, but another war broke out. Can you explain to us the whole political process and what Ethiopia’s politics should be in the future?

NaMA wants Ethiopian politics to be based on citizenship. Ethnic politics means a gathering of extremists where everyone who is offended hides. The TPLF and ONG should be held accountable for the Ethiopian-ism they attacked. It is a country known for caring and living together. Politicians must engage in a certain strategy. The structure should not be manipulated as intended.

NaMA will always cooperate with forces that can weaken the TPLF. As the TPLF has been in politics for a long time and has led the country, it must correct the mistakes of the past by deciding which is the most viable path for the future. They could not think of a way that would benefit the people of Tigray, whom they think they represent.

I do not think that the separation of the Amhara and Tigray peoples, a society that has lived together for many centuries and is bound by religion and culture, will achieve the goal. The people of Tigray must show that they are not enemies to the Amhara community.

During the war process, NaMA has been doing many other things by standing with the defense force, delivering food and coordinating with the diaspora. When the Amhara region was in battle, it gave studies on why they should fight for a purpose. It was heavily involved throughout the war.

How and under what conditions do you think the negotiations should be conducted?

Conflict always ends in negotiation. Even if the TPLF itself thinks that we should be divided, it knows that they will lack both resources and manpower. The TPLF should not go any further on the path of brutality and revenge. Ethiopia should follow the liberal approach and solve its problems. The war against the TPLF was not for revenge but was brought on by themselves.

In my view, I want transitional justice to happen. It is not because I believe transitional justice would calm everything down, but because it is an option. Justice is being served now, not for revenge but to bring harmony and move forward.

Negotiations should be conducted for the sake of peace and justice, with the decision that it will not happen again in the future and that what happened in the past was not right.

But in Ethiopia, it is seen that negotiations are used as a plot resource. It has been observed that only if the power to be negotiated is dangerous and one party wants to survive, is the proposal submitted for negotiation.

That is why I am afraid that the proposal presented by the TPLF might be some sort of treason. The deal requires a genuine broker. Since the war will inevitably end in negotiations, it all depends on who comes up with the better negotiating package. There is a risk that the negotiator who believes in violence may resort to violence at the negotiating table.

The TPLF should not exist as a political force. It is difficult to say that the TPLF is deceiving all these people with mobilization. I think most of them believe it. While the party was scattered, the individuals in the party lined up, reorganized, and attacked the defense force.

Such regeneration should not be ignored. The security guarantees should be adjusted and then they can enter into negotiations. A ceasefire is one way it can be done. But beyond that, there must be other stakeholders. The negotiations that should have been entered into after the collapse of the Derg left us in the situation we are in now. I believe that the Amhara region should have a negotiator on their behalf.

In the end, it should be known what level our politics should be at. Any person should be able to go and live in the area they want without being displaced from place to place because of ethnicity.

The TPLF has the capacity to rebel, not organize and re-enter. War itself should not be based on ethnicity. Who will benefit from this war?

There is no need to pretend like there is a war between two different countries. Both must work together. The negotiations must be conducted in moderation. Negotiations range from a ceasefire to a new proposal.

Although the African Union has little experience, it must mediate. They should all enter into the negotiation with good intentions. The very idea of secession is unethical.

To allow foreign banks, the banking proclamation, banking service code and the investment regulations must be revised. Especially, the code must allow banking for foreigners. The existing commercial code allows banking and insurance only for Ethiopians. Non Ethiopians cannot be investors, or operators.

Do you think the financial sector will be opened before five years?

I think so but I prefer it being delayed. All banks are giving loans to the service sector. Manufacturing and agriculture cannot grow unless we have banks that can give loans for long term projects. There are no consumer loans too.

Insurance companies complained over NBE’s order to direct 15 percent of their profit to DBE bond.

The rate has been reduced lately and the insurance companies agreed.

We must draw lessons from countries that have bridged the gender gap successfully. In some institutions, they say there are no women qualified to be board members. That is wrong.

Circulation of privately-owned papers is small and usually limited to Addis Ababa. Readership numbers are low.

A number of newspapers are now available online.

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Media and Communication Center (MCC) a private limited media company established in 1995. Headquartered in Addis Ababa, Ethiopia MCC is the publisher of “Reporter” a bi-weekly Amharic, “The Reporter” a weekly English newspaper, a monthly Amharic and English magazines in both print and electronic versions.

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ሪፖርተር ዜና Media and Communication Center (MCC) a private limited media company established in 1995. Headquartered in Addis Ababa, Ethiopia MCC is the publisher of “Reporter” a bi-weekly Amharic, “The Reporter” a weekly English newspaper, a monthly Amharic and English magazines in both print and electronic versions.

Mission and Vision

The Reporter’s motto “Free Press, Free Speech, Free Spirit” expresses the ideal of freedom that, journalists and editors, hope to enjoy and promote professional journalism.

MCC believes that it has responsibility to readers, the public, the people in and outside Ethiopia who rely on Reporter for news.

Each week we bring to the public critical stories without fear or favor and guarantee that our editorial choices about what to print are based on the importance and relevance of the topic to our country along with journalistic qualities. We refrain from any political, economic, or other unethical motivations.

We dedicate ourselves to help our readers in their effort to become an informed citizenry by giving as much information as possible.

We serve as a platform for the public’s thoughts, opinions and ideas by soliciting, accepting, reviewing and publishing letters and comments.

We intend to make our newspaper a model for those in our profession, a guide for novices.

Circulations and Reach

MCC distributes the newspapers and magazines to all business companies, governmental offices and non-governmental offices in Addis Ababa and all regional cities through subscription as well as street vendors.

Readers can access our news on our websites www.ethiopianreporter.com and www.thereporterethiopia.com

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Policy caps foreigners’ acquisition in local banks to 40 percent

Local banks have less than one year to prepare

With an additional five percent stake allowed each for foreign individuals and foreign non-bank investors, the maximum stake local bank can sell to foreigners is capped at 40 percent.

Nigeria has confirmed that Ethiopian Airlines has been chosen as the core investor and partner for the country’s new flag carrier. Nigeria Air has been in the works for a while now and has slowly been approaching a full launch, pending support from partners. Ethiopian is Africa’s largest carrier and has shown a willingness to invest in new startups recently.

Foreign banks are allowed to acquire up to a 30 percent stake in local banks, according to a policy document approved by the Council of Ministers last month and obtained by The Reporter.

With an additional five percent stake allowed each for foreign individuals and foreign non-bank investors, the maximum stake local bank can sell to foreigners is capped at 40 percent.

Licensing foreign banks and implementation of the policy is slated to kick off in one year’s time from the ratification of the Banking Business Proclamation, whose amendment is already underway.

The highly confidential policy document has been off limits. The policy also excludes insurance and microfinance from the open-up initiative. It allows foreign banks to open a subsidiary firm and open branches in Ethiopia, besides giving an option to buy shares in local banks.

An NBE official that spoke to The Reporter confidentially stated that the window period for local banks until the liberalization takes off might not necessarily be one year.

“The Amendment to the Banking Business Proclamation is finalized and ready to be sent to the Council of Ministers. Most certainly, the proclamation will be approved in the current 2022/23 Ethiopian fiscal year. The licensing of foreign banks will start after the amendment of the banking business proclamation is finalized,” the official said.

The official believes that once the proclamation is amended, regulations and directives will follow, which can take six months or a year.

“We cannot say definitely that a bank will be opened up one year after the proclamation is finalized. It depends on our pace of finalizing the proclamation and the regulations and directives required to implement it,” the official added.

Foreign banks are also authorized to open a commercial representative branch in Ethiopia, a permit that was already given to some multinational lenders like Standard Bank, Egypt’s Commercial International Bank (CIB) and KCB Group.

The opening-up policy document was not revised after the Council ratified it. Comments forwarded by the Council are also not included, according to The Reporter’s sources.

The NBE will decide on the majority of the details regarding the implementation of the opening-up policy with the details to be stated in the upcoming proclamation, regulations, and directives, according to the NBE official.

“The policy is more of a broad perspective. Foreign banks, individuals, and strategic investors are allowed, but the exact ratio will be determined. Changes to investment regulations are not always necessary. The banking proclamation is sufficient by itself,” added the official.

Local banks are already in hot water since the Council of Ministers disclosed the approval of the open-up policy last month. Presidents of local banks The Reporter talked to, who did not have access to the policy documents so far, argued most of the decisions stated in the policy document.

“Of the four modalities, subsidiary and branch will have no benefit for Ethiopia. They are the biggest lunacy of Ethiopian government decisions. They will neither bring foreign currency nor improve the efficiency of Ethiopia’s banking industry. The government is wrong to assume local banks lack corporate culture and skills. I am sure if academicians and banking practitioners see the policy document, they will not approve it,” said a private bank president with two decades of experience.

He says the government committed two major breaches. “First, the government did not identify what it was really seeking to do to open the banking industry. Is it foreign exchange revenue, access to finance, efficiency, technology, or others? Then the government should have done intensive studies to determine which venue is suitable for that objective,” the bank president said.

“Secondly, the government did not discuss it with local banks and other stakeholders. The NBE did not discuss anything with us. The policy document is still kept a secret even after the Council approved it. It must be posted on the council’s website as soon as possible,” the president added.

Another bank president appreciated the decision to cap foreign bankers’ acquisitions. “Capping maximum equity local banks can sell to foreigners to minority shareholding ratios is very good. It will protect local shareholders and maintain the rights of local bankers. The issue with this equity acquisition is that there is no system in place to assess the value of local bank shares.”

“Since there is no stock market in Ethiopia, valuation of local banks is done traditionally. None of the local banks are listed on any stock market. The existing share market valuation system is traditional. Currently, shares of each of the local banks do not reflect the exact values. So there must be a new valuation system,” said the bank president.

On the other hand, he contends that valuing local banks at a time of peak birr depreciation will be detrimental to Ethiopia but beneficial to foreign banks and investors.

“The valuation will be high in terms of birr attributable to the devaluation. But in terms of dollars, the value is not large. Therefore, foreign banks and investors can acquire the stakes at a cheaper price in dollars. The injection of foreign banks into local banks will escalate inflation in Ethiopia because foreign investors will buy the shares with forex. But that forex is injected into the economy in birr, which is high in number. So the immediate impact of the banking opening-up will be higher inflation. I do not understand why Ethiopia keeps devaluing Birr,” he added.

The bank president also appreciated the one-year window period for preparation but questioned why private local banks have to work with the NBE to devise their competition strategy.

However, all the bank presidents rejected the government’s decision to ratify the open-up policy document without consulting them.

“The NBE did not even discuss with us the Banking Business Proclamation amendment underway, let alone the new policy. Many laws were introduced without consultation with bankers and have proved harmful to us. I understand the political and diplomatic benefits of this policy, which is why the Council hurried to ratify it without consulting us,” added the banker with two decades of experience.

For him, the policy is made to appease western countries, which are pressuring the government.

“Banking opening up is not as simple as opening up telecom, aviation, or any other sector. Ghana and Kenya sold their banks and became poor, overtaken by India, Pakistan, the UK and other countries’ banks. Many other countries, including in Africa, opened their banks after intensively deliberating on it and preparing a detailed catalogue of the modalities,” said the banker. “Nigeria, Ghana, Kenya, South Africa, Morocco, and Egypt all opened their banking sectors after much deliberation. Not all of these countries were successful after opening their banks. Unless wisely managed, this opening up will also make Ethiopia poor,” he added.

Ethiopia has canceled its contract with a Chinese company exploring oil and gas in the country since 2013, the government announced on Wednesday.

Takele Uma, Ethiopia’s minister of mines and petroleum, said the deal with Chinese firm Poly-GCL was called off because of its “financial and organizational inability” to develop gas in the Ogaden Basin, a resource-rich area in eastern Ethiopia, according to state-affiliated news agency Walta.

The report said Poly-GCL was issued a letter of ultimatum in March that listed several conditions for the company to fulfill.

“In accordance with the successive notices the Ministry has issued in the past and in full compliance with the PPSAs and the laws of the land, the termination has now been fully effected,” Takele said on Twitter.

“As long as the financing that would enable to develop the oil and gas fields the Ministry is open for mutual and expeditious settlement,” he added.

Takele had previously hinted that Poly-CGL’s contract would be terminated, saying that Ethiopia was actively searching for international companies that could develop the Ogaden’s confirmed reserves of 7 trillion cubic feet of natural gas.

Nigeria has confirmed that Ethiopian Airlines has been chosen as the core investor and partner for the country’s new flag carrier. Nigeria Air has been in the works for a while now and has slowly been approaching a full launch, pending support from partners. Ethiopian is Africa’s largest carrier and has shown a willingness to invest in new startups recently.

Ready to take off?

According to ThisDay, Nigeria’s federal government has formally chosen Ethiopian Airlines (Ethiopian) as a partner for the long-awaited Nigeria Air. The deal includes a 49% equity share for the airline, joined by 5% from the government since the project is set to be private-public. Notably, Ethiopian is sticking to its policy of not investing cash into a new business.

Instead, the airline will leverage its technical prowess, an abundance of aircraft, and management skills to establish Nigeria’s first flag carrier in years. While yet to be formally confirmed, an initial pool of pilots is set to arrive in Addis Ababa for basic training for certification on the Boeing 737NG.

Nigeria has confirmed that Ethiopian Airlines has been chosen as the core investor and partner for the country’s new flag carrier. Nigeria Air has been in the works for a while now and has slowly been approaching a full launch, pending support from partners. Ethiopian is Africa’s largest carrier and has shown a willingness to invest in new startups recently.

Ready to take off?

According to ThisDay, Nigeria’s federal government has formally chosen Ethiopian Airlines (Ethiopian) as a partner for the long-awaited Nigeria Air. The deal includes a 49% equity share for the airline, joined by 5% from the government since the project is set to be private-public. Notably, Ethiopian is sticking to its policy of not investing cash into a new business.

Instead, the airline will leverage its technical prowess, an abundance of aircraft, and management skills to establish Nigeria’s first flag carrier in years. While yet to be formally confirmed, an initial pool of pilots is set to arrive in Addis Ababa for basic training for certification on the Boeing 737NG.

The next few months will tell us more in terms of the airline’s timeline for takeoff. With a fleet of Boeing 737s and Dash 8s, we can expect a domestic and regional focus in the initial months, a market that has no shortage of travelers in Nigeria. Keep an eye out for this up-and-coming carrier in the near future.

Mesenbet Shenkute Re-elected to Lead Addis Chamber for Second Term

The one and only mortgage bank, Goh Betoch Bank, concludes the financial year with bright books, meanwhile it in fact operated for few months.
The bank which officially opened its doors on October 25, 2021 disclosed that the financial year that ended on June 30, 2022 was primarily used to finalize the formation process and create operational capacities like recruiting personnel, providing trainings, emplace core banking and data center facilities and others.
In the first months, the mortgage bank was also fully working on a five year strategy that was conducted in collaboration with HST Consulting PLC, a prominent consultancy firm.

Mulugeta Asmare, founding President of Goh Betoch Bank, said, adding, “We have also provided services to customers and have been able to mobilize deposits, provide loans, as well as facilitating some other operations like forex.”

The bank that has four branches including the one in Dire Dawa began providing loans in the fourth quarter of the financial year and disbursed over 300 million birr in this short period, while the deposit mobilization was about 260 million birr.
62 percent of Goh’s deposit mobilization is tending to savings for mortgage, which is its specialization even though it provides other basic commercial banking services.

In the financial year under review, the bank was able to conclude under a positive balance sheet, which is not common in the sector, “Compared with the period where we commenced our real operations, such types of success is quite rare.”
“We have been working to manage our expense. Thus for the closed period, we have attained to cover our costs including organizational expenses that were incurred starting from the under-formational processes, which started in 2019,” the President said.

“Despite working for a few months under limited scale, our income has surpassed the expenses, reeling in profits of 6.3 million birr,” he explained.
As a mortgage firm, the bank may not have a priority to run extraordinary ways of opening branches and in the current financial year it has targeted to double its branch number to including major cities like Hawassa and Bahir Dar.
Currently, the bank that has 127 staffs has four branches in Addis Ababa and Dire Dawa.

The Reporter Ethiopia

Patrick Hicks is a born-and-bred Texan from Waco. Fasicka Hicks is from Addis Ababa, the capital of Ethiopia. They met in 1997 after she immigrated to Texas.

Both of them liked to cook, and Patrick’s barbecue became a favorite of Fasicka’s Ethiopian family. Seeing her family’s delight gave Fasicka an idea.

The idea soon blossomed into Smoke N Ash, but it remained traditional Texas BBQ until 2019 when Fasicka decided to add Ethiopian options to the menu — and they soon became popular items.

With customers enjoying the two tastes together, the couple decided just having the meal share the same plate wasn’t enough. They decided to combine the flavors in the same recipe.

“And I was tellin’ him, ‘Hey, you know what? We can make money sellin’ this food.’ So we bought a trailer and made some extra money on the weekends. Before we know it, we start forming lines because people look forward to our cooking every weekend,” Fasicka recalled.

To guarantee authenticity, Fasicka’s sister gathers Ethiopian spices in Addis Ababa and ships them to Texas—the result is perhaps the only Ethiopian-Texas barbecue on the planet.

The Texas-Ethiopian platter is the signature dish at Smoke N Ash. American barbecue staples like brisket to catfish to Texas toast, as well as Ethiopian dishes like chicken doro wat are on the menu.

The couple says the success behind their restaurant isn’t the food but what it means to them.

“When it comes to food for me, it’s just about togetherness. You work on it with love and care, and you make it to be the best thing on the plate, on the table,” Fasicka said.

The couple says the success behind their restaurant isn’t the food but what it means to them.

“And I was tellin’ him, ‘Hey, you know what? We can make money sellin’ this food.’ So we bought a trailer and made some extra money on the weekends. Before we know it, we start forming lines because people look forward to our cooking every weekend,” Fasicka recalled.

Safaricom prepares to switch on Addis in early October

The amended National Payment Proclamation requires foreign and local fintech operators, including mobile money service providers, to pay a license fee regularly. The proclamation, which was passed by the Council of Ministers last month, is expected to be ratified once Parliament is back from recesses.

Officials at the central bank told The Reporter that “the amount is not fixed. It will be stated in the directives of the proclamation. We are currently finalizing the directive required to put the proclamation into effect.”

The amendment of the 2011 proclamation is necessitated to open the mobile money sector to foreign operators. This came especially after Safaricom Ethiopia requested to bring onboard its mobile money arm, Mpesa.

However, Mpesa, a Kenyan mobile money service provider awaiting the amendment of the National Payment Proclamation, is unhappy with the requirement for a license fee, sources close to the matter told The Reporter.

Mpesa is already undertaking preparations to enter the Ethiopian market after government officials gave the green light last year. Managers of Safaricom Ethiopia also confirmed to The Reporter that technical work is already afoot.

“Mpesa has already started building the backdoor software developments. At the beginning, Ethiopian officials told us there would be no license fee for Mpesa. But now, they are telling us there will be a license fee,” complained an official working with the Safaricom Ethiopia, linking the inconsistency with the ebbing Ethiopia’s forex reserve.

However Tewedaj Eshetu, public relations and communication manager at Safaricom Ethiopia, said, “We are waiting for the proclaimation to be ratified.”

Managers of local mobile money companies believe the license fee is a global trend and the amount is not as large as many fear.

“The NBE consulted with owners of mobile money companies before approving the amended Payment System Proclamation. Comments and complaints were included during the stakeholders’ discussion on the draft document,” said a manager of a local mobile money company.

On the other hand, Safaricom Ethiopia is currently preparing for a wide service provision.

Safaricom will launch commercial service in Addis Ababa at a national level in October, according to Tewedaj, though she refrained from disclosing the exact date.

However, sources close to The Reporter disclosed that the launch date is slated for October 6, 2022. A grand ceremony in the presence of higher Ethiopian officials and top management of the five consortiums of Safaricom Ethiopia Plc is expected to be held on the day.

Safaricom launched its first service in Dire Dawa town last month, with a plan to reach 25 cities, including Addis Ababa, by April 2023.

Ever since the start of a brutal war between the government of Ethiopia and the forces of Tigray People’s Liberation Front (TPLF) following the latter’s unprovoked attack on the troops of the Northern Command of the Ethiopian National Defence Forces (ENDF) based in the northern region of Tigray on November 3, 2020, Ethiopia has been subjected to an unrelenting campaign of hybrid warfare waged by a set of actors with vested interests. The campaign has comprised of different actions including an informational warfare depicting Ethiopia in a negative light, a coordinated diplomatic pressure aimed at coercing Ethiopia into submitting to the demands of the TPLF as well as imposing punitive sanctions on the country and withdrawing its benefits under the United States’ tariff-free African Growth and Opportunity Act (AGOA). Western governments and such institutions as the U.N., Western mainstream media, humanitarian aid agencies, human rights “defenders” and think tanks figure prominently among the slew of actors which have been involved in the grey-zone tactics being pursued against Ethiopia.

The latest example of the diplomatic pressure being brought to bear on Ethiopia is the release this week of a politicized report by the International Commission of Human Rights Experts on Ethiopia (ICHREE). Derided by any Ethiopians as a braze attempt whose overarching goal is to demonize the Ethiopian government, the ENDF, the Amhara Militia and Fano, the report’s “findings” gloss over documented atrocities perpetrated by the TPLF. The report says the Commission has reasonable grounds to believe that the ENDF and Eritrean Defense Forces (EDF) committed a catalogue of egregious crimes ranging from widespread extrajudicial killing and injuring of civilians to rapes and other forms of sexual violence against Tigrayan women and girls, and looting and destruction of civilian infrastructure. It also indicates there were reasonable grounds to believe that the Federal Government and allied regional State governments implemented a widespread range of measures designed to systematically deprive the population of Tigray of material and services indispensable for its survival, including healthcare, shelter, water, sanitation, education and food. As for the TPLF, it says Tigrayan Forces have also committed acts of rape and sexual violence, albeit on a smaller scale, and killed civilians and persons rendered hors de combat, looted, and damaged or destroyed civilian infrastructure and property in two towns in the Amhara region.

The ICHREE report is riddled with a raft of shortcomings that rob it of credibility. As the Ethiopian government says, “… the report was written in breach of all principles of professionalism, independence, impartiality, and standards of proof entailed in any such process under international practice”. The Commission, by its own admission, carried out a remote investigation into selected incidents and themes even as it excluded from its report the serious human rights and humanitarian law violations which could amount to war crimes and crimes against humanity in the Afar region. The omission of an entire region— whether by design, negligence or lack of capacity—from the Commission’s investigative work misrepresents the true state of things in the war-affected northern region of Ethiopia. It also constitutes a clear failure to “conduct a thorough and impartial investigation into allegations of violations and abuses of [international human rights law, international humanitarian law, and international refugee law in Ethiopia committed since 3 November 2020 by all parties to the conflict…] by building upon the report of the Office of the High Commissioner and the Ethiopian Human Rights Commission.” Moreover, the Commission’s use of language implying that the Ethiopian government has engaged in acts that may amount to ethnic cleansing is entirely unbefitting a human rights body and lays bare its political bent.

The Ethiopian government had rightfully condemned the decision to establish the ICHREE from the outset, describing it as being imposed on it without its consent and an unwarranted meddling into its internal affairs under the guise of protecting human rights. The Ethiopian Human Rights Commission also reserved criticism for the decision arguing the creation of a new body was repetitive, counterproductive to the ongoing implementation processes as per the recommendations of the joint investigation it undertook with the UN rights office into the alleged violations and abuses committed prior to the unilateral cease-fire declared by the Ethiopian government in June 2021, and further delayed redress for victims and survivors. In fact following the adoption of the joint investigative report, the Ethiopian government established the Inter-Ministerial Taskforce (IMTF) to comprehensively deliver on accountability and redress measures and initiated an independent criminal investigation. These flaws thus tends to undercut a fundamental principle of international law, namely that the primary responsibility for the promotion and protection of human rights rests with states themselves.

Western governments and such international institutions they control as the U.N. have a checkered history when it comes to the protection of human rights. Although they espouse human rights values in their rhetoric and policies, their excoriation of human rights violations are by and large is dependent on the extent to which other countries (or certain groups) are willing to obey their commands. Consequently, the horrendous human rights violations states and groups, such as the TPLF, that have cultivated friendly ties with the West or dutifully carry out the West’s bidding, commit are whitewashed or completely ignored. That is why the assertion that the ICHREE magnified the alleged atrocities committed by the Ethiopian government while making a perfunctory mention of the slaughtering of innocent civilians, rape and sexual abuse, use of child soldiers, pillaging, and destruction of civilian infrastructures the terrorist-designated group is guilty of would not be far off the mark. If the U.N. or for that matter any other international body tasked with advancing the protection of all human rights for all people, empowering people to realize their rights, and assisting those responsible for upholding such rights in ensuring that they are implemented, they must never be weaponized for political ends.

Budget allocated by the Ministry of Education for public universities has been utilized for political purposes, a report published by the Ethiopian Ethics and Anti-corruption Commission reads.

The Commission’s report, which was initiated to assess corruption risks in the private and public educational sector, highlighted a plethora of issues in both public and private-owned educational institutions which severely compromise the quality of education.

The report, which The Reporter has obtained, shows that there is a corrupted and political party-affiliated organizational system in educational development programs in those institutions. Illegal and inappropriate recruitment of teachers and other staff members, employing relatives and family members and recruitment of staff with fake educational certificates are also mentioned.

Many staff members of some educational institutions have employees with fake education certificates, while private university colleges are printing and selling degrees and diplomas like a good, and registrars purposely destroy students’ certificates and request money to replace them, according to the report.

It showed that while the university structure attempts to preserve the reputation of those who are in power, private schools, on their part, seek to preserve the interests of their students as commodity customers.

The absence of teachers from their classes, fake educational certificates, leaders’ engagement in theft, illegal employee recruitment and development, inappropriate procurement, lack of clear transparency and working system, inappropriate registrars’ staff members’ engagement malpractices, and tender embezzlement pose risks to educational quality, according to the finding.

The report underlines how colleges and university administrators compromised the quality of buildings by plotting and signing with the contractor to accept buildings before their completion date.

The study, which was conducted in 61 institutions, revealed a lack of internal financial control mechanisms, purchased goods of low quality, and budget allocation for politically motivated activities outside educational institutions’ key responsibilities.

Most of those educational institutions were reluctant to provide the requested information to undertake the assessment, unable to obtain accurate information and due to the absence of leaders in their working places, according to the finding.

The Reporter’s endeavors to get comments from the Ministry of Education bore no fruit as some officials were unable to respond.

However, Ethiopia’s education and training authority communication director, Tarekegne Geresu, speaking about private colleges, said that despite there being certain issues that might be considered findings, the authority has clear criteria to uphold rules and regulations in private schools.

Tarkegne also mentioned the authority’s ongoing efforts to identify and take serious measures against over 200 institutions, reaching up to the revocation of licenses and closure of institutions.

“After graduation, we provide authentication for every single degree certificate, and unless the authority certifies this certificate, employers should not recruit those with unverified certificates from private colleges,” Tarkegne told The Reporter.

Only seven insurers meet the new threshold

The National Bank of Ethiopia (NBE) raised the minimum paid-up capital of insurance firms by six-fold. The revised ‘Minimum Paid-up Capital for Insurance Company’, which is effective as of September 15, 2022, replaced the existing threshold introduced in 2013.

The new capital requirement to obtain a general insurance license is 400 million birr, up from 60 million birr. The minimum capital for long-term insurance licenses was also raised from 15 million to 100 million birr. A company needs to deposit 500 million birr in a closed account to obtain a license for both, which was 75 million birr under the old directive.

Existing insurance companies whose paid-up capital is below the new threshold are given a five-year window period to meet the new minimum threshold by the end of June 30, 2027. However, these insurers are required to submit an action plan to the NBE by October 16, 2022.

“There is plenty of time to fulfill the requirement. The minimum requirement was very low from the outset,” said Zafu Eyessueswork, a veteran in the industry and founder of United Insurance and Hibret Bank.

Fikru Tsegaye, an insurance profession known for his commentaries in the sector, also welcomed the decision.

“The inflation has been eating the capital of insurers. If you compare capital of insurance companies against dollar, it was declining, so the amendment is a step in a right direction,” said Fikru.

Out of the 18 existing insurance companies in the country, only seven have capital of more than 500 million birr, according to NBE’s report. The insurance industry has been struggling with low market penetration and declining premiums in a stiff competition for the limited market niche.

However, the old directive remains active for new insurance firms in the pipeline until September 15, 2023. This means organizers of new insurance firms can attain a license under the existing directive in the next year. A discussion is underway to adjust license fee required to acquire new license and renew existing ones. The fee is expected to be adjusted by 2000 percent, though that is still under discussion.

The new directive states that insurance companies in the process of share subscription that successfully collect a minimum paid-up capital of 60 million birr for general insurance business, 15 million birr for long-term insurance business, or 75 million birr for both, and submit a final application to NBE within one year after the effective date of the new directive, shall get the license.

Industry players called the new directive “hair-raising,” as the insurance industry’s growth remains nascent.

“Raising the minimum capital from 75 million to 500 million birr at once is very difficult. The new directive is inconsiderable to the difficulties the industry is facing. The industry has achieved very little capital growth in the past 20 years due to the nascent environment. The NBE itself has contributed to the weakness of the industry,” said an insurance consultant speaking to The Reporter regarding the new directive.

“The NBE was never giving appropriate attention to insurance, as the central bank was primarily occupied with banks. We have been requesting the government for the insurance industry to be regulated by a commission, authority, or agency separate from the NBE. We believe this will help the insurance industry to get better support and better attention,” the consultant explained.

Yesuf Ibrahim is a founding member of the National Movement of Amhara (NaMA). He worked as the head of the strategic sector in the earlier stages of NaMA’s establishment. After its establishment, he worked as the head of the strategic sector for two years. After serving the organization as a vice chairman, he is currently working as the head of the party’s legal and ethical regulations and as a manager of the government’s property management authority. He received his LLM degree in law from Addis Ababa University and has worked as a law lecturer at a university. The Reporter’s Selamawit Mengesha sat down with Yesuf on issues concerning the party, region and the country at large.

The Reporter: How would you describe your participation from the time you first started working with the government as an opposition party, and the process until you became the manager of the government’s property management authority?

Yusuf Ibrahim: I have been heavily involved since the establishment of NaMA until its present stage. NaMA’s ideology is not an organization that paints itself as a liberator. It is synchronized with the people and the country.

Because the Amhara people have special problems and are being attacked by the constitution and narrative, protecting the people is one of the political targets. However, we have come to the historical notion that the attack on Amhara people is not something that has a special historical origin but an effort to destroy the country by making the community a victim.

The movement is one that could be traced back to colonialism. Weakening the beliefs, values, and social status of this community can be a way to destroy the country. Its origin is a colonial idea. Because of this ideology, a number of internal anarchist institutions were created.

By establishing such organizations, a political party based on identity has been established over time to save the Amhara people, who have suffered a lot. When the government moves into the phase of “change”, it is important to try because “change” has not yet been seen. When we look at the power alignment in Ethiopia, it is not a place where NaMA makes friends easily. In the course of time, after studying the intricate web of power, we analyzed the power that could become the friend of the enemy.

Compared to that, even if we can’t get along with everyone, we can work with anyone. As for figuring out to what extent and with whom, there are those who are known for backstabbing, so that’s a start. It was a timely analysis that was not particularly favorable to the Amhara. Therefore, it was established to fight anti-Amhara organizations.

Currently, even though it is an institution with many problems, we have an organizational position supported by a strategic document that we must work on together with the government. In general, it is necessary to work together with the government. When elections were planned to be held during COVID, there was pressure from many political organizations. Working together with the government was our own initiative.

We asked ourselves how we could safeguard the long-term interests of our country and people. We are a political organization and we take a position based on who we believe will betray us. We do this within the bounds of the law. It is necessary to work together with the government. They did not try to make it as big as NaMA, but there was pressure from other parties to make NaMA a part of the government, but the government did not want that. Regarding this, we explained to them that Prosperity is a traditional government.

This showed that the government was not proactive and did not identify its partners. As a party, it contributes greatly to the work of saving the country. We believe that we have especially united the people.

During this process, there was a conflict in the nature of misunderstandings between various issues, and because the problems of the parties and the government were not resolved quickly, it started to turn into a war.

With all of that happening, it was important to work with the government during that period. But keep in mind that working together with the government does not mean that we are the government but, in some cases, groundwork needs to be done. We had the idea that politics based on cooperation, not competition, was best suited for the landscape of the country.

Since the NaMA did not have a clear idea about working with the government (that is, we joined the government while the country was at war), we discussed it twice with the government when the issue was raised.

The matter has been tabled at the executive level. But it was fundamentally ignored by NaMA.

When the authority was given, I was called on the phone. I arrived in Gondar at 5 o’clock in the morning and was told that the appointment would be at 7:30. They have their own reasons for doing so. Since the appointment process was during the war, it was completed in secret until the end so as not to overwhelm the government.

On the side of the Prosperity Party, there was a bit of a misunderstanding because I received a call from the Addis Ababa city administration and then, on the same day, I received a call saying that they were looking for you for an appointment in the Amhara region; I made my own decision and chose Addis Ababa.

There is no problem with opposition parties working with the government. In Ethiopia, the process of democracy should gradually develop over time. Democracy needs to be improved by learning to work together.

In fact, it would be great if NaMA worked with the government. It would have been helpful if the lower level of government was more involved in areas such as kebeles and districts.

I made a proposal that if the government does not give us authority on the lower structure, we should give up big authority positions. But the party was not unified and could not consider the proposal.

NaMA is a party established to represent the people of Amhara. The Amhara people want you to be the voice of your party in any way. Working with the government means leading a multi-ethnic population, and haven’t you faced challenges in the middle?

This is also an issue of the reform process that the party intends to follow. The reform will work to clarify which level and which concept we are working on. There might be some changes in concept with the change of leadership.

It is about continuing to explore our strengths and solving our problems. The government does not exist only through the executive branch. The government has three branches and includes Parliament in the constitution.

We have representatives in the federal parliament in the state. The relationship between the party and its members at the top should be defined. As a party leader, when we work with the government, it must be based on the party’s principles. If I am going to move in that way, we should either leave the party or leave the leadership of the government.

There should be a strict procedure. In the current state of affairs, the federal structure that our party and the country are led by all is based on ethnic lines.

The constitution itself rarely even uses the word “citizen.” We want this to be liberal over time. We follow the philosophy that individual citizens should be the foundation of democracy. We want our organization to be a center for correcting the many mistakes made by extremists.

It should not be restricted only to Amhara. It should also be connected with other communities. Once this is fixed, the Ethiopian status will be announced. We believe that when we work as a party and as Amhara, we are operating as Ethiopia.

The Amhara community is the Ethiopian community. It has been pushed by many things. We are not saying it should be paid by revenge. We only remember the past to be able to fix the future. We do not believe that our people would be harmed if equality and freedom prevailed in Ethiopia. This is a modern principle. I do not believe that I am an advocate for the politics of a community at any time. As a company, we believe that we work for all Ethiopians.

It is one of the pillars of our society that it should not be affected by special circumstances. We want to be seen from the Ethiopian perspective. We do not want to separate Amhara. We want it to be governed by justice along with its fellow citizens. Amhara is affected in the same way that the rest of society is, but the incorrect narrative that has developed over time must be corrected. The question of who is the representative of political philosophy is bound to arise. Since NaMA is of Amhara origin, it is organized accordingly.

It is necessary to adapt to solve this problem for the time being. I think NaMA can adapt to all the parties. While working here, I am color-blind. I have neither the capacity nor the desire to take sides by saying who belongs to which nation. I also do not share such political views. We think that the perceptions created on us by the TPLF is in conflict with the people of Tigray. This is because the TPLF has been equating itself with the people of Tigray. But we still see their segregation. We believe that the TPLF is a criminal group. During the century, narcissistic institutions were created to hold back society and live for profit.

A while ago, it was tiring to find the issues that separate the people of Tigray and the people of Amhara. It was bound by various social, geographic, religious, and economic ties. We have to solve the existing problems with different justifiable methods. As it is known in Ethiopia, we do not accept ethnic politics. Therefore, I am running the people’s question in alignment with the government’s work.

Is there a division between the leadership of the government and other members of the party? What kind of situation is NaMA in right now?

Currently, changes are made every time political dynamism changes. The struggle is that when more energy is needed, society needs change. We have gone through many problems in our struggle for organization and society.

As the country’s problems continue to expand, members of the family are always at war. Therefore, leaders and members do not meet regularly. NaMA’s children are dying on the war fronts.

Don’t ask me how a peaceful party can fight with weapons. Since the declaration of seclusion, there has been a call to participate in the war. War has been waged on the Amhara people directly.

There are NaMA members in Raya, Wolkait, and in all the districts where there were members that were killed while in command of the brigade. There are several fighters in the structure. Therefore, the central one, the one at the top of each leadership, and the one at the bottom are not formally connected; we are connected informally.

During the second round of fighting, the party did not have a central committee or executive meeting for four months. Many gaps were created during that time, and it is not possible to update regularly. Politics brings the change of opinion closer to you when you meet and update regularly.

However, the more it is separated, the more the case is defined. So far, we’ve been supporting the idea that had majority support in debates. I have never seen a decision made without the approval of NaMA members.

Because we do not meet regularly, we have lost the opportunity to make decisions through debate and consensus. There were talks of NaMA coming into government appointments without the party’s consent, but in the process, although there were violations of discipline, the matter was adopted at the central committee level and this concept of working together will hopefully continue in the future.

The forces that wanted change were created in NaMA. First, there was a question that you should not lead the party part-time while in government, as the party requires a full-time dedication.

We will restructure. The party is a movement, and a movement needs to open up. It is not just a random party in power. Until the struggle reaches a certain level, the movement will open its doors and attract new talents, and it is not feasible to say that I will remain on the throne of the establishment once it is over. It is not correct, and it is not the principle of our struggle either.

People feel worried if there is no open discussion. There will be people who want to make the party a powerhouse. But in the end, the contradictions could not be easily reconciled.

On the other hand, it has shown differences in the way we see politics. But it is only in the top management that the difference should be noted. A certain difference was created between the Central Committee and the Executive Committee with only 10 to 20 people. There is no difference in the bottom structure of the broad members.

Due to Bahir Dar’s protest, I resigned on my own accord and changed from the position of vice chairman to the law department. What the party wants is not the change of one person or two. They say the movement wants to change from top to bottom. And this is their right.

An inquiring generation should be encouraged. There were misunderstandings with the top management. It deviated from NaMA and the general concept of democracy, which did not accept the reform and were going through a process that did not encourage internal democracy.

It is not a question of whether we like or hate individuals; it is a matter of history. It is the struggle of our people. It doesn’t define division for me. It is fundamentally settled by law. The structure is not split.

The main foundation is structure. I don’t think that the creation of division in the leadership of two or three people will divide the structure. We intend to hold a general assembly by October, which will hopefully restore NaMA.

Will the party become more organized by resolving the controversy within NaMA?

NaMA will come prepared. This happens at any party because it is a massive collection. The party needs time. The fight will then go into negotiations. The negotiation will be based on the concept of transitional justice from our point of view. There are a lot of processes that go through both material and human life. All of that should be resolved.

Politically, where are we going? Where are we going as a country and what is our collective ambition? NaMA must be prepared for this soon.

There are those who have applied what we brought as an idea to Ethiopian politics, which shows NaMa’s power to exert great pressure. After many pushes, debating and explaining to the people of Ethiopia, if politics is about to bear fruit, it will not happen unless the party exists.

There may be individuals with egos within the party leaders. They should be dealt with on the inside first. We were hoping that it wouldn’t show on the outside.

Most of the leadership and central committee members have petitioned the General Assembly’s request. A petition has been filed for reform. Yet undisciplined work is being done against the will of the people and the structure of the organization. That should be corrected. They are all being looked at from every angle.

Let us come to the current national issues. We have been at war for the past two years. Various efforts have been made to resolve the war peacefully, but another war broke out. Can you explain to us the whole political process and what Ethiopia’s politics should be in the future?

NaMA wants Ethiopian politics to be based on citizenship. Ethnic politics means a gathering of extremists where everyone who is offended hides. The TPLF and ONG should be held accountable for the Ethiopian-ism they attacked. It is a country known for caring and living together. Politicians must engage in a certain strategy. The structure should not be manipulated as intended.

NaMA will always cooperate with forces that can weaken the TPLF. As the TPLF has been in politics for a long time and has led the country, it must correct the mistakes of the past by deciding which is the most viable path for the future. They could not think of a way that would benefit the people of Tigray, whom they think they represent.

I do not think that the separation of the Amhara and Tigray peoples, a society that has lived together for many centuries and is bound by religion and culture, will achieve the goal. The people of Tigray must show that they are not enemies to the Amhara community.

During the war process, NaMA has been doing many other things by standing with the defense force, delivering food and coordinating with the diaspora. When the Amhara region was in battle, it gave studies on why they should fight for a purpose. It was heavily involved throughout the war.

How and under what conditions do you think the negotiations should be conducted?

Conflict always ends in negotiation. Even if the TPLF itself thinks that we should be divided, it knows that they will lack both resources and manpower. The TPLF should not go any further on the path of brutality and revenge. Ethiopia should follow the liberal approach and solve its problems. The war against the TPLF was not for revenge but was brought on by themselves.

In my view, I want transitional justice to happen. It is not because I believe transitional justice would calm everything down, but because it is an option. Justice is being served now, not for revenge but to bring harmony and move forward.

Negotiations should be conducted for the sake of peace and justice, with the decision that it will not happen again in the future and that what happened in the past was not right.

But in Ethiopia, it is seen that negotiations are used as a plot resource. It has been observed that only if the power to be negotiated is dangerous and one party wants to survive, is the proposal submitted for negotiation.

That is why I am afraid that the proposal presented by the TPLF might be some sort of treason. The deal requires a genuine broker. Since the war will inevitably end in negotiations, it all depends on who comes up with the better negotiating package. There is a risk that the negotiator who believes in violence may resort to violence at the negotiating table.

The TPLF should not exist as a political force. It is difficult to say that the TPLF is deceiving all these people with mobilization. I think most of them believe it. While the party was scattered, the individuals in the party lined up, reorganized, and attacked the defense force.

Such regeneration should not be ignored. The security guarantees should be adjusted and then they can enter into negotiations. A ceasefire is one way it can be done. But beyond that, there must be other stakeholders. The negotiations that should have been entered into after the collapse of the Derg left us in the situation we are in now. I believe that the Amhara region should have a negotiator on their behalf.

In the end, it should be known what level our politics should be at. Any person should be able to go and live in the area they want without being displaced from place to place because of ethnicity.

The TPLF has the capacity to rebel, not organize and re-enter. War itself should not be based on ethnicity. Who will benefit from this war?

There is no need to pretend like there is a war between two different countries. Both must work together. The negotiations must be conducted in moderation. Negotiations range from a ceasefire to a new proposal.

Although the African Union has little experience, it must mediate. They should all enter into the negotiation with good intentions. The very idea of secession is unethical.

Olufunso Somorin (PhD)

Olufunso Somorin (PhD), regional principal officer of climate change and green growth for the eastern Africa region at the African Development Bank (AfDB), was in Addis Ababa to participate in a high-level technical conference on climate change aimed at summarizing takeaways for the upcoming COP27 conference. He presented his research titled “Adaptation Agenda: Beyond COP27” during the meeting on September 13 at the Hyatt Regency in Addis Ababa. Ashenafi Endale of The Reporter sat down with the expert to learn more about initiatives underway to lessen the effects of climate change on the global south and the rest of the world.

The Reporter: Africa emits only four percent of the global Greenhouse Gas emmisions (GHG), so why should Africa bear the burden of climate damage caused by the rest of the world?

Olufunso Somorin: Africa’s total GHG emissions are 3.8 percent. Compared to countries such as the US, a region like Europe, or even a country like China, this is very low for a continent of over one billion people. Africa is not responsible for climate damage.

However, when it comes to the impact of climate change, Africa is the most vulnerable. That is why more conversation is crucial to changing the global climate change discourse.

The region that is the least responsible is the region that is the most affected.

How much of their GDP are African countries losing to climate change?

The impact is already affecting the African population, economies, infrastructure, etc. The development we have achieved so far is under enormous threat due to climate change.

Every African country spends anywhere between two percent to 10 percent of its annual GDP dealing with the effects of climate change. This is an enormous resource that could be used to build more infrastructure, train more teachers, invest in energy and other development projects. The magnitude of climate change in African economies is hugely affecting development.

A large chunk of the available climate resources in Africa goes to mitigation. Currently, you are advocating shifting that resource from mitigation to adaptation. What exactly do we mean by climate adaptation projects?

There is a paradox that the region that needs the most global climate finance to respond to climate change is also the region getting the least.

Africa receives only three percent of global finance. This is despite the fact that Africa is the least contributor to the climate crisis but the most affected. This is what we need to change. Between 80 and 90 percent of the money that comes to Africa is used to mitigate climate change. Of course, mitigation is also good for development. When you use renewable energy, you are increasing access to power.

But adaptation, which is implemented across many sectors, is much more rewarding. Our economies in Africa are very dependent on weather systems. Agrarian societies account for up to 80 percent of the population. The moment there is a change in weather, for instance, a five percent change in rainfall, can lead to a significant impact in crops, and instant impact on food security. If the rain is delayed just by a season, it has a direct impact on food security.

So adaptation entails doing agriculture correctly, using water resources appropriately, refraining from activities that affect rain, and changing one’s mindset in order to achieve a stable climate. Adaptation is not for one sector, it is for every sector. There is a possibility in every sector for adaptation.

How much is Africa spending on climate change, and how much of it is coming from local financial sources?

There is a data accuracy problem. There is a lot of funding and finance that many countries are undertaking to handle climate change. They are not reporting it. Keep in mind that African countries spend between two and 10 percent of their GDP to respond to climate change disasters. So the data is not perfect because they are not reporting it precisely.

Domestic resources for adaptation are still low. Of course, it is very much under-reported. Nobody wants a climate-resilient modern Africa. Nobody desires a prosperous and modern Africa. So it should be our desire and our job to be climate resilient. We already paid for it. Our responses must be structured, coordinated, and lasting.

Is humanitarian assistance mitigation or adaptation?

Humanitarian assistance is a short-term coping mechanism; hence, it is a mechanism. Adaptation is a continuous, long-term solution. You do not move from zero to a hundred at once. The greater the risk, the more we need adaptation.

So adaptation is always in relation to the risks at hand, so you cannot achieve the highest level of adaptation. People affected by climate change on the ground are coping every day. But those are short-term solutions. They cannot respond to larger pressures.

A humanitarian response, if it is to respond to a climate crisis, is an adaptation measure.

How can we shift from mitigation to adaptation?

We do not shift in a way that ignores mitigation. We allocate more values, resources, responses, institutional systems, and capacity for adaptation.

Have African countries approved the National Adaptation Finance Framework (NAFF) so far?

NAFF is an idea we are testing. In many countries, including Ethiopia right now, we have developed a number of policy documents on adaptation. We have a national adaptation program of actions (NAPA), national adaptation plans (NAPs), and an adaptation component in our NDCs. Ethiopia has a climate resilient green economy (CRGE) strategy. Apart from the NDC, there are a lot of adaptation plans in various sectors.

However, none of these plans specify where the money will come from. All countries, including Ethiopia, have the plans but lack the financing. That is why we are developing the framework.

For instance, if Ethiopia introduces a strategy that charges an additional two dollars per every tourist or traveler coming to Ethiopia, which the airline collects per ticket, and that two dollars goes to a climate resilient fund, that is an innovative way of raising money to finance adaptation. Ethiopia can also levy a 0.5 percent tax on every business operating in the agricultural sector, and we call it the ecological or agricultural productivity fund.

We can also formulate legal frameworks in which every private sector operator reports what they are doing on climate change. You give them a template for how they report. Then the finance is aggregated and channeled to adaptation. We are ultimately thinking of a national level adaptation approach.

There is no such thing as a climate change project. What we have is a “climate-informed development project.” That is very important. If we mainstream adaptation into all our development projects, that is how adaptation works.

Do you recommend mandatory finance contributions for the private sector and other institutions?

Consider it a business strategy. The financial framework in Ethiopia may be different from that in Kenya, Nigeria, or others. Adaptation is very local. Adaptation does not operate in a vacuum. Adaptation is nested in an institutional structure in place, social relations in a country, and state-society interactions. It is crucial to capture that and craft a financial strategy around it.

We must start thinking of adaptation as something critical for development. We have to find an innovative way of funding it.

How can the private sector turn the climate change crisis into a business opportunity?

The private sector itself depends on climate change. Climate change is a risk for the private sector too. By investing in adaptation, it is also a way for the private sector to guard its own investments and do sustainable business. Businesses are not completely insulated from the climate crisis. When they see that as a threat to their business and start to respond, businesses start to adapt.

The private sector is not exonerated. There are opportunities and advantages for the private sector to channel private capital into adaptability.

Do you think Africa is exploiting carbon trading?

The good thing about the carbon market is that even though it focuses on mitigation, it exists largely in sectors that are adaptability-oriented. Whether it is forestry, as in the African case, conservation, nature-based solutions, carbon trading can be an adaptation intervention. Reducing emissions is the core target of all NDCs, including Ethiopia.

Carbon trading is a good opportunity. The financial flow from the carbon market and investment can also trigger adaptation finance.

What do we expect from COP27?

Cop27 is very important for Africa, because we need to be able to make progress on the financial commitments that the developed countries have made. There is also something about capital that is additional and predictable.

We need capital in quantity and quality. We need a lot of money. Somebody can pledge a trillion dollars and put too many conditions on the table, so you may not get even five percent of it. In such cases, the money has the quantity side, but the quality side is very difficult.

Africa needs a climate adaptability roadmap. Climate action is just a basket containing mitigation and adaptability. The truth is that mitigation and adaptation are different. The approaches, strategies, implementation modalities, design, and projects are different.

What we need is an adaptation strategy cognizant of the African context that is structured and practical.

So in global climate finance, a specific resource for the adaptability finance segment is crucial.

One of the agendas expected at the COP27 is the issue of banning the extraction of fossil fuels. What is your reflection on this, as Africa is just beginning to extract its fuel resources?

It is still a conversation at this early stage. The global conversation at the climate conference is very cognizant of Africa’s concerns. When we say green energy, it is a gradual transition. You do not go from fossil fuel to green energy in one day. There has to be a gradual transition. Substitution for fossil fuel is in the long run. This plan must also capitalize on technology.

Do not forget that fossil fuel is a natural endowment for these countries. How do you tell countries like Angola, Nigeria, or others to go from burning fuel to 100 percent green? We need to clarify that. I do not think the global system is going to put a gun to your head. It is about placing attractive incentives in place, and support mechanisms, to make that gradual transition.

For African countries, they are not under any legal obligation to make that transition. There has to be an incentive and encouragement for it.

The decision made 13 years ago to commit USD 100 billion to Africa’s climate response remains a pledge. Now we expect more pledges at the conference. Why do we always believe in pledges that will not materialize?

The way global diplomacy works is that we must always agree to move forward. So there is an agreement in principle that USD 100 billion a year comes from developed countries. That is one side of the coin. The other question is, do they really actually deliver? Some countries did, and many did not. COP27 is expected to urge these countries to push for these pledges to be met.

Is there any mandatory legal framework or convention to make countries fulfill their financial obligations as per their contribution to GHG emissions?

Climate diplomacy does not work as expected. Probably global trade and other sectors based on international laws. But for climate issues, you need to reach consensus. Most of the time, you are not going to find a situation where there is a legal penalty. It is not an annual contribution and “if you do not pay, you go to jail.” There is no climate court. Countries must understand the value of those resources and their contribution to climate value.

Do you think the world needs green politics like in the 1980s and 1990s, or do you think the current climate crisis can be solved under the conventional mainstream political systems?

First, to be honest, we have made progress since. It might not be on the scale we anticipate. But we have made enormous progress by bringing people around the table. The fact that we are having conferences for parties to discuss climate is a good sign. Maybe developed countries might say “we pledged USD 100 billion for Africa annually. We managed 80 billion,” and they might promise to improve it.

That is why I call it a fragile win. It is not a complete win. But it is still a win.

Do we need something radical? The answer is no. We would not get that. Because global diplomacy does not work around radicalism, it works around building consensus on the solution and the way forward. Then some countries may be part of the solution. The bigger part of diplomacy is that the further you talk about problems, the more you can talk about solutions.

But for many African countries, that is not enough and you want to see results on the ground. That is still a work in progress. So we expect a progressive step forward at COP27.

You recommended in your research that “debt for climate swap” as an alternative climate financing method. Do you think that can work, as many African countries, including Ethiopia, have piled up external debt?

These are the innovative climate financing schemes we are talking about. During the 2008/9 financial crisis, a country not far from here, Seychelles, was affected, as a service-based industry was severely affected at the time by the crisis. The Seychelles was able to negotiate “a debt for nature” swap. So a certain portion of its external debt was swapped for natural protection.

Basically, instead of paying the external debts back, you are allowed to use the money to do projects and investments that sustain the environment. We can do that as well. There is also a resilient bond, which is doable.

African countries need to come up with different innovative financing schemes because the one that works in one might not work in the other.

The fundamental departure is, let’s go beyond concessional loans and grants. Let us bring in equities, risk-sharing facilities, and all the types of financial instruments. Debt for nature swaps are just one instrument. I really like this scheme, and I would love to see it work in other parts of Africa.

Currently, the Horn of Africa is being rocked by an elongated climate crisis.

The Horn of Africa issue is a very special case. This is a region where some of the scariest challenges of climate impacts are unfolding. This is also one of the most resilient regions. In the past, regions had to deal with drought every decade or so. But this time, the frequency has been very high. Yet, many governments, institutions, and even the private sector are rising to the task of dealing with the crisis.

But we must start planning for the long term. Our actions in the Horn region are always reactive. We always start doing things after a drought has struck. Early warning systems, productivity optimization, water harvesting systems, and other readiness are very important ahead of the next drought. Proactive adaptation investment is very important instead of the reactionary type of investment.

In the Horn, resources are mobilized every time drought comes around. Why is it that a lasting solution remains difficult? What kinds of projects are needed?

Some drought resilience programs and projects are underway. The AfDB is one of the largest donors of drought-resilient programs in the Horn region. What is important is that we must coordinate projects at different levels.

Many initiatives are done at scattered levels, and they are not coordinated. Most importantly, we must push for proactive investments. We need more focus and investment on development spending so we can reduce our humanitarian spending.

Governments keep saying “we do not have money” and suddenly, when a crisis happens, they find money. Why do not we find the money before the drought strikes? That could have saved a lot of lives and damage.

Drought can happen, but it must not leave a humanitarian crisis behind. There are countries that face drought all year round. But we have to find different ways to change things.

Most importantly, we need partnerships at different levels.

Sewagegn Chane is director of the Public Financial Institutions supervisory department at the Public Enterprise Holding and Administration (PEHA), which regulates state-owned enterprises. Sewagegn is currently responsible for directly supervising the Development Bank of Ethiopia (DBE) and the Liability and Asset Management Corporation (LAMC). The Commercial Bank of Ethiopia (CBE), Ethiopian Insurance Corporation (EIC), and the National Lottery were also under his supervision, until they are transferred to Ethiopian Investment Holding (EIH) past May.

Working in public financial institutions for 30 years, Sewagegn initiated the establishment of the stock market in Ethiopia, which is bearing fruit eleven years after the first feasibility study. He was also vocal and key in rescuing the DBE, initiating Ethiopia’s first reinsurance company, Takaful (Islamic insurance), among others.

Sewagegn is also researcher at i-Capital Institute and organizer of the East African Finance Summit. Currently, he is leading two teams formed at the institute, studying the establishment of an investment and agricultural development banks in Ethiopia. Although he has been advocating ending state protection over the financial sector for years, he has currently changed his mind, just as Prime Minister Abiy Ahmed (PhD) authorized a policy that envisages opening up Ethiopia’s financial sector to foreign competition. Sewagegn believes the banking sector should remain closed at least for the next few years. The Reporter’s Ashenafi Endale sat down with the public finance guru. The excerpts, does not necessarily reflect PEHA’s position.

The Reporter: What is the progress in reforming public financial institutions, which commenced after Abiy came to power?

Sewagegn Chane: The biggest reform we undertook is in the DBE. In 2018/19, the House of Peoples’ Representatives (HPR) decided DBE cannot continue as a financial institution and debated on how to dismantle it. That year, the bank reported 765 million birr loss so the HPR decided that the bank is not supporting itself, let alone the economy.

Myself, Haileyesus Bekele, the president at the time, and Yohannes Ayalew (PhD) DBE board president at the time, were called by the HPR to explain the issue. At that time, Public Finance Institutions Agency was a separate entity outside PEHA. The agency was led by Sintayehu Hailemichael (PhD) and I was the deputy director for operations. When some 36 SOEs were put under PEHA in 2018/19, the agency was included under PEHA, as a directorate.

The Budget and Finance Standing Committee at the Parliament insisted the DBE must be dismantled, because it was reporting a loss consecutively. The three of us were called to give our final comments on the committee’s decision. The committee was told that the fundamental problem of the bank was the lack of institutional independence.

Everybody was intervening in the bank, and it was unable to operate as a bank. The PM, other ministers, sectorial institutions, and even individuals have been meddling in DBE’s operation. Secondly, the bank gives loans but does not collect. Those who took DBE loans view it as the government’s budget, not as a client. Most of them had the “developmental investors” plate.

They take a loan and divert it to other businesses. Commercial farming in Gambella and Benishangul are good examples. I was in Gambllea for a year and half, to study why DBE’s loans failed there. There are so many rain-fed projects there. Particularly, six of those that took loans completely diverted the money to other businesses, instead of the commercial farming.

I stood before the standing committee, and pledged to give the DBE additional time. I told them if institutional freedom is restored, relationships with clients will be straightforward, and the bank’s loan collection capacity rebuilt, bringing DBE on track. So I asked the standing committee to give us just one year, and if we fail to rescue the bank in that year, then the committee can dismantle it.

Yohannes on his behalf explained how the IMF and the World Bank are happy to see the DBE dismantled because they do not want development banks in developing economies. He also elaborated how important a development bank is for Ethiopia. After a brief tea brake discussions, the standing committee announced it granted the one year time.

Immediately, we embarked on the reform agenda, introducing seven reform pillars. One of the biggest reform pillars was reducing DBE’s Non Performing Loans, which was over 40 percent at the time. If the bank cannot collect the loans, it cannot disburse loans the next time.

DBE’s NPL at the time was weighed in rain-fed agriculture and textile. So, we stopped any further loans for rain-fed agriculture. In textile, many foreign investors took loans in billions but did not pay, so we decided to take over all the projects that are not paying back their loans, and transferred them to other investors.

We also took the contract management of non-performing projects. For instance, the DBE took over the management of Elsi Addis, Etur and other textile factories, for the time being. Except Etur, most of these projects have been transferred to new investors, without reaching the foreclosure stage.

The major project left on our hands to date is Ayka Addis.

The other serious measurements we took were barring any officials from intervening in any loan appraisals and disbursement processes. Before the reform, orders for some loan approvals were given from the Office of the PM. Officials from the Industry, trade, agriculture, and many other ministries used to give such informal orders to the bank. Now, even the DBE board cannot involve in loan disbursement cases, except on strategic issues.

We managed to reduce DBE’s NPL to 30 percent this year, including Tigray loans. It is actually 17 percent, if loans in Tigray are excluded, which are affected by the war in northern Ethiopia. Profit comes from loan interest. If the loan is not collected, there can be no profit.

We managed to generate 1.2 million in 2019/20; just a year after the reform was launched. This year, the bank generated 3.9 billion birr in profit. If we did not put aside 4.1 billion birr provision for the Tigray loans, DBE’s profit this year could have been 7.8 billion birr. The DBE is rescued now and everybody is acting as a client now.

DBE’s source of finance is the guarantees from the Ministry of Finance and the National Bank of Ethiopia (NBE). The capital has increased from five million to one billion. The macroeconomic committee approved a study to allow new DBE bond, effective since January. This is apart from the GERD bond, which is the DBEs source of finance.

Before the reform, all the financial indicators of the bank were negative, and unhealthy. We completely reversed all of that, except for the NPL. Before the reform, there were only expenses and disbursement, but now there is income.

Out of the 31 strategic measurements we stipulated under the seven reform pillars, 21 are aggressively implemented and ten are in the process. Only one measurement has not started, which is the digital technology and modernization initiative.

The PEHA and DBE’s board has contributed for the success of DBEs management. One of the positive factors is the steel-serious discipline of Tegegnework Getu (PhD), the board chair of DBE. As a board chair, he is opaque to any external influence or favor. He never took stipends and incentives allocated for board chairs annually. Even he uses his own car for DBE activities.

Yohannes was the chief economist at the NBE for a long time. How did you believe in him, that he could rescue the bank?

Under past presidents, the bank had many deviations and exceptions. Instead of going through loan approval and disbursement procedures, loan seekers directly contact the president and get the loans, informally.

For instance, after we banned DBE loans for rain-fed agriculture in 2018/19, the bank gave 120 million for rain-fed agriculture project. The president at the time said he was forced because certain officials at the Ministry of Agriculture managed to give the order via the Office of the PM.

Surprisingly, the board chair does not know about the loan. The bank was bleeding. We had to be brutal to stop the bleeding. Most of the bad loans were given during Isayas Bahre’s time. Both Haileyesus and Getahun Nana were unable to save the bank. Our biggest worry was that Yohannes might decline the role to lead the DBE.

Over 200 large scale agricultural projects, and a number of foreign textile investors took loans from the bank and failed to pay. Are you pursuing them legally?

We are trying to acquire the lands currently. Our biggest problem now is with the regional governments of Benishangul and Gambella. The land is the key asset the investors provide as collateral to take the loan from the bank.

After the investors fled without paying the loans they took, the DBE has to acquire the lands, since it is the collateral. Once we finalize acquiring the lands, we will transfer it to other investors. Then we will recover the previous loans.

I heard the Benishangul and Gambella regional governments are demanding it pays taxes on the lands?

We reached agreements on some of the lands in Benishangul. There are ongoing debates on the amount. The bank agreed to pay the tax, if it agreed on the amount. The regional governments usually give one plot for multiple investors, so one certificate is given to multiple investors. The regional agriculture bureau has been reporting to us that the lands were being cultivated by the investors, which was false.

In general, rain-fed agriculture and textile investments have bled DBE.

For instance, Ayka Addis’s investor used informal channels to get the loans, instead of going directly through the bank. It either goes through the PMO or other officials. Solving all this was not simple.

Most of DBE’s clients were unruly. They had the right to take the loan, and the right not to pay. So we disciplined the clients first, and reversed the bank’s practice of negligence. All this was done in three years.

How much is the land leased for the rain-fed projects?

The rate depends on the regions. Basically, tax, lease and anything related to the land is handled by the investors. But since the investors went bankrupt, and the DBE took the lands, now the bank has to pay them. This is the reason why the regional states are asking DBE for the taxes, because it is under the bank now.

The investors who took the land in regional states for commercial farming, left, and the tax holiday period is over. So regional states are now claiming the taxes and the DBE agreed to pay. This is the game.

Did the Gambella commercial farms failed by design?

The loan was supported by policy. The policy of initiating commercial farming and modernizing the agriculture was not wrong. So the DBE prepared policy and procedures.

The major factor for the failure at that point, was the decision to give loans for rain-fed agriculture. This was a mistake because the investors knew the loopholes and abused the loans and failed to return it.

The DBE is on the right track now but business continuity is more critical.

What are DBE’s sources of funds, after the NBE’s 27 percent T-bill is replenished?

The NBE introduced another bond this year, in which banks channel one percent of their loan portfolio to the DBE. In the past six months, a bit more than 10 billion birr has been channeled to the bank from this new scheme. Once we start from insurances, these two schemes will become our biggest source of funds.

The GERD bond and loans from international banks also generate finance. It also accesses external funds like SME loans, through the MoF. DBE’s T-bill is almost zero currently.

How much is the loan interest the DBE is paying currently, when will the rest mature?

The DBE pays interests by adding two percent on the saving interest, which means nine percent. On the other hand, DBE’s interest rate is between 11 percent and 12 percent, the least being for import substituting projects. The margin covers its administrative cost. So the bank is able to pay all its interests duly.

DBE requested to put Tigray NPL’s off its balance sheet. But NBE officials told The Reporter that it is not going to take it off its balance sheet.

If Tigray’s NPL is put-off DBE’s balance sheet, DBE’s NPL could be 12.5 percent. But including the Tigray NPL, which is 10 billion birr, the NPL stands at 30.4 percent. What we are saying is this 10 billion birr in NPL happened by factors out of DBE’s control. We are not asking the NBE to cancel the Tigray loan.

We undertook a detailed study on how the NPLs could be taken off the balance sheet, and presented to the NBE. We do not know why NBE is silent on the issue. The CBE also requested the NBE to take off two billion birr off CBE’s balance sheet. This was also studied and presented to the NBE.

The NBE first said the request should be processed by the Bankers Association but the issue is still in the process. It is illogical to keep inactive numbers on banks’ balance sheet. When unrest occurred in Oromia over the past few years, the NBE allowed loans of affected investors in the region to stay off banks’ balance sheet. The same can be done for Tigray. It is not a big deal. It is NBE’s decision but I do not know why it is reluctant when it comes to Tigray NPLs. Tigray NPL does not represent DBE’s actual performance, which is outstanding.

DBE’s outstanding loan is 63.4 billion birr. Total NPLs stood at 19 billion, of which 10.1 billion birr is created in Tigray since the war. The president of DBE requested to exclude the Tigray NPL but PEHA does not agree, unless the NBE approves it.

Another investor is negotiating to buy Ayka Addis. Will this be the last negotiation?

A number of potential buyers have been trying to buy Ayka Addis in the past but failed. Especially a Chinese investor was very eager to acquire Ayka Addis. Any potential buyer is expected to contribute 50 percent of Ayka Addis’s portfolio. For instance, the initial investment loan was USD 1.7 billion so the buyer is expected to contribute half of it. But the Chinese lacked capital so it requested to contribute only 10 percent of it, which means around USD 200 million, so we refused because we cannot breach the 50 percent law.

If Ayka Addis is sold, DBE’s NPL will drop to around 15 percent, from the current 30.4 percent. Ayka Addis is holding a huge loan. The principal loan is 1.7 billion, a decade ago. Including the interest, probably it is around USD three billion by now. The value of the machines, factory building, raw materials when the DBE received Ayka Addis, is valued at USD 1.79 billion.

By the way, we are still paying the salary of 4,500 employees of Ayka Addis, though it has not operated for years now. It is between 13 million birr and 14 million birr every month. We cannot abandon the employees, after the Turkish investor left. We are carrying all this cost.

There were also other alternatives for Ayka Addis, other than selling it.

There were three major options tabled. The first is selling to a capable investor or buyer. The second is operating Ayka Addis under a management contract, just like Elsi Addis and the third was repurposing Ayka Addis into an Industrial Park. Some three potential investors have been negotiating. The Chinese came last.

Currently, another negotiation is underway. We hope this will be the last one. It is a consortium of local and foreign investors. We will disclose it when it materializes. Ayka Addis’s operation ranges from cultivating cotton to sewing the clothes. It pins the cotton, dyes it, and makes the clothes. It is an end-to-end project. So the potential buyer is expected to specialize in all these value chains.

Will the new buyer pay Ayka Addis’s accumulated tax?

Under Ethiopia’s law, a company does not pay taxes if it declares bankruptcy. After the DBE took over Ayka Addis, the tax authorities are saying Ayka Addis must pay tax, since it did not undergo liquidation. Ayka Addis was not operating for the past eleven years. So, the tax authority is asking for back-taxes for all these years, stating the project did not declare liquidation. So we are arguing with the tax authority.

But the DBE declared foreclosure?

When the Turkish investors left and the DBE started managing Ayka Addis, the tax authority started asking for tax.

Amazingly, Bmet cables, one of the Turkish investments abandoned after taking huge loan from the bank is a good example of how much Turkish investor’s exploited us. Under the Turkish investor, Bmet cables utilized 40 percent of operational capacity but they were not paying their loan.

Now, the local buyer, Tadesse Admasu of Red Star Trading, is operating at 12 percent of its capacity due to different reasons. The buyer acquired Bmet paying 890 million birr. Now, it has paid all the loans owed to Bmet.

How much has Ethiopia lost because Turkish investors left the country without paying DBE loans?

Before, their equity contribution was 30 percent. This means the DBE contributes 70 percent of the investment. Under the previous ratio, a Foreign Direct Investment comes with USD 30 million, and takes 70 million. The foreign investors left without paying the 70 percent loan they took from the DBE. But now, we adjusted the equity contribution to fifty percent, for foreign investors. Local investors pay 20 percent.

FDI is needed to bring technology, capital, forex, and create jobs. It did not meet any of these targets.

One of the other loopholes FDIs has been exploiting is that they highly under invoice export price. They usually have subsidiaries or a mother company operating abroad. So they export the clothes to them, with fake price documents. These investors also import raw materials only from those mother companies or subsidiaries abroad. The FDIs operating in Ethiopia do not want to use local inputs. They export t-shirts with USD 60 cents from Ethiopia. But the buyer abroad, which is affiliated to the FDI, resells it at a much higher price. So the FDIs generate meager forex for Ethiopia. Their bank statements also indicate loss, always. Especially the expats brought by FDI are highly abusive. Bmet’s former CEO has been paid 500,000 birr in salary monthly. This is excluding housing, vehicle and other accommodations. Now we decided to reduce expats inflow.

That is why, just when we started being strict on Ayka Addis that the Turkish investor’s fled Ethiopia immediately, without handing over the project’s properly. I think they left for Burkina Faso.

Are there new public financial institutions planned to be established, particularly to finance long term development projects?

Four years ago when the bank was in deep trouble, we conducted a study to determine its fate. One of our alternative recommendations in the study was to breakdown DBE into three different policy banks; into an industry bank, agricultural bank and an SME bank. Finally, a decision to reorganize and reform DBE as it is was made. In the meantime, we conducted a study to renovate the bank; the ATA was also making moves to initiate the establishment of an agricultural bank.

The initiative to establish a stock market was also conducted by us. We have been trying to convince the government to establish a stock market for the past eight years. It is only realized under Abiy.

Now, the importance of an independent agricultural bank and investment banks is imperative for Ethiopia. In line with the agricultural bank, agricultural insurance and micro-insurance firms are necessitated equally. These firms protect the loans provided by the agricultural bank to farmers.

We conducted the “Proposal of restructuring public banks” in 2014. The proposal included the recommendation to determine the fate of the former Construction and Business bank (CBB). We did not just demolish CBB without a proper study.

The same studies have later been modified for the DBE. The modified study also recommended the vitality of Agricultural Development Bank, and mortgage bank (construction bank). The plan is for the CBE to stop mortgage financing, and transfer the role to the new Construction Bank (CB). In fact, the proposed CB partly takes on the role of the now defunct CBB.

Currently, we have established two working groups at i-Capital Institute, studying on investment bank and the agricultural development bank each. PEHA has the mandate to give birth to new public enterprises, apart from managing the existing ones. It can also decide on mergers, and dismantling of SOEs.

As long as Ethiopia is progressing from an agrarian economy to manufacturing, a stock market is very essential. If we need more robust manufacturing companies, we must build a robust stock market, where the companies are listed, float shares, and mobilize capital. A manufacturing industry cannot grow without a stock market.

The banking sector fears to give loans to manufacturing industries because the banks fear losing their saving capital. Once the stock market is active, the interest in banks will drop. But the stock market will grow faster, hand in hand with manufacturing.

I hope the establishment of an agricultural bank is realized soon. Ethiopia has an agrarian economy. But the economy is currently distorted, as the service sector constitutes the largest portion of the GDP. In a bid to transform Ethiopia’s economy from an agricultural to a manufacturing industry, agricultural development bank cannot be an alternative. Agriculture is not developing due to lack of finance, fundamentally.

The agricultural bank also needs an insurance firm, to cover the risks of the loans. The bank finances tractors for the farmer, and then the insurance firm insures the machines as well as the harvest. It is highly imperative that agricultural development bank and investment banks are essential for this country.

A secondary market cannot operate without an investment bank. Since we are nearing the establishment of a stock market, we also need to establish an investment bank.

For instance, banks are planned to be listed on the stock market. The investment banks will study the banks, as well as other IPOs, inside out. So, the investment banks determine the exact value of shares, and securities. This means IPOs, including commercial banks, cannot determine the price of their shares by themselves, unlike now.

The underwriter preserves the interest of every stakeholder, investor, IPOs, and others. It sets standard but the investment bank cannot be listed on the stock market itself.

Once the two working groups wrap up their studies, the documents will be reviewed by stakeholders. Then, we will present the final documents to the government to decide on whether to drop or implement the study’s recommendations.

A few years back, we travelled to Nigeria to visit their central bank and development bank and took three months of training. I was amazed by their Islamic insurance. We extracted lessons and brought it to Ethiopia.

The government is saying the banking industry will be opened for foreign competition very soon. What is your take on this?

Before, we have been asking the government to open the banking industry. But recently, we have changed our perspective. We prefer the government to delay the opening up for now. I precisely know the exact capacity of each local banking institution.

Before, our assumption was that local banks will merge, at the face of an open up. So we have been advocating for it to open, at each meeting and financial summits.

Basically, banking and insurance businesses in Ethiopia is a captive business. The banks are formed either under religious, ethnic, political sentiments or other bands. So, Ethiopian banks and insurance companies lack the business mentality. If they had a business mentality, they will work with anyone who has a viable business idea. So I believe the government must delay the sectors opening up.

The NBE recently said mandatory merger and acquisitions will be forced on local banks, when the sector is opened up.

That is inevitable once the industry is opened up. Of course mergers can happen even before the opening up. For instance, the NBE raised the paid up capital to five billion. Those who failed to meet will have no option but merge. The NBE can also raise the reserve let’s say to 25 percent, from the 10 percent currently. Many banks could have merged. This way, competitive banks could be created.

Western banks, especially Europeans, strongly pushed Malaysia, Korea, South Korea, and Thailand to open up their financial sector. Once these Asian countries opened their financial industries, the western banks withdrew after joining the sector. The Asian economies were hit by financial crisis as a result.

But eventually the Asian tigers avenged the western banks. The 2007 financial crisis hit western banks, because the Asian tigers suddenly raised their banking capital. They intentionally gave more loans to American banks. Then the American and European banks disbursed those loans to mortgage, and small businesses. The western banks failed to pay their loans to the Asian tigers, taking revenge twenty years after the western banks played foul.

We do not need such turf wars.

The only reason Ethiopia’s economy is doing well after the war in the past two years, is because our financial industry is closed off. Our economy survived because the banking sector is not open.

If banking was opened to foreign competition, the economy could collapse, under this war. And had it been opened before the war, the economy would have collapsed by now. Foreign banks simply close and leave, when there is a war.

Many people say the banking industry should be opened. That is wrong. They do not know the exact capacity of local banks in surviving foreign competition. I have no confidence even in the CBE.

The CBE has a huge NPL owed by the government. The government owes over half a trillion birr. Unless it is fully paid, CBE will face many challenges.

So, I insist the banking industry should not be opened at least in the next three to four years. Local banks need up to four years to prepare. Mandatory merger is simple.

When the Home Grown Economic Reform was launched in 2019, the government promised to reduce the states hand in the economy, and reduce the pressure on CBE and domestic credit. Is there any progress?

The CBE is not giving loans to the government now. State pressure is reduced. The CBE has studied new organizational structure, and is implementing new business strategies. Before, especially during the previous regime, state banks give loans as if it is a budget. They do not collect the loan.

Do you follow up on CBE’s branches abroad?

We evaluate them during reporting. The bank has branches in Juba and Djibouti. The Juba branch is performing very well but the Khartoum branch was suspended while in the pipeline.

Did the CBE move from PEHA’s supervision, after it is placed under the EIH?

Currently, the CBE is in transition process, from PEHA to the EIH.

I heard SOEs will be categorized under three supervisory institutions according to their performance. These are the EIH, PEHA, and the LAMC. Is that true?

What I know is that there are SOEs going to the EIH, and the rest will remain under PEHA. The LAMC by itself is an SOE and is under PEHA’s supervisory. LAMC is under my supervision. The CBE, DBE, EIH, LAMC and national lottery, are under my directorate.

The EIH has recently on-boarded 27 SOEs, out of the 36 SOEs under PEHA. Does that mean they are completely out of PEHA?

The investment part of SOEs goes to the EIH, while the enterprise management aspect remains under PEHA. But so far, there is no definite decision on whether the selected SOEs completely move to the EIH, or partially. This is decided by the macroeconomic team of the PM.

Will all SOEs be listed on the stock market?

The plan was for the SOEs to list a certain percent of their value on the stock market. If SOEs like ET, ethio telecom and others trade 10 percent of their portion on the stock market, it builds the public’s confidence. But SOEs must meet stringent financial reporting systems.

I also hear that five percent of ethio telecom’s share will be sold on the stock market. SOEs that meet the right financial reporting system will be able to float shares on the stock market.

People are facing difficulties acquiring houses because real estate companies collect money from house seekers and disappear. The stock market will also solve this. Everything will take shape under the secondary market.

The government is allowing the establishment of new banks in the last two years. But lately it confirmed the opening up of the banking sector for foreigners. Isn’t this sending mixed signal?

Mergers can be done at any time. Then local banks can consolidate and ready for competition. PEHA is exemplary in merging CBB with the CBE six years ago. Private Banks must follow suit.

Local banks are in a comfort zone, registering lump profit, not because they are providing a class service. They are profiting because they are protected. Under state protection, they do not have to improve service. They survive at the expense of the client. Millions are saving in bank but only a few thousand get loans. All of this will change, once foreign banks come.

To allow foreign banks, the banking proclamation, banking service code and the investment regulations must be revised. Especially, the code must allow banking for foreigners. The existing commercial code allows banking and insurance only for Ethiopians. Non Ethiopians cannot be investors, or operators.

Do you think the financial sector will be opened before five years?

I think so but I prefer it being delayed. All banks are giving loans to the service sector. Manufacturing and agriculture cannot grow unless we have banks that can give loans for long term projects. There are no consumer loans too.

Insurance companies complained over NBE’s order to direct 15 percent of their profit to DBE bond.

The rate has been reduced lately and the insurance companies agreed.

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Ethiopian Reporter Political News

Officials at the Ministry of Agriculture are worried about the global fertilizer scarcity as the nation becomes unable to endure the increase in the price of the agriculture input owing to the conflict between the Ukraine and Russia.

The global fertilizer crunch continued as the country sees a growth in demand for fertilizer due to expansion of irrigation farms and new agriculture projects that prompt farmers to increasingly shift to artificial fertilizer with subsidized price.

“Demand is growing substantially as Meher farms expand and irrigation activities surges across the country,” said Umar Hussein, the Minister of Agriculture, in an event held at Skylight Hotel to honor stakeholders who have been involved in the timely delivery and distribution of fertilizer.

Last year, the price of fertilizer more than doubled in the international market, a situation that have bulged Ethiopia’s annual budget for the commodity from USD 600 million to USD 1.2 billion.

“The last year has been very challenging due to forex shortage and security concerns that have affected distribution,” Umar said.

This week, the World Bank warned that there would a further increase in price of fertilizer, with the rapid increase in gas prices turning into an increase in the cost of the commodity.

“The challenge is meeting the immediate demand for fertilizers to support next season’s crops. Current projections suggest that Africa’s unmet demand could reach four million metric tons this year, with West Africa facing the most acute challenges this growing season,” said World Bank Group President, David Malpass, during the opening of the 77th session of the UN General Assembly (UNGA 77) on Tuesday, 13 September 2022.

Last year, the Ministry had to float a tender more than twice as suppliers failed to fulfill contracts due to the global fertilizer crisis, which was first caused by the coronavirus pandemic and then worsened by the war between Russia and Ukraine, which supply over 50 percent of inputs needed to produce urea.

“Taking a lesson from last year, we are in contact with potential suppliers to avoid delays. Invitations have been already made,” said Sophia Kassa (PhD), State Minister for Investment and Input Sector at the ministry, told The Reporter.

During the last fiscal year, almost 13 million quintals of fertilizer was supplied by Fertiglobe, one of the largest producers of the nitrogen fertilizer in the Middle East, and Morroco OCP, a renowned supplier in Ethiopia, where it is currently building a fertilizer plant in partnership with the government.

The government expended a total of 64.5 billion birr for the procurement, shipment and distribution of fertilizer last year. It accounts for 11.4 percent of the budget during the same period.

The government had to allocate another 15 billion birr in subsidy as farmers become unable to withstand the surge in price of fertilize quadrupled in the local market.

Three directives on broadcast media go operational effective this month

The Ethiopian Media Authority enacts three directives to regulate the public, community, and commercial broadcast media. They are part of the eight directives the Authority has been issuing since the ratification of the media proclamation in April 2021.

To be applicable beginning this month, the directives list the rights and responsibilities, and how licenses are granted for the public, community, and commercial broadcasting media. The directives rule on how television and radio media should conduct their reports during national occasions like elections.

Lists of administrative measures by the Authority as well as legal actions have also been stated. Beginning from warnings to suspension of licenses and legal actions, several measures would follow should the media houses engage in illegal activities.

One of the actions, as it was the practice before, was to prohibit the dissemination of a program considered to be a danger to national security before going public on any of the broadcast media.

On the issue of impounding and injunctions, article 45 of the proclamation states that prosecutors might request a court order to stop publication of the programs. In the event of an emergency, the broadcast of the programs will be called off with the order of the Ministry of Justice. This should be notified to the court of law within 48 hours.

The Authority also prepared and approved several other directives to govern the media landscape in Ethiopia. These include directives for religious broadcasting services, online media, and print media.

Following the approval of the religion broadcasting service directive, which forced the registration of religious-based media, several of them have been registered.

Among the 46 media outlets that started the process and are working with the Authority to finalize registration, 23 have received their licenses, according to Dessie Kefale, communications director at the Authority.

“There was a deadline on which all had begun the registration process. Some of them were already operational for a long time, of course,” he said.

Before the ratification of the proclamation, as Dessie explained, there had not been adequate legal frameworks for all kinds of media houses.

All the directives and regulations before last year’s proclamation were based on the Mass Media and Access to Information issued in 2008, and Broadcasting Service Proclamations issued a year before that.

“There are several other laws under discussion and preparation, which includes a directive on hate speech and misinformation,” Dessie told The Reporter.

It is the “largest pandemic fraud” in the US

Ethiopians are among 47 people who have been charged in connection with a fraud scheme in the US involving Feeding Our Future. The alleged fraud is said to be the largest pandemic fraud in the country, involving USD 250 million.

The defendants are charged across six separate indictments with charges of conspiracy, wire fraud, money laundering, and bribery. The defendants are suspected of creating dozens of shell companies to enroll in the program as Federal Child Nutrition Program sites, while allegedly creating shell companies to receive and launder the proceeds of their fraudulent scheme.

The defendants submitted false invoices purporting to document the purchase of food to be served to children at the sites and submitted fake attendance rosters purporting to list the names and ages of the children receiving meals at the sites each day, according to the US Department of Justice.

“These indictments, alleging the largest pandemic relief fraud scheme charged to date, underscore the Department of Justice’s sustained commitment to combating pandemic fraud and holding accountable those who perpetrate it,” said Attorney General Merrick B. Garland. “In partnership with agencies across the government, the Justice Department will continue to bring to justice those who have exploited the pandemic for personal gain and stolen from American taxpayers.”

Feeding Our Future’s founder and executive director, Aimee Bock, was among those indicted. She is charged with conspiracy to commit wire fraud, conspiracy to commit federal program bribery, and federal program bribery. She oversaw the USD 240 million fraud scheme carried out by sites under Feeding Our Future’s sponsorship, according to the US Department of Attorney.

An Ethiopian born Abdikerm Abdelahi Eidleh, 39, of Burnsville, Minnesota, is charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit federal program bribery, and money laundering. Eidleh was an employee of Feeding Our Future who solicited and allegedly received bribes and kickbacks from individuals and sites under the sponsorship of Feeding Our Future. Eidleh also created his own alleged fraudulent sites.

Ethiopian born-US nationals, Bekam Addissu, 39, Hadith Yusuf, 34, and Hanna Marekegn, 40, are each charged with one count of conspiracy to commit wire fraud. Another six siblings who are originally from Ethiopia have also been charged with wire fraud, federal programs bribery, conspiracy to commit money laundering, and money laundering.

Another Ethiopian-born US national, Liban Yasin Alishire, 42, the president and owner of Community Enhancement Services Inc., a company located in the JigJiga Business Center in Minneapolis, is charged with receiving more than USD 1.6 million in fraudulent Federal Child Nutrition Program funds. Ahmed Yasin and Khedir Jigre have also been charged with conspiracy to commit wire fraud and money laundering in the same center. These three defendants have been accused of buying properties, including beach property, in Kenya.

Another defendant with links to Kenya, Salim Ahmed Said, 33, of Plymouth, Minnesota, is charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit federal program bribery, federal program bribery, conspiracy to commit money laundering, and money laundering. Said was the owner and operator of Safari Restaurant, a site that received more than USD 16 million in fraudulent Federal Child Nutrition Program funds, the US Department of Justice said.

“An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law,” the department said.

A startling revelation regarding the war in northern Ethiopia was announced last week by the International Commission of Human Rights Experts on Ethiopia, an independent organization tasked by the UN Human Rights Council with conducting a thorough and impartial investigation in Ethiopia. The stern warning emerged after the organization released a study that stated there are reasonable grounds to believe that parties to the conflict had violated and/or abused human rights since combat began in November 2020.

It was a report that not only angered federal government officials but also countries and experts that had already questioned the mission and real interests of the recently formed committee of experts.

“The report of the commission is prepared in defiance of the UN best practice guidelines such as professional independence, impartiality, and standard of proof,” said Tadesse Kassa (PhD), secretariat of the inter-ministerial taskforce that was formed by Prime Minister Abiy Ahmed, slamming the UN Commission of Human Rights Experts report of human rights violations in the northern Ethiopia war.

At a press conference held on September 21, 2022, he referred to the Commission’s initial report, which was created with only two full-time human rights investigators and remote interviews, as nothing more than mediocre. At the press conference, the Ministry of Justice unveiled the task force’s first phase report, which was prepared by 158 experts deployed in the conflict-affected Amhara and Afar regions.

In its first phase investigation report, which covers violations committed by the Tigray People’s Liberation Front (TPLF), the inter-ministerial taskforce (IMTF), formed to implement the recommendations of a joint investigation by the Ethiopian Human Rights Commission (EHRC) and the UN Office of the High Commissioner for Human Rights (OHCHR), presented its findings.

The Task Force found reasonable grounds to believe the commission’s findings that there were 2212 rapes, 2831 extrajudicial executions of civilians, and other violations during the war. According to its 46-page report, the team came to this conclusion after analyzing the testimonies of 10,000 witnesses and analyzing thousands of videos and material evidence.

For Tadesse, who has been monitoring the task force’s research and report-writing process, the UN Commission of Human Rights Experts’ report on Ethiopia is only a “snippet” of the full extent of the damage that has been inflicted throughout all three regions.

“The report’s conclusions are presented on the basis of either no evidence or evidence whose credibility is highly questionable,” the secretariat told the room full of reporters questioning the report in regard to its standard of proof and data collection. Tadesse even went on to call the report “a political statement” that was prepared to “help implement” the agendas of “some forces.”

This week, the commission accused all combatants in the conflict of committing various human rights crimes. In order to reach the conclusion that there are “reasonable grounds” to suspect that the offenses amounted to war crimes and crimes against humanity, the Commission listed incidents that it employed as a basis.

The selected incidents were the shelling of Mekelle and attacks on civilians and civilian objects; killings in Kobo and Chenna; and a drone strike on an Internally Displaced Persons (IDP) camp in Dedebit. Rape and sexual violence, and denial and obstruction of humanitarian access were also selected themes for the investigation.

The commission’s two-month investigation into selected incidents and themes found “reasonable grounds” to believe the Ethiopian National Defense Force (ENDF), Tigray forces, and Eritrean Defense Force (EDF) committed war crimes, according to the report. In this case, the report accused the ENDF of using “starvation of civilians as a method of warfare.”

It further stated that it found “reasonable grounds” to believe extrajudicial killings, rapes, and sexual violence were committed by ENDF members “as part of a widespread attack” directed against “the civilian population of Tigray.”

The accusations were part of a joint investigation by the Ethiopian Human Rights Commission (EHRC) and the UN Office of the High Commissioner for Human Rights (OHCHR) that was adopted by the federal government.

The federal government, on the other hand, blasted the commission’s report, adding that it had opposed its formation from the start. It described the report as “substandard quality” and its allegations as “unsubstantiated.”

“It makes grave accusations against the government and its armed forces without offering proof, just based on telephone conversations and web-based submissions. This is irresponsible,” Zenebe Kebede (Amb.), the Permanent Representative of Ethiopia, told Federico Villegas, Human Rights Council president, at the Interactive Dialogue with the commission on September 22, 2022, in Geneva, Switzerland.

As the commission was not allowed to go to the war-affected areas of northern Ethiopia to investigate by the federal government, all the 185 interviews with victims, survivors, witnesses, and other key interlocutors were conducted remotely, it said. Even the governments of Sudan and Djibouti haven’t granted the Commission access to interview Ethiopian refugees within their borders.

Authorities in Benishangul Gumuz Region are preparing a conflict recovery project that would need a 38.5 billion birr budget to be implemented. It is an initiative that arose as the security situation improving.

The plan is expected to be implemented in five years in three phases, with execution scheduled to begin next month.

The region’s sectoral bureaus will start adapting the plan and mobilizing resources based on their needs. The region is drafting a directive that will guide resource mobilization.

The required budget for the recovery plan is nearly six times the region’s 6.7 billion birr budget for the 2022/23 fiscal year.

“Non-governmental organizations and UN agencies have already expressed their interest in supporting the initiative,” Tarekegn Tasisa, the region’s disaster risk management commissioner, said.

The recovery and rehabilitation project, based on a study prepared by the region’s disaster risk management commission, will be implemented in the region’s 17 districts in the Metekel, Kamashi, and Asosa zones. The plan outlined a list of main activities that would be carried out in six sectors, including disaster risk management, agriculture and natural resources, health protection, and education.

The study for the plan was conducted using the regional government’s root-level apparatus. They have identified the extent of the damage, and the commission compiled it, according to the Tarekegn.

Besides the study carried out by the commission, another study is also being prepared led by Assosa University. The university’s study estimated that the region sustained 79.4 billion birr damage due to the conflicts in the past years.

The conflict has resulted in the loss of 16 million quintals of crop, valued at 44 billion birr, according to the study.

“The university’s study has already been presented to the regional government, but it’s not finalized yet. That’s why we are using what we studied. Ours is already ratified by the recovery steering committee,” the commissioner said.

Officials say the security situation in the region is improving now. The number of civilians killed in the past five months is at its lowest.

The region has been a place of horrific civilian killings and conflicts between government security forces and Gumuz rebels since 2019. While the Metekel and Kamashi zones are the main fighting grounds for the rebels, Metekel zone has seen killings targeted at ethnic Amharas.

Even though the region is rich in gold and coal mining resources, investors are not able to mine the reserves, especially in the Kamashi zone. The region ranked second in the country in terms of gold production, with artisans producing more than 90 percent of the region’s gold.

475,384 residents are displaced from their villages due to the insecurity in the region, of which 77,500 are children under the age of five, and 20,000 are breastfeeding mothers, according to the conflict impact assessment. The conflict is also a reason for the destruction of 43,640 houses.

The region, which has been witnessing conflict and the killing of innocent people in various places, saw 113,000 students are out of school due to instability. The destruction of schools has created a difficult situation for students to return to school. In the conflict-affected areas of the region, 201 schools were completely destroyed and 86 schools suffered partial damage.

The region’s 142 health facilities, including 126 health posts, have also sustained damage due to conflicts.

Benishangul Gumuz, which provides agricultural land to investors who engage in large scale farms, has had its 109 agricultural institutions’ warehouses looted and partially or completely destroyed.

The study showed that 291 farmer training institutes and 140 animal health facilities met the same fate.

The recovery and rehabilitation plan has prioritized the implementation of the return of internally displaced people and the rehabilitation of those people in their former homes in a sustainable manner. It also focuses on rebuilding social and economic institutions and providing the necessary equipment for the institutions.

The project need assessment showed that 38.5 billion birr will be needed to implement the plan in disaster risk management, agriculture and natural resources, health protection, education, water irrigation and energy resource development, women, children, and youth sectors, as well as peace building and security sectors.

“The cost of the recovery budget is so much higher than the region’s capacity. But we are planning to mobilize resources from diaspora communities that are from the region,” Tarekegn stated.

Funds from donors including the federal government and the World Bank recovery project are expected to be part of this project.

The Benishangul Gumuz region is one of the six regions, including Tigray, Amhara, and Afar, where rehabilitation project was launched by the federal government together with the World Bank this year. In May 2022, the bank signed a USD 300 million grant to assist the reconstruction, and the federal government has allocated 20 billion birr in the current fiscal year for reconstruction.

In areas that have security threats, the project will be implemented by a third party. The Ministry of Finance has delegated United Nations Office for Project Services (UNOPS) to implement the reconstruction in the Tigray region.

The Ministers of Health and Education studied the damage in all six regions and prepared a report detailing the cost of the five-year reconstruction project.

The Ministry of Education stated that USD 96.5 million is needed to recover from the damage to schools in the Benishangul Gumuz region, while the Ministry of Health stated that USD 22.35 million is needed to recover from the damage in the health sector of the region.

However, the question of equitable distribution of wealth is being raised in the reconstruction project of the federal government. The Boro Democratic Party, which shared power in the region’s government, blamed the federal government for not paying enough attention to reconstruction.

In a statement issued by the party a month ago, the party urged the federal government to pay attention and allocate resources to the replanting zone in the same way that attention and resources are allocated to the destruction and displacement of citizens in northern Ethiopia.

Yohannes Tesema, the party’s Political Sector head, believes the government is not giving enough attention to the recovery as much as it gives to the Amhara and Afar regions.

He claims that out of the USD 300 million granted by the World Bank, the amount of funds allocated for the Benishangul Gumuz region is small.

It says there is no military solution to this conflict

The US Department of State called on “Eritrea and others to cease fueling” the conflict in Ethiopia and urged Eritrea to withdraw its forces from Ethiopian borders. The department accused Eritrea of increasing tensions throughout the Horn of Africa region.

The US also called on “both the Government of Ethiopia and the Tigray regional authorities to halt immediately their military offensives and pursue a negotiated settlement through peace talks under the auspices of the African Union.”

At a press briefing on September 15, 2022, Ned Price, spokesperson of the US Department of State, stated that Ethiopia should look for a non-military solution to the conflict.

“We are increasingly concerned by the growing military activity in northern Ethiopia. We strongly condemn the resumption of hostilities. There is no military solution to this conflict. These actions are inconsistent with the government of Ethiopia and Tigrayan regional authorities’ stated willingness to go to talks,” Price said.

The US special envoy to the Horn of Africa, Mike Hammer, who is in Ethiopia over the week and canceled his expected press brief on Friday, is also advancing a similar position to secure a peaceful resolution to the third wave of war that resumed in Ethiopia on August 24, 2022.

The special envoy is reportedly making efforts to bring warring parties to the table, while Olusegun Obasanjo, the designated AU official to broker peace in Ethiopia, has been silent since the third wave of war broke out.

Both optimism and worry dominated the just-ended Ethiopian year. A year that began with aspirations for wider peace and stability in the nation ended with the resumption of another deadly conflict. In a war with no apparent end in sight, thousands of people are still dying in the highlands. The economy is still in a difficult situation after recovering a little in the last Ethiopian year, on the top of the stockpiled macroeconomic problems.

It was such a challenging year. In the last year, more than the year before, the effects of the one-year-old conflict was felt. This is especially true in terms of the economy. The cost of living remains high despite recent indications that inflation is slowing down nationwide.

“The government found it difficult to contain inflation and in the third quarter of the past fiscal year started to slow down the pace of depreciation of the national currency. Maybe this contributed to stabilize the inflation rate somewhat but it may also have contributed to foreign exchange shortage in the economy,” Patrick Heinisch, an economist said.

Some conflict-affected areas are experiencing a more than 1000 percent increase in commodity prices as a result of severe supply shortages. It is still a problem in the country’s north, particularly in Agew Zone, Tigray Region, and parts of Afar Region.

“Up until the resumption of the war, I was sending money to my family living in Tigray, paying 30 birr for every 100 birr I transfer,” said Kirubel, whose last name is withheld for security reasons. “For obvious reason, this is not something normal in a country with a sound economic condition.”

Kirbuel’s story is actually the tip of the iceberg. Just two months after the previous Ethiopian year began, Ahmed Shide, the Minister of Finance, was among the first to voice concerns about the status of the economy. In the same broadcasted speech on the state broadcaster in November 2021, his comrade Yinager Dessie, the governor of the National Bank of Ethiopia (NBE), did not conceal the fact that the economy was poised to collapse because of the war.

It didn’t take long for Prime Minister Abiy Ahmed (PhD) to react. While also paving the way for a negotiated settlement with the warring party in the North, the Tigray People’s Liberation Front (TPLF), which the Parliament designated as a terrorist organization, his administration declared a humanitarian truce. Humanitarian organizations had relatively easier access to provide food supplies to people in the war-torn region.

First, some progress was made in the effort to bring about peace. The economy showed signs of improvement, and the IMF, which had previously included Ethiopia on its list of nations with unpredictable and unstable economies, predicted that it would rebound. Soon after the ceasefire in North Ethiopia, the other Bretton Woods organization, the World Bank, similarly predicted Ethiopia’s economy would revive.

Though such encouraging developments helped the government rebuild its ties with the West and western financial institutions, they did little to prevent the country’s fundamental problem—the shortage of foreign currency. From approximately USD two billion to barely USD 290.7 million in loans, development partners and lenders cut their commitments.

The net inflow of external debt was negative USD 551 million, indicating that the amount of creditor loans disbursed was less than the principal amount of debt the government was servicing.

Businesses have also faced a financial crisis due to the forex shortage, a situation that has plagued them for decades, though some found last year to be their most difficult ever.

More than any other businesses, those involved in the water bottling industry felt the pinch. Twenty water bottlers had to shut down because they were no longer able to run their businesses due to a lack of inputs, and they had even reached a point where they were unable to pay their employees’ salaries.

Overall, access to foreign currency remains challenging for businesses. At the end of 2021, foreign exchange reserves stood at USD 1.6 billion, or 1.3 months’ worth of imports of goods and services.

The authorities tightened foreign exchange regulations numerous times over the previous fiscal year in response to the shortage, upping the percentage of foreign exchange companies’ must surrendered to the government (central bank) to 70 percent. Even exporters had to deal with the shortage because the restriction prevented them from using more than 20 percent of the foreign exchange they had earned.

Another major economic burden that persisted in the country last year was the widening budget deficit, made worse by the war in the North, which increased spending for military. The budget deficit widened and is now expected to exceed 300 billion birr this year, which is more than twice what it was in the just-ended fiscal year. These difficulties compelled the government to take desperate decisions, such as freezing loans or introducing new taxes, in an effort to increase revenue and narrow the mounting deficit.

However, not every problem can be solved.

For many workers in industrial parks, the suspension of Ethiopia from the African Growth Opportunity Act (AGOA), a trade benefit granted by the US to developing countries so they may export their goods without paying an import duty, has been a bad news.

Due to significant layoffs brought on by the suspension, more than five factories have left the park, and over 5,000 workers have lost their jobs as a result.

“The year has been tough for all workers in Ethiopia. From the inflationary pressure to the war that has made many jobless, they have been in a pickle. Some had to live in poverty since their salary is not enough to cover expenses,” said Kasahun Follo, president of Confederation of Ethiopian Trade Union (CETU), urging employers to consider the challenges and make adjustments in the coming New Year.

Although the amount of jobs created by industrial parks is relatively low compared to the agricultural sector, the country had planned to industrialize. For Heinisch, these efforts are now being thwarted.

“Worryingly, since 2019 the share of the industrial sector in GDP has actually decreased. The trend is likely to have continued in the past fiscal year,” he said.

Despite the difficulties last year, industries did well.

The export of industrial items reached a record-high USD 500 million in exports during the previous fiscal year. However, this is negligible in light of the development in the coffee industry, which generated USD 1.4 billion in revenue during the previous fiscal year. It is a success that has helped officials to record the nation’s record-high exports revenue, which exceeded the USD four billion mark during the previous fiscal year.

Despite some progresses, however, the overall economic condition seems to be in worst shape, according to economists.

“We have undertaken a study and discovered that the economy is not in a stable condition, which is indicated by the unpredictability of the exchange market, the fiscal policy and the forex market, adding to global-wide problems,” said Tewodros Mekonnen (PhD), an economist and a policy analyst.

Another economist, Mengistu Ketema (Prof.), also believes the economy had not been in a good condition last year.

“Inflation was growing, above 30 percent throughout the year. External debt are maturing, thus forcing the country to allocate more budget for debt servicing. The drought in the south also worsened the already tense situation. And when you add all these to the global economic challenges, including the war in Ukraine, it indicates the economy is between a rock and a hard place,” Mengistu said.

For Heinisch, who believes Ethiopia did not experience a “post-COVID” recovery in 2021/2022 as many other countries did, the outlook is more benign, assuming that the war that has broken out again will come to an end quickly and the country can focus on its economic reforms again. “Debt restructuring could free up resources that the country needs for reconstruction but also new investment projects. So there is still reason for hope,” Heinisch concluded.

Both optimism and worry dominated the just-ended Ethiopian year. A year that began with aspirations for wider peace and stability in the nation ended with the resumption of another deadly conflict. In a war with no apparent end in sight, thousands of people are still dying in the highlands. The economy is still in a difficult situation after recovering a little in the last Ethiopian year, on the top of the stockpiled macroeconomic problems.

It was such a challenging year. In the last year, more than the year before, the effects of the one-year-old conflict was felt. This is especially true in terms of the economy. The cost of living remains high despite recent indications that inflation is slowing down nationwide.

“The government found it difficult to contain inflation and in the third quarter of the past fiscal year started to slow down the pace of depreciation of the national currency. Maybe this contributed to stabilize the inflation rate somewhat but it may also have contributed to foreign exchange shortage in the economy,” Patrick Heinisch, an economist said.

Some conflict-affected areas are experiencing a more than 1000 percent increase in commodity prices as a result of severe supply shortages. It is still a problem in the country’s north, particularly in Agew Zone, Tigray Region, and parts of Afar Region.

“Up until the resumption of the war, I was sending money to my family living in Tigray, paying 30 birr for every 100 birr I transfer,” said Kirubel, whose last name is withheld for security reasons. “For obvious reason, this is not something normal in a country with a sound economic condition.”

Kirbuel’s story is actually the tip of the iceberg. Just two months after the previous Ethiopian year began, Ahmed Shide, the Minister of Finance, was among the first to voice concerns about the status of the economy. In the same broadcasted speech on the state broadcaster in November 2021, his comrade Yinager Dessie, the governor of the National Bank of Ethiopia (NBE), did not conceal the fact that the economy was poised to collapse because of the war.

It didn’t take long for Prime Minister Abiy Ahmed (PhD) to react. While also paving the way for a negotiated settlement with the warring party in the North, the Tigray People’s Liberation Front (TPLF), which the Parliament designated as a terrorist organization, his administration declared a humanitarian truce. Humanitarian organizations had relatively easier access to provide food supplies to people in the war-torn region.

First, some progress was made in the effort to bring about peace. The economy showed signs of improvement, and the IMF, which had previously included Ethiopia on its list of nations with unpredictable and unstable economies, predicted that it would rebound. Soon after the ceasefire in North Ethiopia, the other Bretton Woods organization, the World Bank, similarly predicted Ethiopia’s economy would revive.

Though such encouraging developments helped the government rebuild its ties with the West and western financial institutions, they did little to prevent the country’s fundamental problem—the shortage of foreign currency. From approximately USD two billion to barely USD 290.7 million in loans, development partners and lenders cut their commitments.

The net inflow of external debt was negative USD 551 million, indicating that the amount of creditor loans disbursed was less than the principal amount of debt the government was servicing.

Businesses have also faced a financial crisis due to the forex shortage, a situation that has plagued them for decades, though some found last year to be their most difficult ever.

More than any other businesses, those involved in the water bottling industry felt the pinch. Twenty water bottlers had to shut down because they were no longer able to run their businesses due to a lack of inputs, and they had even reached a point where they were unable to pay their employees’ salaries.

Overall, access to foreign currency remains challenging for businesses. At the end of 2021, foreign exchange reserves stood at USD 1.6 billion, or 1.3 months’ worth of imports of goods and services.

The authorities tightened foreign exchange regulations numerous times over the previous fiscal year in response to the shortage, upping the percentage of foreign exchange companies’ must surrendered to the government (central bank) to 70 percent. Even exporters had to deal with the shortage because the restriction prevented them from using more than 20 percent of the foreign exchange they had earned.

Another major economic burden that persisted in the country last year was the widening budget deficit, made worse by the war in the North, which increased spending for military. The budget deficit widened and is now expected to exceed 300 billion birr this year, which is more than twice what it was in the just-ended fiscal year. These difficulties compelled the government to take desperate decisions, such as freezing loans or introducing new taxes, in an effort to increase revenue and narrow the mounting deficit.

However, not every problem can be solved.

For many workers in industrial parks, the suspension of Ethiopia from the African Growth Opportunity Act (AGOA), a trade benefit granted by the US to developing countries so they may export their goods without paying an import duty, has been a bad news.

Due to significant layoffs brought on by the suspension, more than five factories have left the park, and over 5,000 workers have lost their jobs as a result.

“The year has been tough for all workers in Ethiopia. From the inflationary pressure to the war that has made many jobless, they have been in a pickle. Some had to live in poverty since their salary is not enough to cover expenses,” said Kasahun Follo, president of Confederation of Ethiopian Trade Union (CETU), urging employers to consider the challenges and make adjustments in the coming New Year.

Although the amount of jobs created by industrial parks is relatively low compared to the agricultural sector, the country had planned to industrialize. For Heinisch, these efforts are now being thwarted.

“Worryingly, since 2019 the share of the industrial sector in GDP has actually decreased. The trend is likely to have continued in the past fiscal year,” he said.

Despite the difficulties last year, industries did well.

The export of industrial items reached a record-high USD 500 million in exports during the previous fiscal year. However, this is negligible in light of the development in the coffee industry, which generated USD 1.4 billion in revenue during the previous fiscal year. It is a success that has helped officials to record the nation’s record-high exports revenue, which exceeded the USD four billion mark during the previous fiscal year.

Despite some progresses, however, the overall economic condition seems to be in worst shape, according to economists.

“We have undertaken a study and discovered that the economy is not in a stable condition, which is indicated by the unpredictability of the exchange market, the fiscal policy and the forex market, adding to global-wide problems,” said Tewodros Mekonnen (PhD), an economist and a policy analyst.

Another economist, Mengistu Ketema (Prof.), also believes the economy had not been in a good condition last year.

“Inflation was growing, above 30 percent throughout the year. External debt are maturing, thus forcing the country to allocate more budget for debt servicing. The drought in the south also worsened the already tense situation. And when you add all these to the global economic challenges, including the war in Ukraine, it indicates the economy is between a rock and a hard place,” Mengistu said.

For Heinisch, who believes Ethiopia did not experience a “post-COVID” recovery in 2021/2022 as many other countries did, the outlook is more benign, assuming that the war that has broken out again will come to an end quickly and the country can focus on its economic reforms again. “Debt restructuring could free up resources that the country needs for reconstruction but also new investment projects. So there is still reason for hope,” Heinisch concluded.

The envoy is wrapping up two weeks in the Horn region.

“He remained actively engaged with the Government of Ethiopia, with the Tigray regional authorities, with the African Union, and with international partners to seek to advance an important effort to bring peace. He met on September 12 with the AU’s high representative, Obasanjo,” stated Price.

On September 16, 2022, the US embassy in Addis Ababa also stated that Hammer held productive meetings with Ethiopian government officials, civil society representatives, the African Union, and international partners.

Moussa Faki, the AUC chairperson, who extended Obasanjo’s mandate on September 10, 2022 to continue engaging with warring parties in Ethiopia, also met with Hammer on the next day. On the other hand, the UN Security Council, which was set to discuss the situation in Ethiopia, was postponed.

The five months of ceasefire and humanitarian assistance to Tigray were shattered when the third wave of war broke out on August 24, 2022. The ongoing peace initiative under the AU umbrella hit a deadlock, which the special envoy is trying to reactivate.

The Tigray regional government, which has been refuting AU-led peace negotiations prior to the latest war, also issued a statement on September 11, 2022, agreeing to negotiate under the AU umbrella.

Nonetheless, reaching a ceasefire agreement and resuming the peace talks remains farfetched, worsening the humanitarian crisis, as Eritrean forces are reportedly drawn into the war and regionalizing the conflict.

“These actions are worsening the humanitarian situation at a time of pronounced drought and food insecurity,” stated Price.

He called on the government of Ethiopia, Tigrayan authorities, and all parties to allow the unhindered delivery of humanitarian relief.

“Humanitarian assistance should not be used for military purposes—it should be used to save lives. And we urge the parties to cease the fighting and to begin talks under the auspices of the AU as soon as possible. Peace needs to be given a chance. Too many people have died, and too many more are suffering,” he added.

“Our region doesn’t have the capacity to mobilize this amount of budget for the recovery. It definitely needs the federal government’s support more than this,” he asserted.

The commission’s requests to various UN entities operating in Ethiopia to share documents and materials of interest were largely deflected, or responded to after an inordinate delay. Its request to access the internal database of the joint investigation team was also delayed.

“Despite these challenges, the Commission is confident that its findings are supported by information that satisfies the standard of proof for UN investigations,” the report reads.

The commission’s recommendation, which asks the UN Security Council (UNSC) to include the war in northern Ethiopia on its agenda for the 14th time since December 2020, worries the Ethiopian government more than the report’s findings and conclusions do.

In order to stop further violations and abuses of international human rights law and humanitarian laws, it also calls on the council to take action targeted at restoring peace, stability, and security in the area. During a session held this week, officials of the federal government have already expressed their resentment at the recommendation of the commission.

“The Commission’s political pronouncements referring to the UN Security Council are ultra-virulent and betray political motivations that go beyond human rights,” Zenebe said.

It is a sentiment shared by countries that are members of the Human Rights Council.

“The Commission went beyond its mandate and made a statement on things that were not in its remit,” said Konan François, a representative of Côte d’Ivoire on behalf of a group of African States.

Wondemagegn Tadesse (PhD), an international human rights lecturer at Addis Ababa University, believes there are three options in which the UN Human Rights Council can decide to approve the commission’s report and recommendations. The first option is to end the matter within the council itself.

“In this case, there will be nothing more to do than call on the warring parties in the country to implement these recommendations,” Wondemagegn explained.

The second option is to refer the matter to the UN General Assembly. “However, since the assembly gathers over a long period of time, it may not have a big impact on Ethiopia,” he added.

Apart from that, even if it is presented to the General Assembly, its voting system does not have veto power, so there is a high possibility that it will not be approved. A large number of developing countries at the General Assembly will not vote in favor of the resolution as they consider such decisions as interference, according to Wondemagegn. Moreover, experience so far shows that if the country in which the decision is made does not accept the decision, the chances of its implementation are low.

However, if issues are referred to the UNSC, the third option may take a different path than the two options.

“The Security Council is the only institution that has the power to take military action among the UN institutions, but as we always see, the proposal to the Council is overturned by the veto power, so it does not make a difference,” Wendmagegn asserted.

In the past two years, the council has not passed any decisions on Ethiopia. The war in northern Ethiopia and the Great Ethiopian Renaissance Dam have been on the agenda tabled before its members for discussion. When a resolution was proposed, China and Russia, who have veto power, supported Ethiopia.

For Wondemagegn, even if the Security Council passes a resolution, it is difficult to implement it. If the Council decides to send troops to stop human rights abuses, there may not be many countries to contribute troops to a country as large as Ethiopia.

“Even if countries contribute soldiers and send them to Ethiopia, they will have to fight a war with Ethiopia because the Ethiopian government will not accept the decision. No one wants this,” he said.

Another human rights expert, who asked not to be named, explained that even if the UN Human Rights Council does not pass any decision as a result of this report, countries that want to take unilateral action can use it as a cause for their measures.

“Those like the US and the EU may use the report to suspend loans and impose sanctions,” the expert said, adding, “but this would only hurt the people affected by the war more.”

The Ethiopian Human Rights Commission also agrees with this idea.

“Decisions should be made to reward the people affected by the war and bring reconciliation, not where parties with differences of opinion are dragged into a corner,” said the Deputy Chief Commissioner for Human Rights, Rakeb Melesel, while underscoring that EHRC is ready to share its database if the Commission is willing to undertake another investigation.

The Ethiopian government is exerting pressure to block any attempts by the Commission to extend its mandate. “The Council should reject the report and oppose any attempt to extend the mandate of this Commission beyond December 2022,” the government emphasized.

Farmers reject the much-anticipated Bt cotton.

Cotton growers in Ethiopia resort to unauthorized GMO cotton illegally smuggled from Sudan. Bt-RR cotton seed is currently being cultivated in Afar, Metema, Benishangul Gumuz and Gambella regions after being smuggled via Metema, Humera and other border areas between Sudan and Ethiopia.

Once the first generation of open-pollinated (OT) is acquired, it can be sown for between three and five years, after which the seed cannot be recycled. Ethiopian cotton farmers are currently buying the smuggled cotton seeds and multiplying them locally at 10,000 birr to 13,000 birr per quintal.

Bt-RR originated in Brazil, and was largely cultivated in Sudan. Most other GM cotton seeds are non-OT, which means they cannot be used after the first year. As a result, the farmer has to buy the seed every year.

The cotton farmers The Reporter talked to underlined that the smuggled cotton seed is preferred mainly because it resists bollworm, which has been devastating the existing local cotton breeds. This is because a one-time chemical spray on the vegetation is also highly effective in eliminating all weeds except the cotton itself.

The productivity of the Bt-RR is between 10 and 14 quintals per hectare, slightly superior to the local varieties. But the Bt-RR is advantageous mainly because it beats the bollworm, and requires less pesticide.

“A number of farmers are now multiplying the Bt-RR seed and selling it to cotton farmers across the country. The farmer liked the seed, instead of the local existing varieties and the GM cotton approved by the government,” said a manager of a large-scale cotton farming company. He cultivated the new seed on 200 hectares in Amhara regional state.

Melkamu Telake, board chair of the Ethiopian Cotton Producers, Ginners, and Exporters Association, says farmers are resorting to smuggled seed as access to other cotton seeds depletes. “The government failed to provide the type of seed preferred by the farmer.”

After the Parliament legislated the GMO proclamation in 2015, the Biosafety and Invasive Alien Species Follow-up and Control directorate at the Environmental Protection Authority (EPA) and EIAR commercialized Bt cotton for the first time in 2019.

However, a number of commercial cotton farmers in Gambella have tried Bt cotton and lost interest after the first year. The first reason was that the authorized Bt cotton could not effectively resist the bollworm.

The other major reason was that the authorized Bt cotton, which is imported from India, is expensive costing USD 28 per kilo. As a result, the EIAR picked Indian-based JK Agri Genetics Ltd. to open a subsidiary company in Ethiopia and multiply the seeds in Ethiopia to avoid the forex problem required to import the seeds annually. However, this plan also bore no fruit, as the Ethiopian farmers rejected the authorized Bt cotton.

“All the cotton farmers in Ethiopia are boycotting the authorized Bt cotton. It did not effectively resist the bollworm. It necessitates the repeated application of insecticides and pesticides. We have to buy the seeds every year at an expensive price. Plus, our farmers lack the technology required to cultivate the authorized Bt cotton with the right agronomical practices. So the farmers are resorting to the smuggled variety, instead,” said Melkamu.

Mesele Mekuria, Cotton Development Director at the Ethiopian Textile Industry Development Center, also said the authorized Bt cotton did not work.

The productivity of existing cotton seeds in Ethiopia, which are Ggedera and DP90, dropped, especially after the varieties were in use for over 30 years and were unable to resist diseases. Currently, rain-based farming of traditional seeds offer anywhere between eight quintals and 28 quintals per hectare.

However, if irrigation is coupled with precise agronomical practice, the local seeds can offer between 45 quintal and 54 quintals per hectare, according to Melkamu.

“Big cotton farmers like Lucy in Afar, and other farmers in Arbaminch have achieved this level of productivity. But there are certain interest groups who are trying to enforce certain Bt cotton on Ethiopia. We need GMO cotton only after we achieve maximum productivity with the existing local varieties,” Melkamu said.

These interest groups, according to him, do not want the local varieties. “Global GMO patent holders are behind these interest groups. Once we start using such GMO varieties, we will be their slaves because the existing local varieties will be ousted in five years and we have to buy their seed every year.”

Yet, other cotton farmers argue that the EIAR has to take samples of the Bt-RR that are smuggled from Sudan, study them, and approve them for Ethiopian farmers.

The meager productivity of local cotton farming has been the Achilles heel for Ethiopia’s aspirations to become the manufacturing hub of Africa, mainly capitalizing on textiles, garments, and apparel.

Damage to health and education infrastructure in six regions of Ethiopia resulting from conflicts need a USD 3.6 billion recovery budget, according to a new Recovery and Rehabilitation Plan document released by the Ministries of Health and Education.

The ministries outlined an intervention plan for the five-year rehabilitation project that will be implemented in three phases. The recovery intervention plan is part of the “Response – Recovery – Resilience” project launched by the Ministry of Finance in March 2022.

The ministries assessed the damage that occurred in Tigray, Afar, Amhara, Benishangul-Gumuz, Oromia, and Konso zones of the Southern Nations Nationalities and People’s (SNNP) regions. The assessment and recovery plan were prepared by the government, with a technical assistance from the World Bank.

Education suffered the most harm. According to the recovery plan, the sector requires USD 2.2 billion to recoup lost learning and rebuild destroyed facilities.

The Ministry of Health’s plan proposed a USD 1.4 billion intervention.

As the assessment shows, the conflict destroyed 2,681 schools completely and another 4,158 schools partially in these regions. 38 Technical and Vocational Education and Training (TVET) institutions and three universities have also sustained varying levels of damage. The number of destroyed TVETs and universities in the Tigray region is not included due to a lack of data.

This destruction of the education sector has affected more than 4.2 million learners and close to 200,000 teachers and education staff, the report reads.

The number of people affected by the damage to the health sector is estimated to be close to 24 million people. The people in conflict-affected area have been “adversely impacted.”

The assessment showed that 3,217 health posts, 709 health centers, and 76 hospitals were partially or completely damaged in the six conflict-affected regions.

Among the six regions that were affected, the Amhara region suffered the most damage to the sectors. Out of the 3,217 health facilities that sustained damage, 69 percent of them are found in the Amhara region. Furthermore, out of 248 ambulances that were damaged or looted, 50 percent were in the region.

The region’s 4,020 schools have also been destroyed, accounting for 58.7 percent of the total damage across all six areas.

However, given the region’s penetration of health institutions, the damage to health facilities in Tigray is substantially greater. 82.9 percent of the region’s hospitals have been damaged. The same fate has befallen Tigray’s 76 percent of health posts and 50 percent of health centers.

In the health sector, out of the overall estimated recovery cost, USD 1.4 billion, the largest share, USD 501.19 million, is for health centers. General and specialized hospitals follow at a cost of USD 342.54 million.

In the education sector, USD 1.36 billion is planned to recover damaged primary and secondary schools in the six regions.

The recovery and reconstruction program will be implemented for five years in three phases, according to the documents prepared by the ministries. The program’s early recovery phase needs will be met within the first six months. Short-term demands range from six to 24 months, whereas medium-term needs range from three to five years.

According to the ministry’s Stakeholder Engagement Plan document, the implementation of the program will be led by a Federal Project Coordination Unit (FPCU) in the Ministry of Finance. Various sectoral ministries and other mandated offices are responsible for the implementation of the program.

In the Tigray region, where the ministries have no access, the recovery project is planned to be implemented by a third party. The Ministry of Finance signed a third-party implementation agreement with the United Nations Office for Project Services (UNOPS) last month.

The World Bank granted USD 300 million in May for the implementation of this project. While the government, which has just begun its fiscal year, has allocated 20 billion birr.

Abiy Ahmed’s (PhD) time as Ethiopia’s prime minister is not without difficulties. He even called himself “a Prime Minister with no time to even undergo a medical checkup” in front of lawmakers. Since taking over after Hailemariam Desalegn’s departure, Abiy has ruled a nation that has been plagued by economic distress, political unrest, and even a civil war that has lasted for more than a year. On top of the never-ending problems he dealt with, with most of the incidents occurring in the northern part of the country, there was another heavy task that challenged his leadership. That is the statehood question brought by ethnic groups living in the south.

A few months after taking office, Abiy was inundated with requests from the leaders of more than a dozen zones and woredas, placing pressure on his government to help them realize their desire for a regional state. Participation in the endeavor to achieve statehood recognition ranged from low-level bureaucrats to zonal leaders and officials in the federal government. Ten zones filed a resolution with the House of Federation (HoF) adopted by their separate councils to hold a referendum on statehood. Abiy was aware right away how urgent it was to fulfill the regions’ desire.

Soon after taking office, Abiy traveled to almost all of the South Region’s ethnically divided zones. It was an attempt to win political support as he rushed to replace the Ethiopian Peoples’ Revolutionary Democratic Front (EPRDF) at the time and establish the ruling Prosperity Party. But his administration’s stance on their desire for statehood was the main topic that dominated the debates at the zones. He promised to respond to their request, which by all legal criteria is legitimate.

However, it was easier said than done to keep the pledge. Sidama was the first regional state to be established following a referendum, with 98 percent of voters supporting the establishment of a new regional state. But civilians paid a price for the government’s efforts to push through Sidama’s desire for statehood, as enraged protesters set fire to the homes of many Hawassa inhabitants and forcibly evicted many others.

In particular, ethnic Amharas were targeted in all incidents involving statehood questions across the South Region. The Attorney General recently released a report that the homes of ethnic Amharas were burned to ashes, which led to the arrest of dozens of people on suspicion of being involved in the violence.

It appears the government understood the consequences of ignoring statehood questions were brought by Ethiopians to the south. Abiy formed a team of experts and high-level government officials two years ago to launch a study on the issue after realizing the consequences of disregarding statehood requests.

The team sent out three recommendations. The first option is to maintain the South Nation, Nationalities and People’s Regional State in its present configuration while making changes to the region’s appropriate number of political seats. The second suggestion was to establish the Sidama region while keeping other ethnic groups as members of the SNNPR. The third involved splitting the region into five, clustering the ethnic groups together.

The third alternative seems to be what the federal administration chose after the first two became unworkable due to rising animosity among ethnic group elites in South Ethiopia.

“I think it’s a step in the right direction, but caution should be exercised to avoid making the same mistake as SNNPR, which is now being dismantled due to growing resentment over resource sharing, political participation, and infrastructure development,” said Keyredin Tezera, assistant professor of Social Anthropology who participated in the study carried out at the request of the federal government.

Following Sidama’s victory for independence from the SNNPR, Kaffa, Sheka, Bench Sheko, Dawuro, and West Omo Zones, as well as the Konta Special District, joined to form the South West Region through a referendum. The local council members of five special Woredas – Amaro, Ale, Basketo, Burji, and Derashe – as well as the Konso, Gedeo, Gamo, Gofa, South Omo, and Wolayta zones voted last week to restructure their administrative units into a newly established regional state.

In a similar fashion, members of the Hadiya, Halaba, Kembata Tmbaro, Silte, and Yem Special Woreda local councils have begun the process of creating a new regional state. However, activists and political organizations active in the zones contested the action.

The Gurghe people, with whom the federal government wants to construct a cluster along with Hadiya, Silte, Kembata, Silte, and Yem, are among those who have objected to the concept of forming regions in clusters. The Guraghe zone has a population of approximately six million people and a land area of approximately 5932 sq.km. Its council was one of the zones that submitted a request to hold a vote on becoming a separate region.

Social activist, Misbah Kedir, is one of the ethnic Guraghes who have contested the federal government’s proposal to partition SNNPR into five cluster areas. He thinks it is wrong for the central government to “forcefully” incorporate the Guraghe Zone into the cluster.

“In addition to Guraghes, other zones that had voted to create a cluster region had also supported the motion after receiving an order from the federal government,” said Misbah.

Wolayita’s opposition wants to be heard too.

“First and foremost, the council, whether in Wolayita or other zones, does not have the power to accept such a resolution on behalf of the people because their term period ended almost seven years ago. Second, this is something that the cadres, not the people, want,” said Amanuel Mogiso, leader of the opposition Wolayita National Movement, which is active in Wolayita Zone.

Amanuel exhorts the federal government to pay attention to what the people want, comparing the situation to sitting on a ticking time bomb. “The Wolayita people have peacefully expressed a desire for their own territory. They need to be heard,” he added.

The politician urges the federal government to avoid meddling and let ethnic communities in SNNPR, including Wolayita, exercise their constitutional rights. “To reject their right to have their own regional state is unlawful,” Amanuel continued.

Jember Abdo, a legal expert, agrees.

“The state is turning into an enabler of violence. In the case of Guraghe, this is what I saw. The people exercised their right to form a region but the federal government’s response was to militarize their hometown,” Jember said urging the federal government to uphold the constitution.

There are economic reasons driving the pursuit of statehood.

“In order to obtain a permit from SNNPR officials, farmers and businessmen must travel hundreds of kilometers from distant areas in the Guraghe zone to Hawassa. And after the cluster region is established, they might be required to follow suit in order to obtain a permit from Hossana, which will likely serve as the cluster region’s capital city,” Misbah said.

Amanuel is worried too.

“The political structure is to blame for the underdevelopment of zones. When you have a significant budget and tax in a region, it is not the same,” Amanuel concluded.

Regardless of the final outcome of the campaign to achieve statehood for Ethiopians in the South, there are still many unknowns about the future of the region, which will depend on the government’s decision on how to manage the grievances of the ethnic groups it intends to organize into a cluster region.

Sergey Lavrov, Russia’s Foreign Minister, affirmed that his country is in favor of giving Africa a permanent seat in the UN Security Council. The Foreign Minister also concurred with Ethiopian officials that the Security Council should undergo reform in a bid to take into account the current state of the world.

Lavrov arrived in Addis Ababa on July 26, 2022 for a two-day trip, where he met President Sahlework Zewde; Demeke Mekonen, deputy prime minister and foreign minister, and other high officials. Lavrov also traveled to Egypt, Congo, and Uganda, before wrapping up his Africa trip by conferring with the diplomatic community at the AU headquarters.

“Ethiopia and Russia share similar stances on issues on the global and regional agenda. These approaches rely on adherence to international law, particularly the tenets of the UN charter and the respect for the sovereign rights of states,” said Lavrov.

During the 35^th ordinary session of the AU summit in February 2022, PM Abiy Ahmed (PhD) exceptionally raised the urgent topic of reforming the UN and securing a permanent seat for Africa in the UNSC.

As a result, the AU passed a resolution that requests “full representation of Africa in the United Nations Security Council, including not less than two permanent seats in the United Nations Security Council with all the prerogatives and privileges of permanent membership, including the right of veto.

The AU also proceeded to request the Committee of Ten Heads of State and Government to continue to intensify its engagement at the highest level with other interested and regional groups and key stakeholders, including the five permanent members of the UN Security Council, with a view to building on progress made in advancing, canvassing and promoting the Common African Position.

The AU’s quest for reform of the UN began in 2005 when African states approved the Ezulwini consensus and Sirte Declaration on the Reform of United Nations Security Council.

In 2010, President Goodluck Jonathan of Nigeria, told the UN General Assembly, “The exclusion of Africa from the permanent member category of the Security Council can no longer be justified. We urge the UN to quicken the pace of its reforms. Not only to better reflect the current global realities but also to ensure that it enjoys genuine legitimacy.”

Africa does not have a proportional representation in the global body.However, the consideration has become critical, as Africa is frequently impacted by decisions over which it has no say.

In particular, both Ethiopia and Russia have been haunted by the UNSC particularly since last year. In the past year, the UNSC discussed sanctioning Ethiopia in relation to human rights violations in the Tigray war. However, the considerations were vetoed by Russia and China. Ethiopia also paid back by refraining from voting, when the UNSC introduced emergency voting in March 2022 to condemn Russia’s invasion of Ukraine.

Demeke appreciated Russia’s “unwavering support during difficult times of need, particularly in the recent struggle to safeguard Ethiopia’s sovereignty.’

The major purpose of Lavrov’s trip to Africa, amidst a propaganda war with the west, is also to secure Africa’s support in similar UN voting scenarios in the future.

Gaining a permanent seat on the UN Security Council will position Africa as a balancing force between the power struggles of the east and west, as well as the rapidly changing global geopolitics. However, reforming the western-dominated organization might not be easy, according to scholars. But once the UN begins processing the AU’s request, Russia and China can play a decisive role in making Africa earn its place in the UN structure.

Over 60,000 foreigners have registered so far

Ethiopia’s Ministry of Foreign Affairs urged foreigners with expired visas and resident permits to get registered in 125 selected areas of registration established for this purpose.

Speaking at a press conference on Thursday, Ministry Spokesperson Meles Alem (Ambassador) has urged all foreign nationals living in Ethiopia without proper documents to be registered immediately before authorities start to take legal action as per the international law Ethiopia has signed.

Foreigners without any visa or residence permit, as well as refugees or asylum seekers requesting status and residing in Addis Ababa and its vicinities with or without an urban refugee permit, are also requested to register as of July 25, 2022.

According to Meles, within the last five days of the official announcement for registration, over 60,000 people have registered from countries including Canada, America, Eritrea, Congo, Italy, Syria, China, Turkey, Ghana, Burundi, Liberia, India, Bangladesh, South Sudan, and other countries.

The first phase of registration sites is installed in Addis Ababa and some Oromia administrative zones, and the second round of registration will be opened soon in regional states and the Dire Dawa City administration, the spokesperson told the reporter.

Registration is conducted under the auspices of the Immigration and Citizenship Service, through the Vital Events Registration Offices of all Woredas and the Immigration and Citizenship Service, as per its mandate given by a proclamation to register and administer legal permits for foreign nationals living in Ethiopia.

“We have started this to make sure that immigration work is proceeding as per the legal procedures,” said Meles (Ambassador), adding that there is no further intention of expelling or any other form of stunt.

The spokesperson has further called on foreigners to take advantage of this chance before officials start to take legal measures against those who failed to register as per the rule. However, the formal registration process will not be applied to the diplomatic community.

Over 180,000 foreigners are expected to be registered in Addis Ababa, Meles added.

In a similar presser, the spokesperson announced the cancellation of 162 million US dollars of rolling debt by the Russian government, which Ethiopia has borrowed since the Soviet Union period. According to Meles, Russia has changed the modality from debt to a development grant for purposes of modernizing the Melka Wakana Hydroelectric Power Station and upgrading Balcha Hospital’s technical capabilities.

Over 60,000 foreigners have registered so far

Ethiopia’s Ministry of Foreign Affairs urged foreigners with expired visas and resident permits to get registered in 125 selected areas of registration established for this purpose.

Speaking at a press conference on Thursday, Ministry Spokesperson Meles Alem (Ambassador) has urged all foreign nationals living in Ethiopia without proper documents to be registered immediately before authorities start to take legal action as per the international law Ethiopia has signed.

Foreigners without any visa or residence permit, as well as refugees or asylum seekers requesting status and residing in Addis Ababa and its vicinities with or without an urban refugee permit, are also requested to register as of July 25, 2022.

According to Meles, within the last five days of the official announcement for registration, over 60,000 people have registered from countries including Canada, America, Eritrea, Congo, Italy, Syria, China, Turkey, Ghana, Burundi, Liberia, India, Bangladesh, South Sudan, and other countries.

The first phase of registration sites is installed in Addis Ababa and some Oromia administrative zones, and the second round of registration will be opened soon in regional states and the Dire Dawa City administration, the spokesperson told the reporter.

Registration is conducted under the auspices of the Immigration and Citizenship Service, through the Vital Events Registration Offices of all Woredas and the Immigration and Citizenship Service, as per its mandate given by a proclamation to register and administer legal permits for foreign nationals living in Ethiopia.

“We have started this to make sure that immigration work is proceeding as per the legal procedures,” said Meles (Ambassador), adding that there is no further intention of expelling or any other form of stunt.

The spokesperson has further called on foreigners to take advantage of this chance before officials start to take legal measures against those who failed to register as per the rule. However, the formal registration process will not be applied to the diplomatic community.

Over 180,000 foreigners are expected to be registered in Addis Ababa, Meles added.

In a similar presser, the spokesperson announced the cancellation of 162 million US dollars of rolling debt by the Russian government, which Ethiopia has borrowed since the Soviet Union period. According to Meles, Russia has changed the modality from debt to a development grant for purposes of modernizing the Melka Wakana Hydroelectric Power Station and upgrading Balcha Hospital’s technical capabilities.

Special Forces of Somali regional state and a coalition of other regional and federal security forces have conducted an all-out counter attack to purge Al-shabab fighters that entered Ethiopia’s borders on Friday. The regional government deployed hundreds of Special Forces to conduct the operation.

“A number of Al-shabab fighters entered the Ethiopian border, after they conducted an attack at a time nobody expected. They first engaged with Somali Special Forces. And heavy casualties occurred on both sides. But we are clearing them out,” said an official in the regional government, who spoke to The Reporter requesting to remain anonymity since the federal government is also involved and information is to be disseminated from the center.

“We have also captured their fighters, and the operation will continue until they are cleared out from the area,” added the official.

The terror group first attacked two border towns in Somalia’s side on July 20, 2022, on the same day Somali regional state officials convened to evaluate its security forces performance.

After the first clash at Yeed and Aato towns in Ethio-Somalia border, the militants reportedly killed twenty Ethiopian forces including three civilians. The group lost 63 of its own.

The al-Qaeda linked group tried to enter Ethiopia through Afder zone in southern part of Somali region.

Apart from a strong presence by Ethiopian forces in the border areas, Ethiopia also deployed close to 4,000 troops in Somalia under the AU Transition Mission in Somalia (ATMIS), a reconfigured version of the former AU Mission in Somalia (AMISOM). Ethiopian troops maintain a stronghold in Baidowa.

However insiders question why Al-shabab is attacking Ethiopia at this moment.

“The attack is intended to divert the attention of Ethiopia. Al-shabab is conducting the attacks in coordination with the TPLF and other insurgents in Ethiopia,” said a security expert who focuses on Al-shabab.

Other insiders also link the rising Al-shabab attacks with the instability in Ethiopia. The restructuring of AMISOM and controversies shadowing the continuity of ATMIS, is also contributing to Al-shabab’s resurrection.

Over the past few months, Al-shabab’s attacks have evolved from suicide bombings to attacking military bases in Somalia, including an AU military base. Experts stress that the group is gaining momentum as Horn of Africa countries are occupied with domestic conflicts and the EU, the largest financer of AMISOM/ATMIS, is backtracking.

A few weeks ago, the newly elected Somalia President, Hassan Sheikh Mohamud said negotiations should be considered with Al-shabab, a rare gesture, which is becoming almost a shadow state.

However, the militant group in a statement said it fights to establish an Islamic state in the Horn.

In a continued conflict in West Wollega Zone, over 1,105 civilians are killed this year, including 28 officials who were shot in one day. The zone has also lost properties worth over three billion birr to extended conflict during the just ended fiscal year.

Reports of the devastating impact of the conflict presented to the Caffee Oromia, council of the Oromia regional state, which held its annual meeting over the week. Gammachis Dabala, administrator of West Wollega zone, told the council that both ethnic Amhara and Oromo are killed in his zone.

The regional government has repeatedly launched operation to eradicate the Oromo Liberation Front (OLF-Shene) group, which designated terrorist by the House of Peoples Representative (HPR) and still maintaining West Oromia as its stronghold. During the last month alone, the group has killed hundreds of civilians, according to Ethiopian Human Rights Commission (EHRC) reports. PM Abiy Ahmed called it “a massacre.”

Most of the zones of Oromia are currently under threats of the insurgent group, according to official reports. Loss of life, property damages, and closure of schools are also tolling across the regional state. In North Shewa alone, some 195 schools remain closed, while over 75,000 students were out of school, according to the report presented during the Caffee meeting.

Taye Dendea, member of the Oromia Prosperity party and state minister of Peace, was at dismay after attending the Caffee meeting. “Last year, only few woredas of Oromia were affected by conflict. Currently, eight zones of Oromia have security threats. We failed the people that elected us just last year. The Oromia Regional Government failed to fulfill its duty to protect the civilians. The damage up on our people is shocking. Externalizing the problem cannot be a solution,” he wrote on Facebook after the meeting was concluded on Friday.

The state minister also harshly criticized the budget allocation of the just started 2022/23 is not enough to fight the insurgents. Nearly 400 million birr is allocated for the regional security budget, which the state minister argues should be more than one billion birr. This accounts for less than one percent of 158.6 billion birr budget approved by the Caffee.

However, the state minister did not mention shortcomings of his ministry why the insurgent group is remaining at large.

Businesses that are registered in Tigray region as a federal taxpayer but are currently located outside the region will be paying their taxes at the Northwest Branch of the Ministry of Revenue in Addis Ababa.

The federal revenue that should have been collected in the region will be collected directly by the ministry. The tax that should have been collected by the regional government will be deposited in a trust bank account.

The ministries of finance and revenue are implementing this temporary procedure because organizations and individuals registered as taxpayers in Tigray are having a difficulty to continue their business activities in other parts of the country, according to Abaynesh Abate, the ministry’s tax declaration director.

Despite their desire to continue working in their current location, the taxpayers were unable to renew their business licenses, vehicles or construction equipment.

Abaynesh said that they could not obtain loans, bid on contracts or receive other government services. “Some of them even claimed that the house they rented for their business was in trouble since their business license had not been renewed.”

More than 100 complaints from Tigray’s taxpayers have been lodged to the ministry, and the number continues to grow. The majority are taxpayers who must pay taxes to the regional government.

Abaynesh says among the complainants, ten are Tigray registered firms that are managed by Commercial Nominees and pay federal taxes.

She explained that after the ministry informed the Ministry of Finance about the complaint in April, it allowed taxpayers to get a temporary tax clearance through a temporary procedure or register as taxpayers elsewhere.

In a letter written by the Ministry of Finance to the Ministry of Revenue last month, it acknowledged the regional government’s authority to collect the tax revenue in Tigray region.

The minister cited Article 96 of the Constitution to explain saying, “Since the income collected from individual businessmen and regional public enterprises is a regional income, it is clear that it is the regional government that can levy and collect tax.”

On the other hand, the letter explains that the tax collected from private organizations located in the region is the joint income of the federal and state governments, levied and collected by the federal government. But the income collected from federal public enterprises located in the region is the income of the federal government.

Nevertheless, since both taxpayers registered in Tigray are facing difficulties to conduct their activities due to the “emerging security problem,” State Minister, Eyob Tekalegn, in a letter stated that it is necessary to establish a temporary system.

The Ministry of Revenue, which has designated the North West branch in Addis Ababa’s Lideta neighborhood, will ensure that these taxpayers receive their tax clearance.

Abaynesh added that a request has been made to the Ministry of Finance to open a trust bank account where regional taxpayer revenue will be put.

“It will be held in a trust for later transfer to the region,” she explained.

According to Abaynesh, the ministry would only collect the taxes submitted by taxpayers because there is no means to check how much the region’s taxpayers owe.

“We don’t have any information to show how much they should be paying at that point. When the situation in the region stabilizes, it will be thoroughly examined” Abaynesh elaborated.

If taxpayers want to shift their workplace to their current address after receiving their tax clearance, registrations will be completed at the preferred address.

Under typical circumstances, changing a company’s address requires amending the company’s establishment document and submitting meeting minutes. Providing permission to change address is the authority of the regional government. All these requirements are not necessary expected to be meet in the temporary procedure.

However, even though both federal and state taxpayers registered in the state will be issued a tax clearance certificate from the Ministry of Revenue, they cannot sell their property. According to the Ministry of Finance’s letter, it is impossible to verify whether they have tax debt or not in the current situation.

Berhane Mewa is not only the former president of the Ethiopian and Addis Ababa Chamber of Commerce and Sectoral Associations, but is also a lifetime patriot in Ethiopia’s private sector struggles against state domination in the economy. Before he was forced into exile eighteen years ago by the EPRDF regime, he took up the struggle to create an independent chamber system and a real private sector in Ethiopia.

An industrial chemist by profession, Berhane came back to Addis to process a pharmaceutical investment license, to the tune of USD 22 million. He already has a plastic and rubber factory, which he established before his exile to the US.

Despite positive signs in the politics arena, Berhane argues the chambers system is still far from defending the private sector’s interests and contributing to the economy. Ashenafi Endale was granted audience. Excerpts:

The Reporter: What was at the core of your struggle for the Ethiopian private sector?

Birhane Mewa: I was forced to leave Ethiopia eighteen years ago. The government at the time was not happy with struggle in the Chamber, to create a strong private sector. I had no political interests. But after I left Ethiopia, I became a member of Kestedemena and Coalition for Unity and Democracy (Kinijit) political parties in North America. I was the secretary in Kinijit’s international leadership wing.

After Kinijit’s leadership were released from prison, I went back to normal life and started working as a business consultant, and then as a project manager. Of course I traveled to Ethiopia in between to attend my wife’s funeral. But now, I came to Ethiopia to process an investment license.

We are in the process of establishing a pharmaceutical factory in Ethiopia, in cooperation with Ethiopians engaged in the pharmacy business in the US. In general, we are here following PM Abiy Ahmed’s (PhD) call to the diaspora.

What is the kind of Chamber you want to see in Ethiopia?

The Chamber was first established as ‘the Addis Ababa Traders Association,’ during the Emperor’s era. Then it was re-established as Ethiopian Traders Council. It was free and active in advising the government, until Derg completely changed that trend. Derg made memberships mandatory and all businesses had to pay a chamber membership fees after they get their licenses.

Derg also shrunk the number of board members representing the private sector in the council, from eleven to one. At that time, nine of the eleven board members were general managers of state corporations; with only Wubshet Werkalemahu was representing the private sector.

After EPRDF took power, the general managers of state corporations left the chamber. At the time, I was president of the Ethiopian Private Manufacturing Association. So I became vice president of the Chamber to close the vacuum. And when Kebour Gena left, I became president of the chamber, through competition.

The fundamental objective of the Chamber is to advise the government before it introduces polices that affect the private sector and the economy. The second is to provide services for the private sector including trainings, information and arbitration. We were successful on both. Both the Addis and Ethiopian Chambers won various international awards, including the ‘best chamber in Africa’ award.

Nonetheless, the EPRDF was working hard to create divisions amongst, Addis Ababa, regional and sectoral chambers and associations. I worked hard to cut out such divisions and create a stronger chamber. We also managed to get back the chamber’s assets taken by the government. We also managed to access 100,000 sq. m of land for the chamber, on which the Addis-Africa exhibition center is currently being established.

Where is (should be) the exact line between state and private sector roles in the economy?

In principle, the private sector is the backbone of the economy, especially in a free market system. But during the TPLF dominated EPRDF regime; the government tried to replace the private sector by state affiliated endowment companies and state owned enterprises, which are still under party control. They enjoy access to finance, bureaucratic support, information, monopoly and other privileges. This has been stunting the growth of the private sector. I am not sure whether the situation still changed. Party affiliations still control the media, not only businesses and the economy.

Besides those parastatals, there are private businesses parasitic on preferential treatments, provided from the parties. Preferential treatment is still given for businesses, in accessing land, finance, foreign currency, and other privileges. A real private sector, which is self-created and hardworking, is very limited in Ethiopia.

The parties and government affiliated private sectors, still prevail, only changing its face. If you look at past private businesses currently, it is not hard to find a party or state support.

The right private sector should be represented only by the Chamber. It should be free, with no political interests, but defend the interests of the private sector. When we say ‘private sector’, it includes the street vendor and Gulit, to the factory and bank owners. The similarity amongst them is that they have a business license, and a common interest. There are various obstacles that hinder the chamber.

Ethiopia’s future depends on the real private sector. Foreign Direct Investments are also necessary but the domestic private sector is critical in terms of self-sufficiency, sovereignty and retention of repatriation. FDI’s can leave anytime.

Even in the USA, the private sector supports either democrats or republicans. Can a real private sector exist without any affiliation with the ruling party?

If you go to Mercato, everyone works for their own interests. They are not paid by the government but they pay taxes to the government. What the government can do is improve and equalize the playing ground.

Of course the private sector in the US supports parties. The difference is corruption is legal in the US. It is called lobbying and it is not a crime. It is also regulated. But in Ethiopia, parties establish affiliated businesses and keep taking money. The biggest problem appears when the parties themselves engage in the business. This is the biggest problem in Ethiopia. Nobody knows where the money from public enterprises goes to.

Political parties must exit from businesses and the economy. In the US, individuals and businesses giving money to parties, is publicly known, and audited. The tax authority also knows it.

Do you think the existing private sector in Ethiopia can be changed into a real private sector, or should we start over?

A real private sector is not something we create. What the government should do is create conducive environment for a ‘real private sector to emerge.’ It is the demand and supply dynamism that creates a real private sector. There are shoe shiners who have become millionaires. Did the government create them? Of course the government can facilitate support, but without political affiliation.

PM Abiy’s administration rolled out privatization and liberalization initiatives in the past three years. Do you think it is sufficient to re-balance the state dominated economy previously under the EPRDF?

There are positive signs but still some individual businesses are close to the government, instead of organized business communities under the Chamber. I do not think this is good. The government must recognize, capacitate and work with the Chamber. There are improvements regarding regulatory issues and public services. But still there is a chain of corruption in the government system. It is related to power and partisanships, which is a big obstacle that must be reduced. The government has good intentions. There are various issues studied and forwarded by the chamber and sectoral associations. Things will improve if the government reacts on those issues. If it does not start punishing corruption and avoid party affiliation and preferential treatments for selected businesses, the problem will get worse. It is the government that creates a corrupt private sector.

Corruption is also unavoidable when the public servants are paid meager salaries. The government must pay public servants sufficiently. So, corruption is high not because people are bad, or the officials are greedy, but the civil servant takes corruption as supplementary revenue.

The government also drafted a new proclamation to re-establish the Chamber. The draft proposes membership as mandatory, among others. How can a strong chamber be established? Recently, two chamber officials also defected to the US. Why is there always an internal feud inside the chambers structure?

There is a structural problem in the Chamber. It is intentionally created. Making memberships mandatory generates revenue for the chamber. But it hinders the chambers from providing quality service for their members. This was seen during the Derg regime. Immediately after the EPRDF came, it worked hard to weaken all institutions, including the chamber, teachers association, and others. The EPRDF made memberships willingly, to shrink the chamber’s revenue and finally close the chamber due to a lack of fund. But we managed to survive, by improving services and generating revenue from creative works.

Especially, the Addis Ababa Chamber became stronger, at the time, while there were some problems in the Ethiopian Chamber of Commerce. When I was about to leave, there were efforts to change the Chamber’s laws and the government wanted to re-design the Chamber, to fit to the politics.

The Chamber serves wherever there are private businesses, not government structures or political leaderships. But the government shadowed and dominated cities’ chambers, by chambers of regional states. These regional state chambers are under the control of party officials. The Ethiopian chamber also fell under the influence of party members. We tried to avoid those influences and somehow succeeded to maintain a Chamber that represents only the interest of businesses.

The proclamation tried to further divide the chamber across sectors, on top of the regional structure, dissecting the interest of the private sector. Kiosk and garage owners have different interests, but also have common interests. These specific interests should be solved under sectoral associations, and their common interest under the chamber. But what the government did is bundle the sectoral associations and the Chamber together. Businesses with different interests sat on the same table, and failed to agree. So, there is still a structural problem.

I have seen the new draft proclamation too. We are unfortunate the draft did not address the problem still. The chambers and the business community still did not reach a consensus on the draft. The Addis Ababa and Ethiopian chambers are in agreement and sectoral associations have also their won perspectives.

Chambers should work only on general issues that represent the common interests of all businesses and the economy at large, aided by sectoral associations formed separately, representing interests of businesses in specific sectors. Thus, the chamber and sectoral associations should be established separately. I do not know the status of the draft proclamation currently, but if it is ratified, it would take another generation to amend.

So, do you believe the Ethiopian chamber should be the all-encompassing strong umbrella?

Not necessarily. My point is the chamber system should be separate from sectoral associations. Whether at local, cities or a national level, chamber must be strong. But they must align. The issue of sectoral associations is completely different. For instance, leather industries have problems that can be solved both through the chamber, and their association platforms. This is the right way.

For instance, there was the Ethiopian Manufacturing Industries Association. It was challenging the government regarding manufacturer’s interests. Its strong momentum even empowered the chamber. Then the EPRDF practically dismantled it. It even prohibited the association from renting an office. The EPRDF regime never wanted such strong associations and chambers. The reason why the government overlapped chambers and sectoral associations is to deny them on common grounds.

If the draft is ratified, it only maintains the problem. Currently, the government’s system prefers individual businesses, than the organized private sector.

So the draft should be revised and discussed again?

The process of crafting the proclamation has problems from its very inception. The chamber members and business communities have no consensus on the draft. The Ethiopian, Addis Ababa, and regional chambers must sit down and discuss on the issue.

The Ethiopian government is trying to allure investments by the diaspora. If the diaspora invest and save in US banks, or in Ethiopia, which return on investment is attractive? Or do you think the government should design incentive packages for the diaspora?

Businesses in Ethiopia are more profitable than other countries. The reason the US government devised AGOA from the beginning, is because African businesses can be profitable. Even in terms of savings, the return in Ethiopia is higher than Europe or elsewhere. The problem in Ethiopia is not on returns, but convertibility. Repatriation might be difficult. Saving in Ethiopia by itself is profitable, let alone investment. There are so many profitable business sectors in Ethiopia. Many sectors are emerging, and not exploited yet.

The other problem is that the Ethiopian diaspora has lost trust in the government back home. So, the current government must reverse that perception, through transparency, commitment and service efficiency.

Thirdly, the diaspora needs information supply on feasible businesses and projects in Ethiopia. Then the diaspora can form share companies, joint ventures, PLC’s or other investment modalities. If the diaspora know feasible businesses and the laws, then they can invest. Currently, the diaspora is placing their money on the stock market and other businesses abroad. They can divert that money to go back home.

Especially, the profitability in the financial industry in Ethiopia is very lucrative; but the government should facilitate currency convertibility. Plus, most diaspora’s in Europe and the US left Ethiopia three to four decades ago. They are at s retirement age now. So if the health system in Ethiopia is improved, most diaspora’s would prefer to go back to Ethiopia.

The diaspora also wants transparent systems to complain in cases of corruption and bad services. There is corruption in Europe and the US. But it is political corruption not work corruption. Political corruption is trying to twist or influence introduction of policies, proclamations or directives. Work corruption is bribing officials, institutions, and public services. There must be a complaint window for this.

The west has been shifting away from Ethiopia and imposed sanctions. Substantial number of Ethiopians vote, especially in the US. Can Ethiopians and black Africans use their voting power to discard unfavorable officials or parties in the US or influence to reverse such sanctions?

The diplomatic system has a more crucial role in this. To be specific, the US faced unprecedented situation in Ethiopia. A government that refuses foreign pressure emerged in Ethiopia.

The US even used the UNSC to pressurize Ethiopia, meeting twelve times within six months. On top of the strong refusal of the Ethiopian government to surrender, the #nomore movement strengthened the support for Ethiopia, rallying Africans behind Ethiopia. The movement is stronger than election powers. The movement eroded US’s credibility in Africa, and in the world.

Even during calls that Addis Ababa will fall to the hands of insurgents, one million diaspora opted to come back home. I believe Ethiopia will regain its rightful place in the international stage.

Unlike any time before, the diaspora is on the same page now, regarding national issues. Before this, the diaspora’s were highly divided and turned against each other. The division created a negative energy. If the diaspora was united before, the EPRDF could have been long gone. The Diaspora and opposition figures abroad were used to strife, not unity.

Can we say that the US’s pressure is normalizing since the tension with China over the horn escalated?

Their strategy differs. The US wants to ensure its interests through political influence, while China does it through investment and economic empowering. The US’s and China’s struggles will continue, whether Ethiopia is there or not. China, Russia, Turkey, Iran and India, to some degree, are joining the friction now. They have certain interests with or against the US.

The US’s fear is not what China will do in Ethiopia, but the kind of measures Ethiopia takes. For instance, Ethiopia’s normalization with Eritrea and the alliance with Somalia is a threat for the US. When the US told Ethiopia to stop the war, Ethiopia rather turned a deaf ear. Ethiopia filled the renaissance dam, when the US opposed it. These are some of the bold moves against US interests.

These moves have nothing to do with China, but they are decisions emanating from the nature of Ethiopians. So, the confrontation between the US and China continues, while Ethiopia strides to protect and implement its national interests fully.

I do not think Ethiopia will completely shift its diplomatic ties towards China. Imperialism is always imperialism, but it changes its face. The US always wants a government that listens to them. If a government refuses to carry out their interest, they depose that government, including assassinations. In cases such as Libya, Iraq and Syria, the US’s footprints in the countries politics can be seen from afar.

The US put the same type of pressures that worked before, and in Ethiopia’s case, it has failed. But the pressure will continue. Ethiopia has passed a major obstacle. Yet, Ethiopia needs to sharpen its diplomacy more.

At what stage is your investment process currently? What are your future plans?

We are establishing the pharmaceutical factory in Ethiopia, in collaboration with highly professional pharmacists, scientists and business people in the Ethiopian diaspora. Finance, knowledge and vision are required to establish a medicine factory. If you have capital, you can buy knowledge, since it is a commodity.

Our vision is to manufacture medicine and medical equipment’s in Ethiopia and provide for Ethiopians. It is not even about profits. We wanted to improve the medicine supply shortages in Ethiopia.

We have been preparing for the past two years. We came to invest in Ethiopia, amidst the rhetoric that Addis Ababa is about to fall. Our team strongly believes in Ethiopia. Currently, we are processing the investment license.

How much is the investment?

The initial investment will take us between USD 20 million to USD 22 million.

What is your conclusion on the soundness of the Ethiopian economy, especially in post-pandemic and post-conflict endeavors?

My first impression when I came to Ethiopia after almost two decades was that all the negative narratives about Ethiopia and Addis Ababa are wrong. There is still an active economy. Across streets of Addis Ababa, day and night, residents are scrambling to buy from street vendors. This indicates to a huge demand in the economy. This is a living economy.

But it does not mean there are no problems in the economy. There is a forex shortage, industrial inputs shortages, logistics problems and others. Yet, the economy has a big potential, especially if public services are improved, corruption is eliminated and bureaucracy is improved.

Do you think the government should maintain protectionism?

The US and Europe are not afraid of protectionism. Why should Ethiopia be afraid of it? Ethiopia is eager to join the WTO. But Europe is still protecting its agriculture. The US is prohibiting import of wood, aluminum and other items, especially trump did everything to protect local industries. So, Ethiopia must also protect its industries.

After America banned Ethiopia from the AGOA, US companies left the Hawassa industrial park. If it is a local factory, they would not do so.

Before, the US’s private sector had no national interest, instead they go for profits. That is why US industries moved factories to China, in search of a cheap labor. But now, the US government is asking them to come back and create jobs in the US.

The country needs a nationalist private sector. The private sector cannot just seek profits and become a pure capitalist. It must contribute to the social wellbeing and development of the country.

Even FDI’s must be undertaken in a joint venture scheme. If it has a local element, the investment can be sustainable.

How can one balance profit seeking versus national interests? Scholars also say the psychological make-up of Ethiopians is not compatible for capitalism.

Corporate governance, labor unions and social responsibility can balance capitalism. National security should be a concern of the private sector. If there is no security, there is no transport, meaning there is no market. Drought should concern the private sector. These make the private sector become a nationalist by default.

One of the major tasks of the Chamber is to make businesses discharge their social responsibility.

Thus, your conclusion is capitalism can work in Ethiopia.

The old way of capitalism, which is seeking only profits, does not exist anymore. Of course, you are responsible for your shareholders and board members. At the same time, you have to be responsible to the society.

Why you are not investing in the banking sector rather than pharmaceuticals?

The government said it opened the banking sector for the diaspora, but still, there are unsettled problems. It said the diaspora had to invest in foreign currency. This is an obstacle.

But the major reason I joined the pharmaceutical project, is because it is a matter of professionalism. Manufacturing is difficult in Ethiopia. We have a big purpose to bring change in the medical supply shortage in Ethiopia. We will produce capsules and tablets. We will also export, once we address the domestic demand. The company will also establish an R&D wing, which will conduct studies for other firms. Most of the founders are also researchers.

Are you a chemical engineer by profession?

I studied chemistry. I also studied industrial chemistry at Bahir Dar polytechnic. I already have a factory in Ethiopia, which produces plastic and rubber. It is expanding now.

Berhane Mewa is not only the former president of the Ethiopian and Addis Ababa Chamber of Commerce and Sectoral Associations, but is also a lifetime patriot in Ethiopia’s private sector struggles against state domination in the economy. Before he was forced into exile eighteen years ago by the EPRDF regime, he took up the struggle to create an independent chamber system and a real private sector in Ethiopia.

An industrial chemist by profession, Berhane came back to Addis to process a pharmaceutical investment license, to the tune of USD 22 million. He already has a plastic and rubber factory, which he established before his exile to the US.

Despite positive signs in the politics arena, Berhane argues the chambers system is still far from defending the private sector’s interests and contributing to the economy. Ashenafi Endale was granted audience. Excerpts:

The Reporter: What was at the core of your struggle for the Ethiopian private sector?

Birhane Mewa: I was forced to leave Ethiopia eighteen years ago. The government at the time was not happy with struggle in the Chamber, to create a strong private sector. I had no political interests. But after I left Ethiopia, I became a member of Kestedemena and Coalition for Unity and Democracy (Kinijit) political parties in North America. I was the secretary in Kinijit’s international leadership wing.

After Kinijit’s leadership were released from prison, I went back to normal life and started working as a business consultant, and then as a project manager. Of course I traveled to Ethiopia in between to attend my wife’s funeral. But now, I came to Ethiopia to process an investment license.

We are in the process of establishing a pharmaceutical factory in Ethiopia, in cooperation with Ethiopians engaged in the pharmacy business in the US. In general, we are here following PM Abiy Ahmed’s (PhD) call to the diaspora.

What is the kind of Chamber you want to see in Ethiopia?

The Chamber was first established as ‘the Addis Ababa Traders Association,’ during the Emperor’s era. Then it was re-established as Ethiopian Traders Council. It was free and active in advising the government, until Derg completely changed that trend. Derg made memberships mandatory and all businesses had to pay a chamber membership fees after they get their licenses.

Derg also shrunk the number of board members representing the private sector in the council, from eleven to one. At that time, nine of the eleven board members were general managers of state corporations; with only Wubshet Werkalemahu was representing the private sector.

After EPRDF took power, the general managers of state corporations left the chamber. At the time, I was president of the Ethiopian Private Manufacturing Association. So I became vice president of the Chamber to close the vacuum. And when Kebour Gena left, I became president of the chamber, through competition.

The fundamental objective of the Chamber is to advise the government before it introduces polices that affect the private sector and the economy. The second is to provide services for the private sector including trainings, information and arbitration. We were successful on both. Both the Addis and Ethiopian Chambers won various international awards, including the ‘best chamber in Africa’ award.

Nonetheless, the EPRDF was working hard to create divisions amongst, Addis Ababa, regional and sectoral chambers and associations. I worked hard to cut out such divisions and create a stronger chamber. We also managed to get back the chamber’s assets taken by the government. We also managed to access 100,000 sq. m of land for the chamber, on which the Addis-Africa exhibition center is currently being established.

Where is (should be) the exact line between state and private sector roles in the economy?

In principle, the private sector is the backbone of the economy, especially in a free market system. But during the TPLF dominated EPRDF regime; the government tried to replace the private sector by state affiliated endowment companies and state owned enterprises, which are still under party control. They enjoy access to finance, bureaucratic support, information, monopoly and other privileges. This has been stunting the growth of the private sector. I am not sure whether the situation still changed. Party affiliations still control the media, not only businesses and the economy.

Besides those parastatals, there are private businesses parasitic on preferential treatments, provided from the parties. Preferential treatment is still given for businesses, in accessing land, finance, foreign currency, and other privileges. A real private sector, which is self-created and hardworking, is very limited in Ethiopia.

The parties and government affiliated private sectors, still prevail, only changing its face. If you look at past private businesses currently, it is not hard to find a party or state support.

The right private sector should be represented only by the Chamber. It should be free, with no political interests, but defend the interests of the private sector. When we say ‘private sector’, it includes the street vendor and Gulit, to the factory and bank owners. The similarity amongst them is that they have a business license, and a common interest. There are various obstacles that hinder the chamber.

Ethiopia’s future depends on the real private sector. Foreign Direct Investments are also necessary but the domestic private sector is critical in terms of self-sufficiency, sovereignty and retention of repatriation. FDI’s can leave anytime.

Even in the USA, the private sector supports either democrats or republicans. Can a real private sector exist without any affiliation with the ruling party?

If you go to Mercato, everyone works for their own interests. They are not paid by the government but they pay taxes to the government. What the government can do is improve and equalize the playing ground.

Of course the private sector in the US supports parties. The difference is corruption is legal in the US. It is called lobbying and it is not a crime. It is also regulated. But in Ethiopia, parties establish affiliated businesses and keep taking money. The biggest problem appears when the parties themselves engage in the business. This is the biggest problem in Ethiopia. Nobody knows where the money from public enterprises goes to.

Political parties must exit from businesses and the economy. In the US, individuals and businesses giving money to parties, is publicly known, and audited. The tax authority also knows it.

Do you think the existing private sector in Ethiopia can be changed into a real private sector, or should we start over?

A real private sector is not something we create. What the government should do is create conducive environment for a ‘real private sector to emerge.’ It is the demand and supply dynamism that creates a real private sector. There are shoe shiners who have become millionaires. Did the government create them? Of course the government can facilitate support, but without political affiliation.

PM Abiy’s administration rolled out privatization and liberalization initiatives in the past three years. Do you think it is sufficient to re-balance the state dominated economy previously under the EPRDF?

There are positive signs but still some individual businesses are close to the government, instead of organized business communities under the Chamber. I do not think this is good. The government must recognize, capacitate and work with the Chamber. There are improvements regarding regulatory issues and public services. But still there is a chain of corruption in the government system. It is related to power and partisanships, which is a big obstacle that must be reduced. The government has good intentions. There are various issues studied and forwarded by the chamber and sectoral associations. Things will improve if the government reacts on those issues. If it does not start punishing corruption and avoid party affiliation and preferential treatments for selected businesses, the problem will get worse. It is the government that creates a corrupt private sector.

Corruption is also unavoidable when the public servants are paid meager salaries. The government must pay public servants sufficiently. So, corruption is high not because people are bad, or the officials are greedy, but the civil servant takes corruption as supplementary revenue.

The government also drafted a new proclamation to re-establish the Chamber. The draft proposes membership as mandatory, among others. How can a strong chamber be established? Recently, two chamber officials also defected to the US. Why is there always an internal feud inside the chambers structure?

There is a structural problem in the Chamber. It is intentionally created. Making memberships mandatory generates revenue for the chamber. But it hinders the chambers from providing quality service for their members. This was seen during the Derg regime. Immediately after the EPRDF came, it worked hard to weaken all institutions, including the chamber, teachers association, and others. The EPRDF made memberships willingly, to shrink the chamber’s revenue and finally close the chamber due to a lack of fund. But we managed to survive, by improving services and generating revenue from creative works.

Especially, the Addis Ababa Chamber became stronger, at the time, while there were some problems in the Ethiopian Chamber of Commerce. When I was about to leave, there were efforts to change the Chamber’s laws and the government wanted to re-design the Chamber, to fit to the politics.

The Chamber serves wherever there are private businesses, not government structures or political leaderships. But the government shadowed and dominated cities’ chambers, by chambers of regional states. These regional state chambers are under the control of party officials. The Ethiopian chamber also fell under the influence of party members. We tried to avoid those influences and somehow succeeded to maintain a Chamber that represents only the interest of businesses.

The proclamation tried to further divide the chamber across sectors, on top of the regional structure, dissecting the interest of the private sector. Kiosk and garage owners have different interests, but also have common interests. These specific interests should be solved under sectoral associations, and their common interest under the chamber. But what the government did is bundle the sectoral associations and the Chamber together. Businesses with different interests sat on the same table, and failed to agree. So, there is still a structural problem.

I have seen the new draft proclamation too. We are unfortunate the draft did not address the problem still. The chambers and the business community still did not reach a consensus on the draft. The Addis Ababa and Ethiopian chambers are in agreement and sectoral associations have also their won perspectives.

Chambers should work only on general issues that represent the common interests of all businesses and the economy at large, aided by sectoral associations formed separately, representing interests of businesses in specific sectors. Thus, the chamber and sectoral associations should be established separately. I do not know the status of the draft proclamation currently, but if it is ratified, it would take another generation to amend.

So, do you believe the Ethiopian chamber should be the all-encompassing strong umbrella?

Not necessarily. My point is the chamber system should be separate from sectoral associations. Whether at local, cities or a national level, chamber must be strong. But they must align. The issue of sectoral associations is completely different. For instance, leather industries have problems that can be solved both through the chamber, and their association platforms. This is the right way.

For instance, there was the Ethiopian Manufacturing Industries Association. It was challenging the government regarding manufacturer’s interests. Its strong momentum even empowered the chamber. Then the EPRDF practically dismantled it. It even prohibited the association from renting an office. The EPRDF regime never wanted such strong associations and chambers. The reason why the government overlapped chambers and sectoral associations is to deny them on common grounds.

If the draft is ratified, it only maintains the problem. Currently, the government’s system prefers individual businesses, than the organized private sector.

So the draft should be revised and discussed again?

The process of crafting the proclamation has problems from its very inception. The chamber members and business communities have no consensus on the draft. The Ethiopian, Addis Ababa, and regional chambers must sit down and discuss on the issue.

The Ethiopian government is trying to allure investments by the diaspora. If the diaspora invest and save in US banks, or in Ethiopia, which return on investment is attractive? Or do you think the government should design incentive packages for the diaspora?

Businesses in Ethiopia are more profitable than other countries. The reason the US government devised AGOA from the beginning, is because African businesses can be profitable. Even in terms of savings, the return in Ethiopia is higher than Europe or elsewhere. The problem in Ethiopia is not on returns, but convertibility. Repatriation might be difficult. Saving in Ethiopia by itself is profitable, let alone investment. There are so many profitable business sectors in Ethiopia. Many sectors are emerging, and not exploited yet.

The other problem is that the Ethiopian diaspora has lost trust in the government back home. So, the current government must reverse that perception, through transparency, commitment and service efficiency.

Thirdly, the diaspora needs information supply on feasible businesses and projects in Ethiopia. Then the diaspora can form share companies, joint ventures, PLC’s or other investment modalities. If the diaspora know feasible businesses and the laws, then they can invest. Currently, the diaspora is placing their money on the stock market and other businesses abroad. They can divert that money to go back home.

Especially, the profitability in the financial industry in Ethiopia is very lucrative; but the government should facilitate currency convertibility. Plus, most diaspora’s in Europe and the US left Ethiopia three to four decades ago. They are at s retirement age now. So if the health system in Ethiopia is improved, most diaspora’s would prefer to go back to Ethiopia.

The diaspora also wants transparent systems to complain in cases of corruption and bad services. There is corruption in Europe and the US. But it is political corruption not work corruption. Political corruption is trying to twist or influence introduction of policies, proclamations or directives. Work corruption is bribing officials, institutions, and public services. There must be a complaint window for this.

The west has been shifting away from Ethiopia and imposed sanctions. Substantial number of Ethiopians vote, especially in the US. Can Ethiopians and black Africans use their voting power to discard unfavorable officials or parties in the US or influence to reverse such sanctions?

The diplomatic system has a more crucial role in this. To be specific, the US faced unprecedented situation in Ethiopia. A government that refuses foreign pressure emerged in Ethiopia.

The US even used the UNSC to pressurize Ethiopia, meeting twelve times within six months. On top of the strong refusal of the Ethiopian government to surrender, the #nomore movement strengthened the support for Ethiopia, rallying Africans behind Ethiopia. The movement is stronger than election powers. The movement eroded US’s credibility in Africa, and in the world.

Even during calls that Addis Ababa will fall to the hands of insurgents, one million diaspora opted to come back home. I believe Ethiopia will regain its rightful place in the international stage.

Unlike any time before, the diaspora is on the same page now, regarding national issues. Before this, the diaspora’s were highly divided and turned against each other. The division created a negative energy. If the diaspora was united before, the EPRDF could have been long gone. The Diaspora and opposition figures abroad were used to strife, not unity.

Can we say that the US’s pressure is normalizing since the tension with China over the horn escalated?

Their strategy differs. The US wants to ensure its interests through political influence, while China does it through investment and economic empowering. The US’s and China’s struggles will continue, whether Ethiopia is there or not. China, Russia, Turkey, Iran and India, to some degree, are joining the friction now. They have certain interests with or against the US.

The US’s fear is not what China will do in Ethiopia, but the kind of measures Ethiopia takes. For instance, Ethiopia’s normalization with Eritrea and the alliance with Somalia is a threat for the US. When the US told Ethiopia to stop the war, Ethiopia rather turned a deaf ear. Ethiopia filled the renaissance dam, when the US opposed it. These are some of the bold moves against US interests.

These moves have nothing to do with China, but they are decisions emanating from the nature of Ethiopians. So, the confrontation between the US and China continues, while Ethiopia strides to protect and implement its national interests fully.

I do not think Ethiopia will completely shift its diplomatic ties towards China. Imperialism is always imperialism, but it changes its face. The US always wants a government that listens to them. If a government refuses to carry out their interest, they depose that government, including assassinations. In cases such as Libya, Iraq and Syria, the US’s footprints in the countries politics can be seen from afar.

The US put the same type of pressures that worked before, and in Ethiopia’s case, it has failed. But the pressure will continue. Ethiopia has passed a major obstacle. Yet, Ethiopia needs to sharpen its diplomacy more.

At what stage is your investment process currently? What are your future plans?

We are establishing the pharmaceutical factory in Ethiopia, in collaboration with highly professional pharmacists, scientists and business people in the Ethiopian diaspora. Finance, knowledge and vision are required to establish a medicine factory. If you have capital, you can buy knowledge, since it is a commodity.

Our vision is to manufacture medicine and medical equipment’s in Ethiopia and provide for Ethiopians. It is not even about profits. We wanted to improve the medicine supply shortages in Ethiopia.

We have been preparing for the past two years. We came to invest in Ethiopia, amidst the rhetoric that Addis Ababa is about to fall. Our team strongly believes in Ethiopia. Currently, we are processing the investment license.

How much is the investment?

The initial investment will take us between USD 20 million to USD 22 million.

What is your conclusion on the soundness of the Ethiopian economy, especially in post-pandemic and post-conflict endeavors?

My first impression when I came to Ethiopia after almost two decades was that all the negative narratives about Ethiopia and Addis Ababa are wrong. There is still an active economy. Across streets of Addis Ababa, day and night, residents are scrambling to buy from street vendors. This indicates to a huge demand in the economy. This is a living economy.

But it does not mean there are no problems in the economy. There is a forex shortage, industrial inputs shortages, logistics problems and others. Yet, the economy has a big potential, especially if public services are improved, corruption is eliminated and bureaucracy is improved.

Do you think the government should maintain protectionism?

The US and Europe are not afraid of protectionism. Why should Ethiopia be afraid of it? Ethiopia is eager to join the WTO. But Europe is still protecting its agriculture. The US is prohibiting import of wood, aluminum and other items, especially trump did everything to protect local industries. So, Ethiopia must also protect its industries.

After America banned Ethiopia from the AGOA, US companies left the Hawassa industrial park. If it is a local factory, they would not do so.

Before, the US’s private sector had no national interest, instead they go for profits. That is why US industries moved factories to China, in search of a cheap labor. But now, the US government is asking them to come back and create jobs in the US.

The country needs a nationalist private sector. The private sector cannot just seek profits and become a pure capitalist. It must contribute to the social wellbeing and development of the country.

Even FDI’s must be undertaken in a joint venture scheme. If it has a local element, the investment can be sustainable.

How can one balance profit seeking versus national interests? Scholars also say the psychological make-up of Ethiopians is not compatible for capitalism.

Corporate governance, labor unions and social responsibility can balance capitalism. National security should be a concern of the private sector. If there is no security, there is no transport, meaning there is no market. Drought should concern the private sector. These make the private sector become a nationalist by default.

One of the major tasks of the Chamber is to make businesses discharge their social responsibility.

Thus, your conclusion is capitalism can work in Ethiopia.

The old way of capitalism, which is seeking only profits, does not exist anymore. Of course, you are responsible for your shareholders and board members. At the same time, you have to be responsible to the society.

Why you are not investing in the banking sector rather than pharmaceuticals?

The government said it opened the banking sector for the diaspora, but still, there are unsettled problems. It said the diaspora had to invest in foreign currency. This is an obstacle.

But the major reason I joined the pharmaceutical project, is because it is a matter of professionalism. Manufacturing is difficult in Ethiopia. We have a big purpose to bring change in the medical supply shortage in Ethiopia. We will produce capsules and tablets. We will also export, once we address the domestic demand. The company will also establish an R&D wing, which will conduct studies for other firms. Most of the founders are also researchers.

Are you a chemical engineer by profession?

I studied chemistry. I also studied industrial chemistry at Bahir Dar polytechnic. I already have a factory in Ethiopia, which produces plastic and rubber. It is expanding now.

Aklilu Wubet is a veteran in the banking industry. He joined Wegagen Bank on March 2020 as the Vice President of Corporate Service, having served in different capacities in many financial companies, including the Commercial Bank of Ethiopia, in the last 25 years. He was also the deputy CEO of Nile Insurance, Bank of Abyssinia and Lion Bank, and also served as a lecturer at Addis Ababa University.

The Reporter’s Samson Berhane sat down with Aklilu to reflect on his journey at Wegagen and the challenges ahead, as the acting president attempts to bring the bank back to its usual top status it has held for the last two decades. Excerpts:

The Reporter: You have joined Wegagen during a challenging time, when it faces decline in revenue from different sources particularly due to the tense political situation in the country. How are things going since you joined the Bank?

Aklilu Wubet: Banking is always challenging, especially in a world where resources are limited. And leadership is critical during a challenging time. Leading a company during its challenging moments is a great task and makes me happy. Especially, if you have strong team, challenge is a good thing. One thing you should also understand is that Wegagen is still a very strong bank, despite the challenges it has faced.

When I decided to join the Bank, I was confident that I would overcome all the challenges by working with a strong management and team the Bank has. The conflict has impacted all commercial banks. Peace is very important for the industry than any segment of the economy since banks deal with liquid resources. The impacts of the war, in particular, were severe on us because we are among the financial institutions with large number of branches in the areas affected by conflict.

When I joined Wegagen, my priority was to help the Bank withstand the impacts of the war. That requires being prudent and to closely work with regulatory bodies, investors and other stakeholders.

In the last 25 years, Wegagen was among the most profitable financial institutions in Ethiopia. Why was it not solid enough to withstand the shock brought on by the war in Northern Ethiopia?

To begin with, the Bank has been effective in withstanding the impacts of the war. Even though the profit is low, and has declined drastically, it is still profitable. It still has a large customer base and a huge amount of assets. Thanks to the strong base, which the bank is built on; it has been successfully coping with the conflict, even though more than a third of its branches are closed.

The profitability of the Bank in the last two decades has helped it build its asset base, enabling it to withstand the impacts of the war. The rules of the central bank and its strong regulations have had its contribution in enabling us to remain strong in such a challenging period.

The strong expense management that we have applied and the strong marketing system implemented by our management team has also contributed to the success of the Bank. If it was not due to such factors, the history of the Bank would have been ruined. But thanks to our efforts, we have defied the prediction made by some, who have forecasted that we will face a loss due to the war. But we are still in a good shape.

We have devised a strategy and are also undergoing restructuring, and increasing the number of vice presidents we have. We are still among the big players in the industry, hiring elite bankers.

According to industry insiders, the bottom line in the banking industry is profits and shareholders’ return. How did you come to the conclusion that the Bank is in a good shape, while its profit dwindled from one billion birr to 193 million birr?

Business is not only about making profits. Business is about being sustainable and staying competitive in an industry. The conflicts, coupled with macroeconomic challenges, have impacted the banking industry last year and banks would have profited much higher than they did, if there was peace.

Wegagen has declared a positive profit, while much of its branches are closed, and at a period when it was not able to collect loans given to businesses operating in war-affected areas. We even held a provision in case of loan defaults. We did not use a penny from the capital invested by shareholders, despite being in the midst of series of challenges. Overall, our objective was to make Wegagen the bank of all Ethiopians, by making it solid. I believe we have been successful in doing that.

There are critics that say Wegagen is a victim of an undiversified ownership structure which exists in the banking industry. Even though Wegagen is not the only financial institution established based on affiliation or along ethnic lines, some say its recent underperformance is an outcome of lack of diversification in terms of shareholders and customer base. Do you agree?

There are those that say banks are established based on affiliation.

Is that not the reality?

I cannot be sure because I have not had a chance to look through the list of shareholders of each commercial bank. In case of Wegagen, the story is different. Wegagen is wrongly misunderstood. If you see its shareholders, no bank is as Ethiopian as Wegagen. Its shareholders are highly diversified. Many big investors from different ethnic backgrounds have a stake in Wegagen. Name any investor and they are a shareholder of our bank. If you see the board, it is highly diversified. The same is also true if you see the management.

Did you bring that change?

No. I was the vice president 13 years ago at Wegagen and it was the same back then.

Okay, but in case of customer diversification, the reality is opposite to what you have said since the Bank’s profit declined drastically, when a third of its branches closed in one region. So is it not obvious that your bank did not work on diversifying its customer base?

Not only in Tigray. We also have many branches in Gambella and Somali than any other private banks. Of course, we have many customers in Tigray but that does not mean our customers in other areas like Addis Ababa are from the same region. We have over 2.5 million customers, way higher than the adult population eligible for banking services in Tigray. That shows how diversified our customer base is.

How about loan disbursement?

It is the same. More than 75 percent our loan portfolio is in Addis Ababa. However, in terms of deposits, the northern part of Ethiopia is known for being a big source. If you go to Mekelle, many commercial banks have many branches there. Some have more than seven or eight branches and the reason is obvious. This is because there is a good saving culture there. But that does not mean we have to work on the business mix because it is important to manage risks.

Then how did your non-performing loans surge because of the conflict if your borrowers are diversified?

We have provided five billion birr in loans to our customers in Tigray. We don’t know whether it can be paid or not because of the conflict. But that is enough to increase our non-performing loans. The whole industry faced similar problems because of the same reason. We held provisions in case of defaults. If it was not due to the higher provision we held, our profit would have been over one billion birr. That would be added to our income in the future, if we recover our loans. This means that we are investing in our future and if things go smoother and peace prevails, we hope things change drastically.

How is the liquidity position of Wegagen Bank? How capitalized is the bank?

We have a strong capital base. It used to be one of the largest in the industry, though some overtook us recently. Understanding its importance, our shareholders decided to raise the Bank’s paid-up capital to six billion birr before the end of the new deadline set by the central bank. We are also thankful that we don’t have a major shareholder because that gives us room for the management to do its job.

Regarding liquidity, when the central bank raised the reserve requirement from five to 10 percent, many feared that our bank would be among those that cannot meet the new threshold. But we are among the few banks that have fulfilled the requirement first. Our liquidity is now over 17 percent. However, that does not mean we are not facing liquidity shortages, because the whole industry is experiencing similar problems due to the sluggish growth of deposits.

Shareholders want to know when the bank would reach pre-war levels in terms of profitability. When do you think that would happen?

There are two assumptions. The first assumption is that the war would stop, peace would prevail and the government puts its energy towards the economy, a scenario which would benefit the banking industry. If peace prevails, our closed branches would be opened. We will be fully operational and our deposits would surge.

The second assumption is that if the conflict continues, we will operate with our existing resources and branches that are active. New banks are joining the industry. So I am sure we can perform better even with our active branches. We have already devised a strategy to mobilize more resources. We are hopeful that we will return to pre-war levels by the next general assembly.

Founded in September 2017, Eshi Express is a pioneer and one of the successful startups in tech-based delivery businesses, in an emerging business frontier in Ethiopia. Tigabu Haile, co-founder and CEO of Eshi Express sat with Ashenafi Endale of The Reporter, to talk about his business journey.

Excerpts:

The Reporter: What was the business pitch behind Eshi?

Tigabu Haile: If you buy an avocado in Yirgalem, it is around five birr per kilogram. But in Addis Ababa, it is around35 birr. So, we believed that Ethiopia needs an efficient logistics system in the supply and logistics service. Even in Addis, we do not see companies that provide end-to-end payment systems, sourcing and delivery services.

Sending packages in Addis is expensive. There are players like DHL, the Post Office and individual motorcycle owners. But Eshi can provide the service up to 50 percent cheaper than the market.

Basically, Eshi is a logistics company. So, how do you manage your fleet? What are the types of services you provide?

We have three types of services. We have Express service, in which we deliver any package in Addis within 90 minutes. The second type is delivery in half a day. If you order in the morning, we deliver in the afternoon. We charge 90 birr anywhere in Addis. The third category is delivery in 24 hours, which costs 70 birr anywhere in Addis.

Our main operation is in Addis. We use vans, pickups, motors and other types of vehicles. Most of the Ethiopian population is in the regions. We believe the logistics problem in the supply chain can be best addressed if we expand to regional states. Currently, we have been in the piloting phase in Adama and Hawassa, since last year. We will reach other regions in the next two years.

Do you own the whole fleet of vehicles?

We deployed the hybrid model. Around ten motorcycles and a van are owned by Eshi. But owning many vehicles is not feasible, so we stopped purchasing vehicles. We launched a technology six months ago, that enables any individual vehicle owner to register to our platform and deliver packages. Our model is called ‘from foot to fleet’. People can deliver on foot. Especially when we have big events, mass publications and other large deliveries many individuals deliver on foot.

How can these individuals or private vehicle owners access your platform? Is the technology similar to a taxi hailing platform?

It is almost similar but slightly different regarding registration system and insurance policies. Huge packages might be damaged in transit by individual vehicle owners. So, we always require courier insurance or insurance for goods in transit, for any private vehicle who works with Eshi.

How many vehicles that are not owned by Eshi are working with Eshi?

Right now we have more than 25 vans, pickups and different vehicles. There are also around fifteen motorcycles.

How many packages does Eshi deliver per day? How do you evaluate the demand?

The demand of the service is huge. There are thousands of delivery demands daily in Addis, while it is in the hundreds of thousands in the regions. The hard task is to make people use Eshi just once. Then they cannot stop using it.

Right now, Eshi delivers close to 115 packages per day. In the next three years, we plan to deliver thousands of packages daily.

How do you see the competition from other players in the market?

There is no really established company we see as competitors. There are legacy players like the DHL, Ethiopian Postal service, and individuals who have motorcycles. It is difficult for many startups to emerge and become competitors in this business.

Online payment, e-tax, e-commerce, delivery and packaging are involved in the business. How are these all done as one business?

Right now online transactions can happen but there are no e-receipts. It is impossible to make online transactions now. Payment is possible for internet and mobile banking. But if you cannot provide e-receipts, you cannot have a complete e-commerce transaction. There are shops that have an online presence. They just show their packages on their sites.

Does Eshi own warehouses or source from other suppliers?

Eshi collects the packages from companies who have warehouses. Receipt is issued traditionally. So, e-commerce is a work in progress. Eshi is the instrument that provides the logistics service. We do not sell any stuff online. Shopping happens between the customer and e-commerce companies. Once the order is placed and shopping done, either the customer or the e-commerce company orders Eshi to deliver the goods.

The number of e-commerce companies has increased since the COVID-19 pandemic. Has online delivery orders increased too?

E-commerce is taking off in Ethiopia and the government is also nearing to ratify the e-transaction law. All Shops will have an online presence. The outsourcing culture in Ethiopia is immature. Most companies want to do the e-commerce and delivery businesses by themselves. One company, especially startups, cannot handle both at the same time. So, after trying both for a year or two, they fail or specialize only in one.

Currently, big global e-commerce players are coming to Ethiopia. Probably they will launch in the next six months. Eshi has entered agreements with these global players, to do the delivery part. E-commerce companies should focus on what they can do best, because they cannot do it all, with limited time, energy and resources. We want to support their job, from the delivery side.

We will have many package drop-off points soon. If the customer is not at home when the delivery arrives, the drivers can place the packages at those points and the client can take it at anytime. This way, we are planning to drop many deliveries within one kilometer radius. This reduces our cost. That is why we charge 50 percent cheaper than the market. One delivery vehicle can cover many shops, pharmacies and supermarkets within an area.

Does Eshi plan to deliver beyond Ethiopia?

Ethiopia will operationalize the Africa Free Trade Agreement (AfCFTA) soon. Intra-Africa trade will boom in the near future. Eshi plans to become a Pan-African Delivery Company within the next three years.

Lack of automated addressing is a major bottleneck to delivery businesses in Addis. How are you solving it?

Absence of digital address system is a major problem for social services, health, banking, census, elections, apart from delivery business. Address is critical. If you do not have an address, you do not exist. Due to the lengthy communication between our delivery dispatches and clients, and usually missing locations, Eshi is losing resources, time and energy. The customer experience is also bad, because it is annoying when delivery personnel call repeatedly to find the address.

Currently, we have a project in the pipeline, named Eshi Locator, with our technology partner. It gives a code to each house’s. The codes are regenerated, when our partner localize using Google technology. We will imbed Google generated codes into our technology. It will take some time. Right now we are using Google maps, to locate the customer. But this has accuracy problems. Many things should improve to solve the location issue. Eshi Locator will be the solution.

What about using GPS locations or networks, if the customer uses a smart phone?

There are four mechanisms to order on Eshi Express. Customers can order on our website, use an application in Play Store, or call on one of our call centers. For Customers who have mass orders, like event organizers, big corporate or ecommerce companies, we have a separate technology platform, which can receive bulk orders and integrate it to our fleet system.

How much is the profit?

We cannot say it is profitable, even after staying four years in the business. At least we have survived, because we could also fail. The global data shows, less than two of ten startups celebrate their fifth year of establishment. Initiating and running a startup is very difficult. Access to capital is one of the biggest problems.

Was Eshi an angel investment?

Initially, Eshi was founded by me and my partner, who has similar business ideas with me. Eshi started with 1.3 million birr. We saved up the capital. We have also advisors. Last year, the Addis Ababa Angel Investors Network invested in Eshi. Delivery business is a capital, technology and skill intensive venture. You need to hire highly talented people. You have to scale-up fast. We hope the profit will come soon, once our delivery capacity grows.

So the angel investors are shareholders now. How much did they inject in the company?

We have an agreement not to disclose the amount. They injected the capital and immediately became shareholders. We gave them equity share worth their capital injection.

So return on investments has not come to fruition yet?

It will take time, especially with startups like us, in which you have to hire huge staff. No question, we are solving one of the top five challenges in Ethiopia. Lack of efficient logistics in the system is a major reason behind the rising inflation in Ethiopia. Food is being wasted because it cannot reach the market. For instance, there is surplus in the southern part of Ethiopia, while it is extremely scarce in the northern part of the country. That is because we do not have a robust logistics system.

Eshi still needs more cash injections to scale-up its capacity. Delivery is not only about packages, it is about the stories behind the packages. For instance the national blood bank of Ethiopia is one of our customers. We deliver blood every day. We collect blood from donation centers to the national blood bank. People are living because of that. NEBE is also among our customers. We did almost all deliveries in the past national election. We are behind the success of many big achievements. We are becoming instrumental in delivery in Ethiopia.

How many institutional customers do you have?

Currently it is close to 35. For instance, we deliver laboratory results for hospitals, on a daily basis. Embassies, hotels, optical shops, are some of them.

What are the incentives provided by the government for delivery companies, such as allowing duty free import of vehicles?

The government is not providing any support or incentive for delivery companies. There were no private courier service providers in Ethiopia, for long. So, only the Post Office and the DHL were known in this business.

For instance, driving motorcycles has been banned under the State of Emergency since some individuals might use motorcycles for crime. But Eshi had hired many staff, branded the motorcycles and there is no way motorcycles registered under delivery companies can be used for crimes. After all, we are delivering critical packages like blood and other essential services.

Secondly, there is an extreme lack of clarity among government institutions, regarding delivery businesses. Especially, the tax authorities are creating major obstacles to delivery companies. The government has no clear policy on delivery businesses, let alone support incentives. The delivery sector could not grow in Ethiopia, because the government has failed to understand it as a newly emerging sector.

There is the Ethiopian Couriers Association, to which Eshi Express is the board president. The association is trying to change the grim fate of the sector. We have submitted a letter to the government, asking the ban on motorcycles of delivery companies to be lifted. But the response from the government is slow.

Motor cycles cannot move after 6PM. So, we are forced to stop taking orders after 4PM. Otherwise, we cannot deliver last minute orders until the next day. This is especially affecting food delivery courier companies, because there orders are largely during dinner times.

What is the government’s response to the associations’ letter?

It has been three weeks since the association submitted the letter. But the government says it is still being considered. The letter was submitted to the Addis Ababa traffic management office. The city transport bureau has also failed to respond.

A new logistics regulation allows up to 49/51 partnership with foreign logistics companies. Is Eshi considering a joint venture with foreign companies?

JV is allowed for logistics companies engaged in sea, air and land transport. Ours is light package and fast delivery logistics. So JV is not allowed for us.

How much does the absence of e-receipts affect your business? How does Eshi cover the costs, if delivery is defaulted?

Online ordering, online payment, and e-receipts are not active at a national level in Ethiopia. Ethiopians consider online shopping, or e-commerce, as a luxury service reserved only for developed countries. That is acutely wrong. Delivery services extremely benefit developing countries. The purpose of e-commerce is to cut expenses and reduce prices. Companies do not have to open shops everywhere. So, it cuts out rental costs. End user customers also usually visit as many shops, to find a reasonably priced good. With e-commerce, you can find any items at your fingertip. You can order a delivery company, saving your time, energy and money.

The progress slows in Ethiopia, because the digitization pace is slow. But the Parliament is currently working on the e-transaction proclamation. The draft document has been under review for a year now. The Ministry of Science and Technology crafted the document and the Council of Ministers has passed it on to the Parliament. It was said that it would be ratified before the current Ethiopian year enters. But I think it is delayed because the government is busy due to the war.

But even after the proclamation is ratified, is there the technology that interfaces with the payment facilitator, end user, delivery companies, shops, tax authority and other regulators?

Eshi has end-to-end technology that enables the ordering and tracking of goods. The technology also enables us to publish the transactions in excel or PDF file formats.

E-commerce companies also have a similar technology. Ethiopia has all the basic ingredients to kick start e-commerce. We have the laws, graduates, and emerging e-commerce companies. The service quality will improve gradually.

Does Eshi use other payment mechanism like mobile money, tele birr and others, apart from e-commerce companies?

So far, our transaction is largely cash-based. But we are integrating with Fintechs like tele birr, CBE birr and others.

The starting price for delivery of a kilogram of package is 20 birr. It increases by12 birr per additional kilometer and three birr per additional kilogram.

How do you evaluate the competition with other emerging delivery companies?

It is difficult to say there is stiff competition. There are delivery companies that participate in bids with us. A lot of institutions like banks float bids for their bulk delivery contracts. There are only close to six active players.

The DHL, the Ethiopian Postal Service and Balderasu are active in Addis, while there are other startups emerging in regional delivery services. The DHL has no interest in the domestic delivery business in Ethiopia, leaving the market in Addis for us. Even in Europe, DHL works with local companies, specializing on the international market rather.

Close to 100,000 packages are delivered in Addis Ababa every day. Eshi, which delivers 115 packages per day, is comparatively better performing, than other players. Yet, the share of delivery companies is completely insignificant, relative to the demand.

All of close to six delivery companies in Ethiopia, including DHL and the Post office, are delivering less than 6,000 packages per day. The market is untapped.

The delivery demand in regional states is much higher than Addis. We have assessed the demand and mapped delivery services in 100 cities in Ethiopia. There is close to 200,000 package delivery demands in these cities.

Who is filling this demand now?

This demand is bridged traditionally. The Postal Service has some market share, but mostly; people send packages via cross-country buses. But this method of delivery has two major problems. First, it has no insurance if the package is damaged and second, the bus owners charge as they wish. Cross-country busses have no standard pricing for delivering packages.

Eshi is 100percent insured. When a client orders Eshi to deliver a package, the customer declares the value of the package. If it is damaged, Eshi refunds 100percent of the value stated.

Do you work with all insurance companies?

The local insurance industry is underdeveloped, thus, local insurance companies usually do not accommodate our insurance packages. So, we cover the insurance fund by ourselves. Eshi has been incurring cost due tothis. But now, we are communicating with insurance companies. All other delivery companies operating in Ethiopia do not have such insurance coverage, except for Eshi.

Is Eshi using its own vehicles for the piloting phase in Adama and Hawassa?

We deploy our own vehicles to deliver high risk packages. But usually, we use private vehicles which have insurance coverage.

Which sectors have high demand for delivery services, is it exporters, households, or wholesalers? And Ethiopia is ranked low on the logistics index. How can delivery companies improve this?

Our business is last mile delivery. We deliver from shops to end users, or consumers. Last mile delivery is the most difficult business in a given economy. One is due to a lack of precise addressing technology. It is also the most expensive logistics system. So the demand could be consumer goods, medication, and invitation or gift cards.

Last mile delivery also creates job opportunities. Millions of youth can deliver goods door to door. So, it is the best logistics sector for job creation. If we could make the delivery price cheaper, it can activate the economy, and affect millions of lives positively. It is a phenomenal sector.

By how much rate is Eshi growing from a startup to a large enterprise?

Our package delivery business size is growing at close to 10percentper month. It is not an impressive growth but we are making good progress.

We plan to grow by 15 percent on a monthly basis. Comparatively, Eshi is growing faster, because most of the delivery companies operating in regional states are highly affected by the conflict in Ethiopia.

How much does Eshi deliver in Adma and Hawassa?

Our delivery in these towns is just a couple of packages per day, for now.

But Blood Bank, the NEBE, Goh Betoch, Nile Insurance, Ramada hotel, hello market, and Ethswitch are some of our major institutional clients across the country. We do cash-up-on-delivery for our customers. We also provide full insurance coverage, which no delivery company does in Ethiopia. We also have warehouse for e-commerce companies.

Does Eshi directly buy goods and deliver?

Usually customers order e-commerce companies to supply the good. Then the e-commerce company orders us to deliver the packages to the customer who has placed the order. Hence,Eshi does not purchase the packages. The package is purchased by the e-commerce company. Since the customer cannot pay online, we collect the payments and give it to the companies, usually on a weekly basis.

If we directly engage in buying and delivering, it will take a huge capital. The e-commerce companies have the packages and the digital presence. I believe e-commerce should be much cheaper. Some e-commerce service providers give up to 15 percent discount, but the business is just taking up in Ethiopia. It is at very early stage.

Eshi does not want to play the role of e-commerce companies. If there are 40 e-commerce companies in Ethiopia, we do not want to become their competitors. Rather, we want to deliver their packages. But if there are packages not found in e-commerce warehouses and if Eshi can find those goods, we can supply it directly to the customer. Under this circumstance, we receive orders of packages worth less than 2,000 birr.

English Version News

Suzuki vehicle prices explode, shaking up the automobile industry

Yoseph Asfaw, a mid-level manager of one of the branches of Bunna Bank, was excited when he learnt he was eligible to take out a two million birr interest-free loan, courtesy of the performance his branch achieved last fiscal year. He did not hesitate to take the opportunity. After a few weeks of deliberation about what to buy with the money, he decided to purchase a vehicle. His choice was the 2022 model of the Suzuki Dzire, the most sought-after automobile in the car market. He was asked to pay 1.5 million birr.

“Are you sure I will recoup the money within a short period of time,” Yoseph asked the car retailer.

“Trust me, give it one month, and the price will surpass two million birr,” the retailer replied.

The trader was right. The price of Dzire 2022 has shot up to 2.2 million now, a development that helped Yoseph net a profit of 700,000 br in just a month. “You cannot get this money by saving or opening a trade store. And not surprising at all, given the volatility of the market,” said the banker, adding, “I don’t want to sell it as this is a treasure whose value appreciates every second, and the most profitable venture without adding value.”

It is not unusual to see the price of vehicles spike in Ethiopia. Cars are believed to be a big treasure, the same way apartments or houses are. A car costing less than USD 2,000 in neighbouring countries, the Toyota Vitz, costs nine times more in Ethiopia. The high tax on old cars, which could reach 500 percent, was used to justify the hike. Though the same is true for old cars now, the story is different in the case of new vehicles, a category given to automobiles produced within three years of imports.

Three years ago, the government introduced a new tax law to encourage the imports of new cars while discouraging the old ones. Such a reform was meant to make new cars cheaper, though it was a target that never materialized. A case in point is the Dzire 2022, an automobile imported through a duty-free scheme and flooded the market, along with other brands of Suzuki, including Espresso and Swift.

Toyota is still the dominant player in the vehicle market, though traders say Suzuki is now commanding the lion’s share, probably as high as 60 percent in the last two years. It is partly because the cost of new Toyota vehicles is higher than in the past, as older ones were less costly. For the same reason, Suzuki is the most preferred brand for importers now because the lower the cost, the lower the amount of foreign exchange importers needs to get.

“We get the forex from the parallel market with a premium, as banks barely cover the cost of the imported cars. Suzuki has become a preferred option for many importers as it is less costly and brings a better return with a higher profit margin than Toyota, which is expensive and requires a tiresome process to get the forex needed to import it from countries like Dubai,” said an importer.

Last year saw a spike in demand for new vehicles, largely due to the huge amount of finance availed by banks to borrowers eligible to take a loan to buy automobile. During the third quarter of the last fiscal year, 330 million birr was imported, twice what was imported in the preceding quarter. It is also 20 percent higher than what was imported during the same period in 2020/21. The increase is the outcome of the growing demand in the market, according to retailers. But that comes with a cost.

“The demand is way higher than the supply. We are receiving orders more than what is available in our stock,” said Ezra Hailemariam, marketing manager of Tamrin, one of the major market players in the car market and known for importing Suzuki brands.

The change in the global market has also contributed to the spike in price, according to Ezra.

“Over 90 percent of Suzuki cars are imported from India, which is not producing much now due to a shortage of inputs because of the tension between China and Taiwan, which is the major supplier of semiconductors for the factory in India,” Ezra added.

According to a senior company official, Maruti Suzuki said “it could not produce 51,000 units in the April-June quarter owing to the ongoing chip shortage situation.”

India’s largest carmaker, which sold 1.4 million vehicles this year, underscored that the semiconductor shortage is a challenge in planning its production activities.

“The electronics component shortages are still limiting our production volumes. In this quarter (Q1), the company could not produce 51,000 vehicles,” said Maruti Suzuki India (MSI) CFO Ajay Seth in an interview with a local media in India.

The scope of the fighting between government forces and militants of the Tigray People’s Liberation Front (TPLF) along the border of the Tigray region has widened with both sides acknowledging that the conflict has spread to more areas in addition to the area where it initially erupted. The fighting between government and TPLF forces resumed on August 24 after a five-month lull. Though combat had been heaviest around the southeastern border of Tigray, TPLF militants have pushed into the neighboring Amhara and Afar regions, sending residents fleeing. Clashes on the ground and air raids over Tigray have poured cold water on the efforts underway since June to find a peaceful solution to the 21-month war that began following an attack on federal army camps based in the region. The warring sides have accused each other of firing first and shattering the months-long relative calm that has been prevailing in the northern part of Ethiopia following the federal government’s announcement in March of a truce to allow humanitarian aid to be delivered to Tigray.

The federal government has also blamed what it calls the west and Ethiopia’s “historical enemies” for using the TPLF as a Trojan horse to advance their evil design on the nation. Ever since the administration of Prime Minister Abiy Ahmed (PhD) commenced a military operation in Tigray in November 2020 in response to attacks on the Northern Command of the Ethiopian National Defence Forces (ENDF) the country has been subjected to unprecedented pressure at the hands of Western governments, the U.N., mainstream media, think-tanks and rights groups. The U.S. particularly has sided with the TPLF, slapping a slew of sanctions on Ethiopia and withdrawing its benefits under the United States’ tariff-free African Growth and Opportunity Act (AGOA) while it gave the TPLF a slap on the wrist. Furthermore, the U.S. and its allies at the U.N. Security Council have tried over a dozen times to formally admonish Ethiopia but failed thanks to the vote of China, Russia and India. Apart from exerting undue diplomatic pressure, the West has also been waging an information warfare against Ethiopia through a disinformation campaign undertaken by the mainstream media, think tanks and so-called rights advocacy organizations. Its end-game, as some analysts plausibly argue, is to engineer a regime change or if that does not work to coerce Prime Minister Abiy’s administration into accepting to the demands of the TPLF.

It’s not only over the Tigray conflict that the West is pressurizing Ethiopia though. The filling and operation of the Grand Ethiopian Renaissance Dam (GERD) has been a bone of contention between Ethiopia, whose highlands supply more than 85 percent of the water that flows into the Nile River, and the lower riparian states of Sudan and Egypt. In 2020 the U.S. tried to force Ethiopia into signing a binding agreement on the filling period. The Ethiopian government declined to sign-off a U.S.-drafted agreement regulating the filling time of the dam, which Egypt insisted should be completed over 12-21 years, saying it has the right to fill the dam at its own pace and would do so in no more than seven years. Although Sudan initially supported the building of the dam, since then it has taken Egypt’s side on the ground that filling the dam without the agreement of downstream countries imperiled its national security. Again the Security Court, at the behest of Egypt and Sudan, convened on several occasions to consider a resolution calling on Ethiopia to cease filling the GERD’s reservoir and pushing for a binding agreement between the three sides on the operation of the dam but failed to adopt it.

The West’s motives driving its pressure campaign on Ethiopia, its long-standing regional ally, are purely self-centered and zero-sum. It is wary of Ethiopia’s pursuit of an independent foreign policy, which may very well frustrate the accomplishment of its strategic goal in the Middle East and Africa. First, Ethiopia’s apparent reluctance to do toe the West’s line has been perceived to make it harder to protect the interests of Egypt—the cornerstone of its Middle East policy. Second, its attempt to thread a needle as animosities between the West and China ramp up is not appreciated by the West, which feels threatened by Beijing’s growing clout on the global stage. Given Ethiopia has been a beacon of black Africans’ struggle for freedom and could inspire continental resistance to neo-colonialism, the West might deem that forcing Ethiopia to forsake China is instrumental in containing the influence of its top geopolitical rival in Africa.

The West better realize that the essentially undemocratic and unipolar global world order that had prevailed over the last several decades following the end of the Cold War is ebbing. As a country that has never been colonized and is home to a fiercely patriotic people, Ethiopia will never cave in to the West’s demands. Needless to say this requires on the part of the federal government to develop and implement a robust diplomatic policy aimed at nullifying the threat posed by its historical enemies through a variety of tried and tested mechanisms. Some of the steps it can take in this regard include forging a compromise with its adversaries where possible and failing that to foil their destabilizing policies and measures. Ethiopia has the capacity to find a resolution to the political crisis engulfing it. Any nation or organization which has its interest at heart should stop meddling in its domestic affairs and instead support it in seeking enduring solutions.

The abrupt eruption of fighting between government forces and militants of the Tigray People’s Liberation Front (TPLF) along the border of the Tigray region this Wednesday has left Ethiopians apprehensive and disheartened. The resumption of active hostilities shatters the months-long relative calm that has been prevailing in the northern part of Ethiopia following the federal government’s announcement in March of a truce to allow humanitarian aid to be delivered to Tigray. Predictably the warring sides have blamed each other of provoking the hostilities. The Ethiopian government has accused the TPLF of striking first, saying it had “destroyed the truce”. In a statement it issued on the same day the Government Communications Service said, “Disregarding the numerous peace options presented by the Ethiopian government, the armed wing of the terror group TPLF, pushing with its recent provocations, today committed an attack” around southern Tigray. The TPLF though has said government forces and their allies had launched a “large scale” offensive towards southern Tigray early Wednesday after a months-long lull in fighting, adding its forces were defending their positions in the southern front.

The lead up to the current round of conflict portended the escalation of the now 21-month civil war. War drums were repeatedly being beaten with all the sides in the conflict issuing statements pointing to the outbreak of an impending war. The TPLF said on several occasions that the peaceful path to resolve the situation was not working and that it was considering “other options.” The government of Ethiopia on its part accused the TPLF of engaging in extensive military mobilization in preparation to restart the war and called on the international community to condemn the terrorist-designated organization and dissuade it from its ill-fated move. The government of neighboring Eritrea, whose troops have been operating in Tigray since the war began, also pointed the finger at TPLF for plotting to launch attacks on the country to reclaim lost territory.

Since November 2020, the bloody war has exacted a heavy humanitarian toll and ravaged the nation’s economy. In addition to the tens of thousands killed and injured, millions more were displaced, psychologically traumatized and left needing emergency food assistance. Social and economic infrastructure has been totally or partially damaged, including schools, universities, health institutions, and other facilities in the Tigray, Amhara and Afar regions. The economy has taken and continues to take a battering. Its growth, which stood at around 10 percent annually before the conflict, has contracted by half; scores of industries have been damaged while some investors have suspended or totally quit operations, resulting in a surge in unemployment; the undoubtedly huge sums of foreign exchange the war has eaten up has contributed to its dearth at levels rarely seen before and to driving inflation higher. Although it’s difficult to quantify the true cost of the war, the destruction is sure to have cost Ethiopia billions of dollars.

The renewed conflict comes as efforts underway since June following the establishment of a government-appointed committee tasked with starting peace talks hit a snag. The government’s announcement in late July that it was ready to hold talks with the TPLF “anytime, anywhere” and the TPLF’s expression of its willingness to ending the war through peaceful means raised the prospects of peace. The apparent readiness of the two parties to engage in peace talks was hailed as an important initiative locally and by the international community. However, both sides have laid down preconditions that they say must be met prior to the commencement of talks—the declaration of a formal cessation of hostilities in the case of the Ethiopian government and the resumption of basic services to Tigray by the TPLF. They also disagree on who should lead negotiations, with the government demanding that the African Union oversee the process but the rebels insisting that outgoing Kenyan President Uhuru Kenyatta should chair it. While we are not apportioning blame here it’s disappointing to say the least that war has broken out again due to the inability of political leaders to do whatever is necessary to prevent it.

War is generally regarded as something that cannot guarantee a win-win solution to political conflicts. This said some contend that war is not necessarily the worst option as long as it fulfills certain considerations that lend it moral acceptance. Critics, however, argue that all war is essentially indefensible regardless of how justifiable the cause behind it may be. They also attempts to justify a particular type of war as being just serve to rationalize violence instead of constraining it. Philosophical differences aside, many agree war is a failure of imagination. Ethiopians have had enough of the internecine conflicts that they have endured for centuries. The blame squarely lies with political leaders and elites bereft of the desire to settle differences through constructive dialogues. In any kind of armed conflicts it is innocent civilians who bear the brunt, not their architects. That’s why the Ethiopian government and the TPLF need to immediately stop fighting and thrash out a durable peace accord at the negotiating table. Let’s not go back to square one!

Hopes of a negotiated political settlement to the war that erupted in northern Ethiopia in November 2020 following the attack on the Northern Command of the Ethiopian National Defence Forces based in the Tigray region by the forces of the Tigray People’s Liberation Front (TPLF) have been high ever since the Ethiopian government established in June a committee tasked with holding peace talks. The government’s announcement in late July that it was ready to hold peace talks with the TPLF “anytime, anywhere” and the TPLF’s expression of its willingness to ending the war through peaceful means, albeit the fulfillment of certain preconditions, led many to believe that peace was finally within Ethiopians’ grasp. The apparent readiness of the two parties to engage in peace talks was hailed as an important initiative in bringing a conflict that has exacted a terrible toll on the country and its people to an end.

Efforts to start the peace talks seem to have hit a snag lately though. First, this week the Main Peace Committee—the committee the Ethiopian government established to explore the possibility of talks with the TPLF—declared while announcing it had drawn a “peace proposal” that the resumption of basic services to the war-stricken region was contingent up on the creation of an enabling environment once a formal ceasefire is concluded. Meanwhile, the TPLF immediately dismissed the committee’s statement as “obfuscation”, blaming the Ethiopian government for openly defying “their oft-repeated promise to take measures aimed at creating conducive environment for peaceful negotiations”. It further accused it of “taking provocative actions against [Tigrayan] forces” and warned that “it will be solely responsible for the eruption of a second round of war that will lead to the total destruction of the country”.

The condition laid down by the Main Peace Committee in a statement it issued, namely that the declaration of a formal cessation of hostilities is a prerequisite to resume the provision to Tigray of, among others, electricity and telephone services belies the Ethiopian government’s recent unambiguous assertion that it was committed to hold negotiations without any precondition and as such represents a step backwards. While the committee has legitimate security concerns regarding the safety of federal government employees that need to be deployed to Tigray in order to restart the basic services, it should also be mindful of the fact that the continued disruption of the services only serves to exacerbate the plight of ordinary Tigrayans, not the leadership of the TPLF. It needs to demonstrate in deeds its avowed commitment to alleviate the suffering of citizens in the conflict-affected parts of the Tigray, Afar, and Amhara regional states. On its part the TPLF must stop beating the drums of war in the realization that throwing around belligerent statements is counterproductive to peace-building endeavors and just prolongs the ordeals of the very people it claims to stand for.

A host of hurdles stand in the way of the proposed talks. TPLF forces still occupy parts of the Amhara and Afar regions they invaded. Similarly, the Amhara region has ruled out negotiating over the fate of areas its forces wrested from Tigray soon after the war erupted, arguing they were forcefully incorporated under the Tigray region in 1991. The continued presence of the Eritrean troops in some of the territories they occupied in Tigray poses a challenge that complicates negotiations. Moreover, disagreements over who leads the mediation process—the African Union (AU) as the Ethiopian government insists or Kenyan President Uhuru Kenyatta, the preferred choice of the TPLF—can torpedo the entire process.

Trying to bring about a complete end to the fighting in northern Ethiopia followed by a political settlement which leads to a lasting peace is an arduous task to say the least. Nevertheless, no price is too high to pay for peace. Now is the time for the warring parties to show a genuine determination and commitment to peace. The deep-seated antagonism between the two sides understandably makes it difficult to strike a peace deal. Engaging in dialogue and making the necessary compromise requires more courage than continuing the war. Embarking on a peace process should not be about total victory for one party and a defeat for the other. It is about achieving an outcome in which all the protagonists and more importantly the people of Ethiopia emerge victorious. For the sake of Ethiopia and its people the Ethiopian government and TPLF must recommit themselves to peace.

The rule of law is a mechanism, process, institution, practice, or norm which strives to ensure that no one is above the law, everyone is treated equally under the law and held accountable to the same laws, there are clear and fair processes for enforcing laws and human rights are guaranteed for all. Ethiopia has the sad distinction of being a nation with a checkered track record when it comes to upholding the rule of law. Among the different metrics by which a country’s overall rule of law performance may be measured, Ethiopia has particularly fared badly in assuring order and security as well as respect for fundamental rights. The act of turning back some people travelling from the Amhara region en route to the capital Addis Ababa constitutes a clear example of the latter.

For over three weeks now security forces in the Oromia region have been preventing citizens travelling by cross-country bus from the North and South Wollo zones of the Amhara region to the capital through Oromia from getting to their destination if they do not carry a residence ID of Addis Ababa. Federal government officials claim operatives deployed by the terrorist Tigray People’s Liberation Front (TPLF) were recently arrested while trying to infiltrate Addis Ababa using residence IDs and administrative seals it had looted when it occupied some parts of the Amhara region, adding the measure is part of a security operation aimed at thwarting the evil designs of the terrorist group. True, a government’s primary responsibility is to protect the safety and security of citizens. Nevertheless, care must be taken to ensure that the manner in which any operation to ensure law and order does not trample basic liberties enshrined in the constitution.

One such right is freedom of movement. Article 32 of the constitution stipulates that any Ethiopian or foreign national lawfully in Ethiopia has, within the national territory, the right to liberty of movement and freedom to choose his residence, as well as the freedom to leave the country at any time he wishes to. The Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights, and the African Charter on Human and Peoples’ Rights — the international instruments Ethiopia has ratified and in conformance with which the fundamental rights and freedoms specified in the constitution must be interpreted — also afford protection to this right. Absent a duly declared state of emergency, there can be no justification for the indefensible prevention of Ethiopian citizens from enjoying their freedom of movement on the ground that they pose a potential security threat.

Aside from flouting the rights to liberty of movement, the action of the Oromia security forces has other troubling ramifications. First, it creates a perception of discrimination and ostracization in the individuals victimized by the travel restriction. Moreover, the fact that they are unable to travel to their intended destination entails damaging economic and social consequences for them. This is liable to sow the seeds of resentment and down the line to political conflict. Second, it encroaches on the federal government’s constitutionally granted power to regulate major roads linking two or more regional states. Such intrusion into the federal government’s exclusive preserve sets a bad precedent for other regions. In short it spells danger for the integrity of the constitutional order and the rule of law.

Freedom of movement is a fundamental right all levels of government must respect. Any perceived security threat its exercise may pose should be handled in a manner that does not result in the violation of the right and subjects innocent citizens to inconvenience. There can be no sugarcoating the fact that the act of preventing certain classes of people from travelling to wherever they want is an unequivocal infringement of not only freedom of movement, but also the right to equality. As such it is incumbent on the federal, Oromia and Amhara regional governments need to hold consultations on ensuring that everyone travelling from the Amhara region via Anwar Soussa has been the Managing Director (MD) of Safaricom Ethiopia since July 2021. He was the Managing Director of Vodacom DRC and the Chairperson of Vodacash (M-PESA), a position he has held since 2017 until joining Safaricom Ethioia. During his tenure, Vodacom DRC made major strides in operational performance, crossing the USD half a million in service revenue mark for the first time in 2020. The Reporter’s Samson Berhane sat down with him to understand his new beginnings in Ethiopia.

The Reporter: First, tell us about your journey in the telecom sector.

Anwar: I have been in the telecom sector since 2006. But I started in the technology sector since 1996 in Montreal, Canada. I joined Safaricom Ethiopia, the project, when I was in Vodacom in Congo. I was a CEO there. My experience perfectly suited for this type of operation.

Safaricom has been preparing for more than a year to launch service. Why did it take so long? What were the problems that you have faced while doing so?

I don’t call it a problem. I call it a challenge. Initially, when we come into the market, the idea was to launch using ethio telecom infrastructure. That agreement took longer than expected to finalize. As a result, we choose to build our own towers. We did not want to wait. To build towers, you have to find land, import materials like steel and find cement as well as hire sub-contractors. That means you need more time than the initial plan. That is the real reason why it took longer than expected to launch service. Now, we signed a deal with ethio telecom and things are gonna move faster.

Tell us about the detail of the deal. I heard you are going to pay in both local currency and USD to lease the infrastructure of ethio telecom.

I am going to keep the deal private because that is between us and ethio telecom. But there is a dollar component. The reason is, as well all know, there is a forex shortage in the market and to prepare a site for us, they are required to import materials from abroad. We recognize that. We agreed to make the component in dollar for them to make the site ready for us.

So, the negotiation is now over?

Ethio telecom has been a very good partner. The CEO, Frehiwot, has been gracious in terms of engagement with us. Everything is proceeding well. The delay was due to operational issues. How many juniors were available? How fast we can get steel? How fast we can upgrade the site? All of these are operational issues.

When you launch service in Dire Dawa, you have used your own infrastructure.

That’s correct. When we launch service, initially, we are using our own infrastructure. But as we move forward, we will be sharing infrastructure of ethio telecom and build our own in the meantime.

Is there any change in equity contribution of shareholders in Safaricom Ethiopia? Some say, there is. Is that true?

No, there is change.

As Safaricom is listed in the stock market, a change is expected when something new happens. Have you seen any change recently after you launched service?

I don’t think it is possible for you to attribute any change to a certain element. The reality is the World’s stock market has been very volatile over the past six months. There is a war and a global recession coming in. Certain things happening are way beyond the control of a certain company or what we do here in the ground.

What should Ethiopians expect from Safaricom? Many hope Safaricom will come up with a better quality of service with a lower fare.

The pricing move from ethio telecom last year was very strong. They brought down massively. I am not sure if it will be possible to bring down price from what is in the market now. However, in terms of quality, my expectation is that the quality overall in the market will improve. And the reason I say that is because we are setting up a new network and ethio telecom, or the competition, will not stay still, I expect they will bring the best game in the table. Quality of service, both in technological level and in customers’ service, will be improved massively. How customers’ complaints are going to be taken care of? I think these are areas where you see a major improvement.

The price that you are charging is almost similar with ethio telecom. Do you think you can be competitive in the market, while charging the same price, as people expect a lower fare from you?

The price for voice is one of the most aggressive in Africa. And I don’t think there is a room to drop voice prices. So do I think we can be competitive? Yes, I do. The most important thing we want to flag is that we don’t want a price war with ethio telecom. If we start a price war, that means they will automatically react. There is no way there is going to sit by and see us dominate the market because our price is cheaper. I think that will a detrimental impact on the market, not only on us. I don’t think you see a change in terms of price.

The infrastructure deal took more time than you anticipated. The global market is not helping too. Did you make any change in your financial targets, considering the challenges you have faced since you secured the license to operate in Ethiopia? For instance, do you still think it is possible to achieve breakeven within five years, as outlined in your initial plan?

Yes, I do think so. I think the biggest challenge is the global inflation. The price of fuel is increasing. The same is true for cement and steel. All these things are going to be more expensive. I think this element of the business will be very challenging. Yet the plan is still to breakeven within four or five years. But we have to pay attention to the cost.

You are investing heavily in infrastructure development. And can you tell us how far you have gone thus far?

We will continue to invest with the money that we allotted when we started the business. Some places are easier. Addis is easier than the regions. This is because there are a lot of buildings to put on the antennas. So it is simple to deploy in Addis than other areas.

If it is easy, why did you first launch service in Dire Dawa?

That is a small town. It requires fewer sites. It is easy to optimize. The network rollout was very fast.

How long it would take to launch service in Addis?

Six weeks. We believe there is a massive opportunity in the capital, in every element. I have been working in 12 countries. I never had been in a country where a single company dominates everything. The market will be split.

Is there any place that you want to capitalize on, especially an area where ethio telecom has a little presence?

That is a nature of businesses. You grow until there is no place to grow.

How long it would take for you to be independent from ethio telecom?

I don’t think we want to be independent. The reason I say that is because old days where everyone builds its own infrastructure are gone. You have to share infrastructure. That makes more sense because that does not have any impact on your competitiveness. Why do you build a fiber where there is a fiber? That will be a waste of money.

There has been a social media outcry against your recruitment process. What is your reflection on this?

To be honest, I think it was not only on the recruitment process but also on the language we are using. It was also about distributors and how we are allocating distributors across regions. It was also about the religious mix of what we have in the office and what we have employed everywhere. There were a bunch of requests the activists raised with us. So, we did not respond immediately because we were supposed to understand whether these are true or not and see ourselves if there are problems. To be honest, I don’t think the problems are as acute as people are saying. What they did say is to be careful. For instance, if we go to Oromia, we have to use Afan Oromo. We have to pay attention to laws. We have put signs saying coming soon. It was us not being sensitive. We met guys behind the campaign. They were very moderate. None of them want to hurt Safaricom. They want what we do to be fair. They did not make extraordinary demands. That’s why we are comfortable to engage with them. I understand we have to be sensitive to the history, the culture and the current politics without going too far. It has to merit-based. Everybody coming to the company should be the best of the best. We have received a lot of advises from the government. All of them said “you must choose the best but be careful.”

Do you think it is possible for Safaricom to apply meritocracy in light of the current situation in Ethiopia?

I think there has to be a meritocracy. The qualification of the candidates has to be there. There should be no compromise. However, as we choose candidates, the priority must be given to the people within the region. It is not appropriate to start shifting from one region to another. Not because of other issues but language considerations are critical. People have to speak the language of the area where they are working.

Now let us talk about mobile money. I know you are in the process of launching M-Pesa here. Do you see any progress from regulatory body in introducing a legal framework to govern the sector?

The legal element is going fine. I think it is gonna be available very soon. Our shareholders are engaging with the government. From operational perspective, things are going well. We have put the app in place. We have put configurations in place. Everything is in a good shape. In technically perspective, we will be ready to launch service in the next three months.

The approval process of the bill may take another three months. Do you think that will have an impact on your plan?

No. We got so much to do. We have 25 cities to cover. We have massive network to build.

Do you think you can repeat the success of M-Pesa in Kenya here in Ethiopia?

Absolutely. Kenya is particularly amazing story. Wherever we launched M-Pesa, we were successful and we are leading the market. So we don’t see any way it is not going to be successful in Ethiopia.

Ethio telecom is already advancing in the mobile banking market. Are you expecting fierce competition when you launch M-Pesa?

I do expect very strong competition. They have done a great job in recruiting customers and strengthening the network.

From what I have observed, ethio telecom is taking an advantage of its link with public offices to facilitate payments in the public sector? Have you get any promise from government officials whether you will get the same opportunity when you launch M-Pesa?

We are talking them to now. There is no one said we are not going to get this opportunity. Yes, they had a one year head start. They have done great job in services they have launched. Yet I believe we can catch up.

How is the war in North Ethiopia affecting you?

We have a huge amount of work to do. I think it will slow us down in certain areas but we will continue doing our work in other areas. But everyone is sad to see the resumption of conflicts.

Are things in place to launch service in North Ethiopia, particularly in Tigray, if the war ends?

We will be ready as soon as communications are stored and get the blessings to go back in. We want to reach all over Ethiopia.

My last question is on repatriation. Many international companies usually complain about the difficulty of repatriating profit in Ethiopia. Some say it takes over a decade. How is your plan in that regard?

Repatriation is not a big issue. The issue is finding dollar to buy equipment after the investment window closes. After our money runs out, we need to get forex to buy equipment. Regarding repatriation, we knew the issues when we came. If it takes 10 years, it takes 10 years. We gonna be here longer than that. Of course, we want to repatriate but we are here for long term.

Oromia without fear that they will be turned back before getting to their journey’s end. Given upholding the fundamental rights laid out in the constitution is vital to assuring the very survival of Ethiopia as a cohesive polity, overstepping the constitution in the name of containing elements bent on wreaking havoc cannot and should not be tolerated. That is why it’s imperative to put an immediate stop to the blatantly unconstitutional violation of freedom of movement and see to it that it’s not repeated ever again. Goitom Tsegaye is deputy chairperson of Arena Tigray, an opposition party popular in Tigray. He has been voicing his concern over the war in Tigray since it broke out almost one and half years ago. The second time the conflict started, Goitom found it heartbreaking. He thinks that in carrying out the eagerly anticipated negotiations between the two warring groups, the African Union did not fully fulfill its obligations to the organization. The Reporter’s Selamawit Mengesha sat down with the opposition leader to get more of his perspective on the recent resumption of hostilities.

The Reporter: Let’s start with the war that erupted anew this week. Before the battle resurfaced, there were talks of a peace agreement. Is there still hope for negotiations?

Goitom: It is heartbreaking that the dispute has resurfaced this week. Since it began, there is a potential that it will continue, although much will be lost if it does.

War’s casualties are well known, and hopefully we have a government that cares enough about its people to put an end to it. They should have learned from their previous mistakes and avoided them, in my opinion.

Both parties demanded that mediators be appointed. What was the reason the two parties couldn’t agree on who should undertake the mediation?

Essentially, I believe there is one thing we should all remember: everyone must be fair and impartial while looking at things.

In a war, not everyone carries a weapon, but what we’re seeing in Tigray is people lacking necessities such as banks, water, transportation, telephones, and electricity.

We were taught to believe that these services were destroyed during the war and that the government was unable to repair them, but it is now clear that this was not the case all along.

According to the Tigray regional government’s discussions with the EU, the federal government is leveraging these necessities when it could simply provide them to the people; it’s using them as a weapon of sorts.

War has laws, but the warring side is separate from the people. The people of Tigray are also Ethiopian citizens; hence the administration is harming its own people. Personally, I believe it is not the best way to proceed.

I believe that the federal government should have learned from its failures from the beginning. I don’t think initiating a full-fledged war with the TPLF was the best course of action. Instead of attacking, it should have been defending.

It was not a prudent move, especially with other powers involved. What I mean is that the items the Tigray regional government is requesting from the federal government are essentials for the people.

Both parties bear responsibilities for doing the right thing by the people. I’m not sure why it’s framed as a difficult choice. It is for the people of Ethiopia; hence the government should have established a consensus for its people by now.

To return to the subject of the negotiations, the government already pledged to begin them without any preconditions. However, the offer was to negotiate solely with the TPLF, without including Amhara, Afar, or even Eritrea. Do you think these groups should have been taken into account during the negotiations?

I believe the government’s strategy was flawed from the start. We’ve observed unlawful acts such as Tigray transferring land to Amhara with the assistance of other forces, so what has the Amhara area lost from Tigray?

We’ve heard on several times, particularly in the case of Welkait, that the region is attempting to reclaim their land. Is it even their land is the question?

The structure of the regions, in my opinion, is fairly apparent.

I say this because there was a region called Show that later became part of the Amhara and Oromo region, a place called Bege Medhir became part of the Tigray and Amhara region, and if Welo became part of Afar, Tigray, and Amhara, then there is really nothing new that happened between Tigray and Amhara, unless there is a belief that if I am living here, there is no one else there, which in that case makes comprehension difficult.

Ethiopia and its land are inextricably linked, so stating the land was mine and I want it back makes no sense to me. Questioning the demarcation system is understandable, just as arguing “using language as a way of defining regions is wrong,” but claiming land in the same country is not.

Ethiopia’s land is reserved for Ethiopians. Sitting and talking with Tigray and the federal government makes sense because the government is clearly offending Tigrayans and requires mediation.

Because Eritrea was involved in the attack, having Eritrea participate in the talks makes more sense than having the Amhara region participate in the talks.

Understanding this, I believe, is critical.

As a representative of Tigray, Eritrea and the federal government should have discussed Bademe and other issues. However, in actuality, the federal administration has not been representing the people and territory of Tigray.

Negotiations have been attempted by international groups. We’ve seen people like Obasanjo come to the country and make attempts, and many people were optimistic that the talks would take place. Do you believe the conflict resurfaced because those bodies failed to carry out their duty properly? Or do you believe they carried out their responsibilities correctly?

I believe we should have taken the initiative.

Both the federal government and the Tigray regional government should have demonstrated interest in the negotiations from the start; only then could other groups assist in getting the talks started.

According to my knowledge, they did not fulfill their obligations, particularly the African Union. Aside from creating articles and laws, I do not feel the AU has a consistent and capable ability due to one of their articles; Article 2H, titled humanitarian integration.

Although the article has been ratified, the Union lacks the resources to put it into action. According to that provision, the Union has the right but not the resources to intervene in cases of humanitarian rights breaches.

For example, the AU did nothing to address the Tigray situation; there were words but no action. For these reasons, I didn’t have high hopes for the AU. It still has a long way to go, in my opinion.

Other international organizations with influence and power have their own military intervention regulations as well. The west has previously attempted to exert pressure on the administration, but international organizations such as the EU and countries such as the US are preoccupied with other matters such as the Ukraine-Russia war.

They have the ability, but their focus has been diverted away from Africa. They, too, lack consistency, as evidenced by their actions in Ukraine. As a result, I don’t believe they’ve done their part

They have the power and capability, and yet here we are.

Who do you believe is to blame for the re-ignition of the war? Could the difference in negotiation beliefs be the cause, or do you believe the absence of the Welkait and Humera concerns is a contributing factor?

As I stated at the outset, if we refer to the Oromia area, we need to know which cities and counties comprise that region. That is, the problems of Tigray and Welkait should not be a problem. I cannot argue that the requirement should not be met because the federal government granted the land without Tigray’s approval and is now requesting that Tigray accept it.

People who lived there before are now refugees. People are unable to use their own funds because banks are closed. All of these difficulties should be considered as prerequisites.

It’s not difficult to grasp, even for the federal government. People are hungry, so shouldn’t that be addressed first as a prerequisite before any negotiations begin?

I cannot accept the idea that there are no prerequisites. Negotiations would be conducted with a boot on the people of Tigray if those demands were not met.

I don’t have any information on who restarted the war. To be certain, I would have to live there. I am like everyone else, listening to all sides’ arguments.

What will the people of Tigray face if the fighting continues? You’re already aware of the issue. What do you think about the present humanitarian crisis?

I don’t believe that anything positive can come from conflict.

War will take innocent lives, destroy property, and deplete the economy, and what could be worse than that? Tigrayans are at a significant disadvantage.

They are under attack from their own government, former foes such as Eretria, and adjacent territories such as the Amhara region. It’s painful to see how something that should have been resolved amicably has turned into an injustice against the people of Tigray, which is also an injustice against the rest of the country.

Hopefully, people will realize this soon. I’m sure there will come a day when our empathy will be tested. Ethiopia will pay a high price as a result of the conflict. In the war, there are no winners, but all are losers.

Do you believe the constitution can deescalate and resolve the conflict? What are your thoughts on the matter? Is it possible to resolve the disagreement based on the current constitution and the new statute established by the federation under which regions could decide directly to be regions?

There aren’t enough people organized to hold a referendum. Furthermore, Tigray has no representatives in the House of Federations. How will Tigray make its case? Who will be Tigray’s representative?

At this stage, it would be child’s play; the most serious offenses have already been committed. Atrocities in violation of the constitution have occurred. International agencies have branded it ethnic cleansing, and some have even called it genocide.

So this is pretty strange. On paper, the constitution is just and fair, but its implementers are not.

Is it truly conceivable to exclude Eritrea from the war in the future if Eritrea’s government refuses to withdraw its troops? Will their departure solve the problem in any way?

I believe we must consider how they got to be involved in the war.

Did the federal government request that its troops participate? Was the Parliament able to represent them? I mean, there are multiple options, right? Who delegated authority?

These points must be addressed first.

It would be pointless to question something that has no legal foundation. Was a formal agreement reached between the Ethiopian government and President Esaias? If so, what were the terms, and where are the documents?

Is it even conceivable for an Ethiopian Prime Minister to pull out such a deal out of the blue? He cannot. To begin with, it must go past Parliament.

As a result, the question of whether Eritrea should withdraw has become extremely convoluted, with numerous loose ends.

We have observed that since the beginnings of the war, a large number of Tigray-born residents living in various cities throughout the country have faced discrimination and harassment everywhere they go. They couldn’t return to Tigray due to the war, and during this time, everybody from Tigray or of Tigrayan ethnicity was in a plight. That had been subsiding to a degree in recent months, but now that tensions have resurfaced, what does this mean for Tigrayans living around the country?

This is a clear problem. Kibrom authored a book and was detained because of his ethnicity; he traveled to Afar and got into a lot of problems; I’m using him as an example, but there are many others like him.

What is the UN peacekeeping mission doing now? To be honest, I don’t think it was even this horrible during Derg’s reign.

Innocent people are openly mistreated based on their race, with some even losing their lives as a result. Tigray is not being represented by the government, and this must change. It must reflect on its previous activities.

We are on the verge of a major crisis, which must be examined thoroughly.

It is unacceptable to feel unsafe and to face severe discrimination in your own country because of your heritage. There was a glimmer of hope. As you stated, the current circumstance may pass as it always does, but it may leave wounds and scars that will not go as readily.

Do you believe Ethiopia will be restored to its former glory in the future? What is the hope in a situation when many already believe Tigray is no longer a part of Ethiopia or that it would have a referendum? Do you believe Ethiopia is one of them?

It depends on the next steps we take.

As far as I am aware, Tigray is still a part of Ethiopia. Even Eritrea would have been a part of Ethiopia if not for the Adwa war and its consequences.

Right now, looking at the government’s actions against the people of Tigray, such as refusing to reopen banks, the internet, and transportation, it appears that there is a power that does not want Tigray to be a part of Ethiopia, which is incorrect. The China Foundation for Poverty Alleviation (CFPA) is a non-governmental, non-profit organization that was established in 1989 as one of China’s largest charity organizations dedicated to poverty alleviation.

The foundation, among other things, provides healthcare and nutritious food to vulnerable populations, with a focus on mothers and children; supports education programs; provides scholarships; builds infrastructure; and distributes stationery to help communities thrive.

The Ethiopian Civil Society Organizations Authority registered the Foundation in 2019, and it has been actively working since 2015 by collaborating with local and international non-governmental organizations on various projects such as school feeding, clean water, women’s economic empowerment, and refugee support. Sisay Sahlu of The Reporter spoke with Emma XiaocenXuang, the country director of the foundation’s Ethiopian office, about some of the project activities in Ethiopia.

The Reporter: It is unusual to see the Chinese government involved in such areas, particularly in poverty alleviation. What are the goals of establishing this foundation?

Emma XiaocenXuang: This is the basis of a total charity organization founded in 1989.

The Chinese government’s fund for social enterprises provides 99 percent of its funding. In China, the foundation works in the fields of health, education, rural development, and livelihood. We are now investing in similar international engagement areas.

In Ethiopia, our official implementation agreement began in 2015 in collaboration with Ethiopia’s First Lady, Roman Tesfaye, specifically to begin school feeding in Addis, in over 43 schools.

We were collaborating with a local organization called E-network at the time, but they changed the name to Hailmariam and Roman Foundation. We were officially registered as a civil society organization in Ethiopia in 2019 after working with this foundation for about four years.

We started the registration process in 2017, but the government changed, so we put it on hold. We restarted in July of 2019.

What is the foundation’s international experience?

In 2005, we began working as an emergency aid provider, and in 2015, we officially began in Myanmar and Nepal as our first steps in Asian countries, with Ethiopia becoming our first African destination.

We began our project in Ethiopia and Sudan in 2015. However, we chose Ethiopia as the location of our regional office.

The Chinese government has extensive experience in poverty alleviation. What is the secret to their success? Are there any suggestions?

One component of the foundation is poverty alleviation. The People’s Republic of China has a very strong system, and China is very good at mobilizing all of the parties involved, such as companies, non-governmental organizations, the public, the government, schools, and research institutions, to engage in poverty alleviation.

All of those parties are working within this system, and there are numerous methods and areas for collaboration in the education and nutrition sectors. We incorporated the school feeding system into children’s basic rights and the education system, not just the Zero Hunger plan.

We also give quotas to poor areas, particularly at China’s two best universities, Tsinghua and Peking. According to policy, we provide a quota for the poor. This is because if you want to end poverty, you have to invest in education.

Similarly, we must construct a very strong housing system to ensure that all citizens receive the full package so that they won’t have to stress over things like, “Oh, I’m sick right now, so I’m going to the hospital and spending a lot of money, since the government is covering most of the cost.”

Both the government and non-governmental organizations offer benefits like insurance.

For instance, I was born in China. Both the government and my company provided insurance for me. However, I believe that identifying the poor is the most difficult task because doing so is the first step in providing aid to the underprivileged.

In this regard, the Chinese government created a system that can store all of a person’s information on a card that serves as an ID card. You can discover a person’s complete information using this card.

A person also has a complex set of criteria and evaluation standards.

If you have an income of up to 2300 Chinese RMB, that means you are getting out of poverty, and the next step is to observe and follow-up for a few years until you make steady progress out of poverty.

If they are in an accident or become ill, they will be forced to return to poverty and their names will be added to the poverty list again. So this is a national system implemented with strong leadership and complex evaluation criteria to identify, follow-up, and evaluate the entire system.

How can we balance the demands of the expanding population with the available resources? Is there any advice, particularly with regard to the food system?

You know, it could be the geographical location, but if you look at China, we have a very large land area. Even the climate in the north and south is vastly different. People in the south, for example, prefer rice as their main food, whereas people in the north prefer wheat. The majority of Ethiopians consume Enjara.

I believe it is about food diversity and nature’s gift. I couldn’t find any seafood in Ethiopia. Everything is imported. So, in comparison to geography and location, it is the gift of nature that I want to emphasize.

The second point to mention is that China has made substantial investments in its agricultural sector. We simply devised a number of methods for producing more food while working with limited resources.

For example, there is a well-known Chinese man who developed a type of improved seed by changing the genetics and received an international award. In the same situation, this new seed can produce more than ten times the yield of the original local seed.

Thus, we put more time, effort, technology, and other resources into our endeavors. The northwest region of China is characterized by extremely dry land devoid of any water. In order to effectively use rainwater for farm work during the dry season, we constructed a water sailor.

The other thing we do is drip irrigation, and we make good use of all the available resources. There are just too many aspects to it for me to list them all now.

When the land is distributed in pieces, the government in some places tries to use the entire land and bring all of the necessary equipment to do the farming all at once, saving money, time, and human resources while producing more products.

What can Ethiopia learn from Chinese agricultural practices in order to make better use of its resources?

The most important industry is agriculture. Ethiopia is also dependent on it.

I noticed teff is a main product, and it appears that farmers are having difficulty making a living from it. I recently traveled to the Amhara region, Somalia, Oromia, and other parts of the country. I noticed how friendly and hardworking the people are.

Their farming equipment, however, only uses cows; such farming was abandoned in China more than 30 years ago.

When I see this practice, I think to myself, “Is it possible for Ethiopia to develop without using adequate technological instruments?” And I believe it is preferable to bring more technology and do it more efficiently.

I want to be modest. I sometimes admire how they learn this from their ancestors and local wisdom, even knowing the direction of the wind and when it might rain.

However, because I am not an expert in the field, it is difficult for me to speak out without conducting an assessment and a survey. In China, there are numerous agricultural universities with a large number of professors and college students working in the sector.

They are professionals who are learning from both abroad and at home, and they provide an excellent representation of Chinese planting culture. Farmers are constantly being introduced to new cultures, technologies, and skills. We also organize farmers into groups to teach them how to plant properly in order to produce more products.

Another experience is that you are aware that individual farmers are extremely vulnerable and lack the clout and knowledge to bargain with the market and the upper chain. They only sell the original fruit for a very low price. They put in a lot of effort and got very little in return.

There is something in China known as a “cooperative” or “organization.”

It is a unified organization made up of all farmers, and the farmers choose just one or two people to lead their organization and send representatives to determine the prices of all products.

They bargain to determine the market price, and if they work together and make a profit, they split it.

The majority of Chinese practical and recognized engagement in Africa mostly takes the form of investments, loans, and credit provision. Humanitarian commitment to Africa is little known, particularly in comparison to the Western world. What prompted the Chinese government to get involved in such foundations and poverty-relief efforts?

The first point I’d like to make is that the China Foundation is a non-governmental, non-profit organization, and we take great care when discussing political issues. We are always neutral and on the side of the vulnerable.

My personal observation is that, initially, international aid is provided all over the world, particularly after World War II. So there is a tradition, and 40 years ago, China suffered greatly and received significant assistance from Western and other developed nations.

They invested heavily and brought some goods to China. You know, for example, for people like me, I have received an English education from the UNDP.

China was the first recipient of aid, and now that the country has matured and can no longer ignore these countries, it is time for China to accept responsibility.

So, doing business is one thing, and taking on social responsibility is quite another. There is no conflict, and we must proceed.

You earn money and support your people there, but you must invest locally to support the local community, which is natural. Here, we share common sense and concepts with both the government and the general public.

But, you know, because we only recently developed our economy to support the Chinese public, the concept of social responsibility is something that comes from a good heart. China has done a lot to eradicate extreme poverty, but poverty still exists, and people are becoming wealthy in a very short period of time. We sometimes solve the poverty problem, but we still need to work on the nutrition problem.

We can’t solve it quickly because it’s a long-term process.

However, the Chinese government is always concerned with the need to do something for the locals, and they encourage businesses to assist the locals and take more responsibility. It also encourages companies to invest abroad while also taking on social responsibility.

The funds for this foundation did not come from the government; rather, they came from the South-South cooperation initiative.

How much money have you put into Ethiopia?

We used USD two million this year, but depending on the project, the fund may grow if the situation allows us to move forward.

What have you done in Ethiopia thus far?

We want to do a lot of things, but some of our plans have to be put on hold, not only because of the COVID-19 outbreak, but also because of the conflict in Ethiopia.

We are now investing in education, especially in school feeding, panda bag, wash, and solar light projects. But school feeding is the first thing we’ve focused on because we believe the children deserve it and that it’s a basic human right.

In addition, we intend to construct the school kitchen and provide cooking supplies for the students.

We have received funding for it, but we have yet to make a decision.

The city of Addis Ababa has adopted the full standard of cooking that we developed based on Chinese experience combined with the first lady’s local experience. Initially, it was 40 birr for two meals (breakfast and lunch) per child.

We recently visited the Oromia region and plan to visit the Amhara region; we simply want to share our limited resources’ experience, models, and any other relevant information.

Our main goal is to create a model and share it with the government and other non-governmental organizations (NGOs) that want to get involved and contribute to the local community.

Do you believe this school meal can be sustained?

Of course, we will conduct an evaluation, and once we see how the school feeding program is working, we will not suspend it for at least three years. We need to ensure that once the program is running smoothly, we can extend it for more than three years.

But our aim and goal is to keep this school feeding program running from kindergarten to grade eight, and that is how we will proceed.

However, if the government says, “We have money and we don’t need you anymore,” we suspend it and shift our focus to other sectors.

Addis Ababa has started the program, but if you look at mothers’ cooking, you will notice that they only use three stones in the pot to cook the sauce, which consumes a lot of energy and is bad for their health.

They must get up early and are paid very little. As a result, we are attempting to provide more integrated and comprehensive support, such as building and maintaining the kitchen as well as providing cooking materials.

We commissioned some Chinese construction firms to create the design, which we have already implemented in one school.

It is a pilot project, and if it is useful and effective, we will undoubtedly expand it. However, the first step is to obtain electricity in order to provide modern cooking materials, which can also save energy.

How are schools chosen for this project?

We communicate and collaborate with the government, and they know which areas and schools require the most attention. We will go there on the ground and compare one school to another based on their recommendations.

Are you planning anything else?

Yes, there is a Panda Bag project that aims to provide kids with school bags that contain more than 100 school supply items, such as lunch boxes, water bottles, hygiene items such as soap and toothpaste, and all the necessary materials for the students.

Every year, we conduct an assessment by asking children, teachers, parents, and members of the local community what kinds of items they most need and which items they do not want.

We need to make more adjustments if any item is more needed. We make every effort to avoid any political or religious content in this gift. The donation was made in collaboration with the Ministry of Education.

We will send the entire quota to the Afar and Amhara regions this year because they are affected by the conflict.

What exactly is the challenge?

Of course, there are numerous challenges. Each project has its own set of implementation challenges. We have to buy the panda bags from local factories when we need to provide them to the children. We talked, argued, and bargained about the price and shipment from China with them during this process, because we couldn’t find the item in the local market.

Actually, we made it easier for you to invest in it in the local market, but you couldn’t find the right quality.

And something that worries me is that when we try to collect some items from the local market, I notice that they are coming from India or Turkey, and I believe that if we need to invest in the local market, we should get the materials from here, because buying imported materials is very expensive.

Of course, not this year. We paid nearly one million birr per year for the damage in the previous three years because we did not receive the tax-free letter. However, we received this letter this year. This entry was published on August 1, 2010. Yohannes Benti (PhD) began his career as a chemistry teacher for a high school in West Oromia in 1992, the same year he got his degree in chemistry from Addis Ababa University. He has been the president of the Ethiopian Teachers Association since 2009, having been elected three times. He is the lobbying group’s longest-serving leader, having ruled over it for more than a fifth of its existence.

He immediately became an active member of the Association. Before getting his master’s degree in Educational Planning and Management from Addis Ababa University in 2005, he earned a second bachelor’s degree in law from a private university. While running the Association, he got a certificate in Advocacy and Citizen Management from the Coady International Institute in Canada and a PhD in Educational Policy and Leadership from Addis Ababa University in 2019.

The Association has 700,000 members at all levels. For the past six months, university instructors have been protesting about inadequate remuneration and other difficulties, but the government appears to have mainly ignored them. They have even vowed to strike in the coming month if the administration does not present a satisfactory solution.

Yohannes is the president of the association that represents each university’s associations, as well as a member of the Board of Education International, a 32-million international union organization. The Reporter’s Samuel Bogale sat down with him to discuss the concerns of lecturers and the education sector.

The Reporter: What compelled university academics to issue an ultimatum as they request the government to make an adjustment on salary and work grade? Can you tell us what they asked, and why they didn’t get a response?

Yohannes Benti (PhD): The query from university lecturers is on Job Evaluation Grading (JEG) and its implementation, which the government decided to impose for all civil servants in 2019.

There were approximately 65 salary scales among civil servants when the government agreed to reduce these scales in 2010, but it was later reduced to 22 scales in 2019 and applied immediately.

Since 2016, the Association has represented both general education and university teachers in the study to implement the JED on civil servants.

We detected a problem with the scales and wages of general education instructors when it was brought to us for comments in 2019, soon before implementation. We later requested an adjustment to increase their grades from the Ministry of Education, which then met with the Civil Service Commission.

During the process, the requirement for university instructors was disregarded.

What substantial modifications were made to the pay scales for general education teachers but not for university lecturers?

The highest work grade for teachers, regardless of experience, was only six. When the JEG was established, we asked the government to help them improve their grades, and they eventually made it to grade nine.

These are the salary adjustments that university lecturers did not have the opportunity to make. High school teachers with a bachelor’s degree currently earn more than 12,500 birr per month, or 1,400 birr more than university lecturers.

The higher the grade point average, the better the salary.

What has been the reaction of university instructors since then?

They have been complaining during our series of meetings since its deployment in 2019, and have even requested back pay.

Last year, the associations at each university formally developed a list of approximately 14 questions. Our association was then part of a committee that made the requests to the then-Ministry of Science and Higher Education, which was later dissolved before responding to our queries.

The petitions have since been passed on to the Ministry of Education, which is now the regulator of Ethiopia’s universities.

They had complained not just about the JEG and salary scales, but also about overtime pay, consultancy fees, housing allowances, and tax-related difficulties.

Housing has long been a demand of the teachers, and the government has always claimed that it is taking action. So far, how has it been?

Since the implementation of a directive in 2016, teachers have been given preference for housing at their places of employment, either by building on a plot of land or by purchasing condominium homes in cities like Addis Ababa.

University academics are excluded from this due to claims that they were receiving housing benefits, and their universities may be in a better financial position to have their own buildings and house the teachers. However, some city administrations, such as Addis Ababa, have already started offering housing subsidies to their general education instructors.

For teachers, a home is not just a place to live but also a place to work. Regions like Oromia have long been doing outstanding work in providing teachers with houses by giving them land to build on. In Addis Ababa, some 5,000 instructors were also given condominiums.

For the obvious reason that many other people of the community also urgently require homes, the housing question does not receive a prompt response. However, up until the end of the previous year, roughly 110,000 teachers received land on which to construct homes, along with a few condominiums.

The government was recently warned by university teachers to respond to their inquiries or face a strike by the end of September. What is the position of your association on that?

Discussions can help solve issues. Such actions have a significant negative influence, thus we don’t advise them. We should keep asking and be open to the strong arguments we hear while at work.

The administration views raising the scale and compensation as a difficult task, given the current economic climate. The Association also understands the situation.

The homogeneity of pay across various universities is one of several other issues that are currently being addressed. Our Association is attempting to mediate disputes between the government and educators. Both the things that the nation can change and the things that should be put on hold should be done.

Threatening with prerequisites is useless. We condemn that.

The government has been supportive of general education teachers at primary, secondary, and vocational schools, including acts such as granting land for them to build their homes.

We will continue to request the same perks for university instructors.

The government recently announced that universities will have autonomy, beginning with Addis Ababa University this academic year and expanding to ten universities in two years. What are your thoughts on this development?

The proclamation for university’s autonomy has been in existence for a long time. It is unclear how it would be used at all universities at this point, but they are starting with Addis Ababa University and expanding to other campuses. That is something that universities would like as well.

Several teachers work at schools, primarily private ones, despite not having completed the teachers’ training program, also known as the Post Graduate Diploma in Teaching (PGDT). Who are the association’s members and who are the teachers?

Any educator working at any institution is eligible to join. A teacher is someone who possesses the necessary credentials, such as the necessary training, education, and capacity. The worldwide standard is also being followed in our nation.

Not everyone who attended school for a certain field of study is qualified to teach. Additionally, it is essential to possess the required pedagogical skills. Teaching abilities and expertise should be present.

You can’t teach English because you studied it. This isn’t just a problem in private schools.

Do government schools hire teachers who have not received PGDT training?

Sure. When schools experience a teacher shortage, one option is to train applied science graduates in PGDT and hire them in schools.

Initially, the goal was for these graduates to be trained and deployed, but due to an acute shortage of instructors, they were authorized to begin teaching immediately.

This is an issue in both private and public schools. After much deliberation, the government decided to require instructors in both private and public schools to complete the PGDT program.

The requirement that teachers need to fulfill after completing PGDT training has actually been a part of government legislation for quite some time. This training is offered by a small number of universities to all teachers, domestic and foreign. Private schools will be required to pay for their own staff training.

Teachers in universities and in general education are unemployed in northern Ethiopia’s conflict zones. How is your organization supporting these educators?

University professors from the universities in the Tigray Regional State would be able to register online and request reassignment, according to a statement from the Ministry of Education.

Even while we know that some lecturers accepted the risk and continued to work, there may still be individuals in the area who are unable or reluctant to do so.

We have a list of the teachers who were displaced in relation to general education teachers. We are giving a small sum to a few of them as a sign of solidarity.

Our request for assistance in reassigning 43 instructors was made to the Ministry of Education and even the Ministry of Finance, but we heard back that neither the Ministry of Education nor the Ministry of Finance oversee any elementary or high schools.

We will continue to support them while putting pressure on the government to transfer them to any school and location around the nation.

How is the Association, a significant player in the education industry, reacting to the most recent changes and new rules?

The education reform research, which began in 2016, was the catalyst for reform. The public then debated it in 2019 prior to its implementation. University education was expanded to four years, and a national high school graduation exam was administered in grade twelve. In Ethiopia’s justice sector, Tamiru Wondmagegnehu is a colossal figure. He has been working for fifty years and has witnessed four regimes in addition to becoming a walking library. He has a master’s degree in legal studies and international law.

He started out as a judge under the imperial regime and eventually worked his way up to become the vice president of the Supreme Court, Special Court, and High Court under the socialist Derg regime. However, he was detained along with three other Supreme Court justices when the EPRDF seized power.

Following his release from prison, he founded the Tameru Wondm Agegnehu Law Office, which rose to prominence in the nation. Ashenafi Endale Of The Reporter sat with Tamiru to talk about Ethiopia’s legal system.

The Reporter: What similarities and differences can you find between the legal system, the institutional makeup of the judiciary, and its operations under the imperial rule, the socialist Derg, the EPRDF, and the current administration?

Tamiru Wondmagegnehu: The Ethiopian legal system can be divided into four periods: before 1900, between 1900 and 1941, between 1941 and 1974, and since 1974.

Since Derg, we have been ruled by autocrats akin to the French Revolution. Under these regimes, the courts have been altering their characteristics and duties.

Ethiopia’s triumph at Adwa falls under the first category because it is known around the world and has received attention. Four diplomatic consulates started operating right away in Ethiopia. Ethiopia became the only nation of color to be acknowledged under international law.

Following the 1648 Westphalia treaty, Europe came to the conclusion that there was no other nation state than Europe and decided to establish a European nation state. Therefore, only European nation-states were subject to international law before 1900.

According to international law, Muslims and Blacks in particular were not eligible. That is why Europe began its colonization of the western hemisphere, including its policy of rushing to conquer Africa.

No international law imposed sanctions on Europe. They consequently run ferociously to satisfy their need for resources and markets. Ethiopia was the only African nation at the time to have created its own state boundary.

In circulars he sent to England, Germany, France, and Italy, Emperor Menelik described and mapped Ethiopia’s active boundaries. Ethiopia did not draw its border with other African governments, but rather with European invaders. At the period, as to this day, Ethiopia was surrounded by European colonial governments.

What modifications were made to the foundational rules of justice by the regimes?

Fetha Negest, a 500-year-old written code of justice in Ethiopia, was created under Zerayacob’s rule. However, the zufan chilot (the king’s court) was the only institution at the top until 1900. All the officials of the kings judge matters according to their ranks.

Foreigners began to enter Ethiopia after 1900, and Fetha Negest was no longer useful for adjusting to modern rules. The first cabinet was founded in 1900 by emperor Menelik.

The emperor was under pressure from the foreigners, particularly the French ambassador, to create a consular court. Foreign judges were therefore permitted to sit as judges alongside Ethiopian justices after 1900. The consulate court operated from 1900 until 1941.

Emperor Haileselasie I disliked the consulate court system when he returned from exile in 1941. Thus, in 1941, he issued the Negarit Gazette’s founding proclamation for the first time. The second Negarit, which announced the development of a modern legal system in Ethiopia, was released that same year.

Haileselasie gave the order for English professionals to set up police and court institutions in Ethiopia, which were established at the supreme, upper, Awraja, and woreda levels.

The head of the Supreme Court was a foreigner. Experts received their education elsewhere. However, all of the judges on the supreme and higher courts were foreigners. This persisted up until 1965, when Niguse Fithawok, the first Ethiopian, assumed the presidency of the Supreme Court.

The final judge during the emperor’s reign was Hailessilase. After the emperor was deposed, there was a void. Thus, in 1987, the cassation bench was formally constituted.

I served as one of the justices on the cassation bench during the Derg administration.

Derg didn’t interfere with the system of civil courts. However, the government formed the military court system in addition to the already-existing civil court system. It never presented its cases before a civilian court; instead, it either executes its victims immediately or takes them to a military court.

Judges were therefore shielded from political interference.

The judges were fully removed when the EPRDF came to power. It stocked the legal system with cadres and individuals who could advance EPRDF interests. This persisted up until the 2018 inauguration of the present administration. There are several things that the present administration is working to fix.

What aspect of Ethiopia’s legal system is most lacking?

The practice of law is not based on reason but rather on experience. Justice must be acrobatic, just like life. Every judge gains knowledge from the rulings of earlier judges. Of course, some claim that this only applies to “common law” and not “civil law.”

Ethiopia adopts a system of “eclectic law.” This indicates that the principles were taken from several legal systems. Ethiopia’s legal system, however, is a little unclear.

On the one hand, we have the civil law cassation bench. However, a cassation bench’s ruling becomes law, and all courts below the bench must follow the sentence. The model is now comparable to common law.

The Ethiopian justice system has been disrupted by this difference in legal systems. Continuity refers to the use of prior judgments as standards for upcoming cases. Continuity is crucial.

Continuity provides predictability and confidence, two important advantages. Your win-loss ratio must be accurately known before you file a lawsuit. All of the stepping stone articles are already familiar to you. The courts would be unable to accomplish their jobs if every case required an interpretation of the law. A predictable life cannot be ensured by a judicial system like this.

In both the United States and Europe, attorneys provide clients with percentages indicating their odds of winning and losing. Ethiopia is the only nation without consistently applied laws. The main flaw in Ethiopia’s justice system is this.

The court systems and Ethiopian Bar Association must cooperate on this.

The Ethiopian justice system’s organizational structure is the second significant shortcoming. Ethiopia’s legal system was totally centralized, like one sun, one sky above everyone, prior to the EPRDF.

Ethiopia was divided by the EPRDF into nine different states, and that number is currently rising. There was discussion about how to reorganize the legal system after the EPRDF came to power and Kifle Wodajo was selected the leader of a group of specialists.

Some contend that, like prior governments, the justice system must be centralized. But the head of the Indian Supreme Court, Bagwati, present to offer advice, contended that Ethiopia cannot afford a decentralized court system. Others, however, believe that since the EPRDF formed a federal government, it must be decentralized.

Finally, the regional states and nine distinct court systems with nine supreme courts were approved by Parliament.

Ethiopia became the second nation after the US to implement a decentralized judicial system.

Under the US Supreme Court, there are 52 supreme courts. Because of this, America is the nation with the most lawyers. It is a new jurisdiction every time you enter a US state, thus the lawyers have to learn numerous laws in one nation.

The American federal structure is imitated by many countries, including Germany, but not its legal system. A decentralized court system was rejected by Nigeria, India, and many other federal governments because it was too expensive.

A decentralized court system appears advantageous at first glance. However, it is also expensive in terms of resources, both human and governmental. All we can do is hope and pray that Ethiopian leaders will be able to change this and unify the legal system.

How can the two main bottlenecks be eliminated at this time?

The constitution ties everything together. Ethiopia’s judicial system, however, can be centralized despite the fact that the structure is a federal one. India and Nigeria are two prime examples.

Currently, if a lawyer in Ethiopia wants to practice in many regional states, he must obtain a license from each of the regional states. However, if Ethiopia’s justice system is centralized, all of the regional states use the same article. A single license allows a lawyer to practice law across the entire nation.

In comparison to a federation, Ethiopia’s legal system is more like a confederation of states. Such a system is unique to the US, and only they can afford it.

Ethiopia is a small nation when compared to the size of America. Therefore, a decentralized justice system is not needed. It is incredibly difficult to reform and modernize Ethiopia’s judicial system. There may still be ineffective judicial systems in remote areas of the nation even after creating a centralized one.

How can the present border disputes with neighboring nations be resolved given that Ethiopia’s boundary was shaped by colonial powers?

England, France, and Italy all had boundary accords with Emperor Menelik. However, agreement does not imply demarcation. Ethiopia naturally agreed with England but not with Sudan. The current issue with Sudan stems from this.

The Prime Minister of Sudan, Alnimeri, and Haileselasie got along well. Just before the emperor was ousted in 1972, they were about to start demarcating the border. I hope Sudan and Ethiopia will start the delineation process right away.

Emperor Yohannes pleaded with England in the 1870s for assistance in keeping Masawa under control. Even though Yohannes assisted them in rescuing English troops in Sudan who were being surrounded by Mahdists, England refused. Meles Zenawi voluntarily gave over Assab a century later.

This is a huge contradiction.

But the situation with Sudan is becoming increasingly complicated.

As long as the 1972 agreement is in force, it can be resolved. The issue is that the borderlands’ value has increased recently. Ethiopia’s biggest issue is the absence of a succession plan whenever a new regime takes power.

Haileselassie came to an accord and was about to draw the line with Sudan. Sadly, Derg surpassed Hailesselasie. Derg, however, started over after stumbling everything the emperor had begun.

No Ethiopian administration adds on the successes of the preceding administration. Whether it be with the legal system, politics, development, or anything else, this is the root of practically all of Ethiopia’s problems.

Others have suggested Ethiopia may be able to reach the Red Sea via Ras Dumera, a thin free line that runs between Eritrea and Djibouti border.

Africa is home to fourteen landlocked nations. There is no other nation, however, that is as big, and as populous, as Ethiopia. The thirteen African nations that were already landlocked begged the UN to intervene before Ethiopia became landlocked.

Aid couldn’t get to these landlocked African nations. Even when a machine is replaced by a different brand, spare parts still come in. Because perishable goods take longer to reach the landlocked countries, importing them was unimaginable.

In order to negotiate between the African states, the UN tasked Yusuf Ahmed, at the time Ethiopia’s transport minister. This occurred under the Derg, shortly after which Ethiopia became a landlocked country.

A Kenyan academic once stated that Africa shouldn’t have more than 20 ports-accessible nations. He claimed that because even tiny governments are permitted to be countries, landlocked nations are created, dividing Africa into 55 countries.

However, the AU is introducing a very efficient procedure to grant all African nations access to ports. This will become a reality once the African Continental Free Trade Area (AfCFTA) is completely operational.

Of course, until Ethiopia uses them, the ports in Djibouti, Eritrea, Somalia, and other countries on the horn of Africa stay inactive. Masawa Port was undoubtedly a crucial tactic in WWII, acting as a stepping stone for the allied troops’ advance into Eastern Europe.

Currently, Ethiopia is attempting to enter Berbera port, which is positive.

Haileselasie made every effort to integrate Eritrea into Ethiopia in order to get access to the port. Assab port is obviously useless if there is a blockade of any type at the Suez Canal or Babel Mandab. Ethiopia is better off using Berbera port. There is nothing anyone can do because Berbera is the gateway to the ocean.

How can Ethiopia’s efforts to secure ports be impacted by Somaliland’s de facto status and lack of recognition?

The issues in the Horn of Africa can only be solved by peace. The horn has a sizable population. The chaos persists if this force is not used to development. Countries in the Horn of Africa must work together for the benefit of all.

The fewer jobs we produce, the more unstable we become.

Why do young people join OLF-shene, TPLF, or other armed organizations when they could get a respectable job, a home, a car, and vacation packages? Everyone wants to see equal development because they want to see their own country prosper.

Progress can lead to peace.

Due to the absence of an independent African state at the time, Haileselasie was banished to England. For that matter, there was no state.

Many people agree that Africa’s instability stems from the distribution of the same ethnic groups among its various states. Can African countries redraw the borders that colonial forces drew and reestablish nation states?

Ethiopia was at the vanguard of African decolonization in 1963, when the Organization of African Unity was established in Cairo. The main issue when the UN decided to decolonize was how to recognize and define the borders of African states. War was imminent amongst Africans if they had to trace frontiers back in time.

The UN and OAU ultimately opted to keep things as they were. In other words, borders and states begin at the location of the colonial boundary.

Each nation in Africa has territorial claims. We can’t, however, go back in time and fix it.

Ethiopia once ruled a sizable region, including the modern-day nation of Yemen, during the administration of King Kaleb in the fourth century. But we can’t claim it now.

The answer is that by uniting Africa through the AfCFTA, the AU’s economic integration agenda can eliminate the need for political frontiers.

Of course, Ethiopia is the nation that will be most negatively impacted by the status quo. The Congo, a sizable nation abundant in natural resources, was about to become landlocked. However, they were able to enter the Atlantic Ocean by Kabinda that was incredibly small. By the way, Congo provided the uranium for the bomb dropped on Japan.

A little opening between Djibouti and the Eritrean border allowed Ethiopia to reach the Red Sea. However, nobody is willing.

A serious hunger broke out during the Derg, and Nordic nations wanted to send aid cargoes. However, there was no way for the supplies to reach Ethiopia. Nobody would have protested if the Derg had taken one of the ports in the Horn of Africa at the time by force.

Ethiopia’s survival will depend on how its ports are handled in the current context of rising import volumes and growing population. It will either receive a peaceful response or a harsh one. Ethiopia must have a port, if only to use the congested route between Eritrea and the port of Djibouti.

The Ethiopian government also has to improve diplomatic connections with the surrounding nations so that they will consent to us establishing our own port.

Do you believe that Ethiopia’s conflict and ongoing instability are a result of the country’s power structure?

Ethiopia’s primary issue is underdevelopment as a result of missing out on the Enlightenment, the Industrial Revolution, the Agrarian Revolution, and the Technical Productivity Periods of the middle Ages.

According to Gibbon, who lived two hundred years ago, “the Ethiopians slumbered for over a thousand years, oblivious of the world by which they were forgotten.”

Of course, since we remained closed, we were not colonized. The mountains of Ethiopia were impenetrable to any force. Due in part to the progress that colonizers sparked, several African nations outperformed us.

Ethiopia nevertheless continues to be rich in resources and treasures. The only nation in Africa with a written past and its own alphabet is Ethiopia. 80 percent of Ethiopia’s bibles were completed and authored in the sixth century. At the time, the western bible was still in its infancy.

Additionally, Ethiopia was crucial in the spread of Islam and Christianity. Ethiopia was the destination of the first Hijira, not to Meca and Medina.

Unfortunately, because we were isolated for a millennium in between, Ethiopia’s civilization did not maintain its early impetus. We woke up when the world is already way ahead of us. We were still plowing the ground with oxen and yolk when Ethiopia awoke once more.

Youth in rural communities no longer have access to land for farming as a result of the land policy. Therefore, everyone is moving to the cities. Not only are Ethiopian towns crowded, but the proportion of farmers is out of proportion to the country’s growing consumerism.

Unemployment is widespread. There is a shortage of farmland. Ethiopia’s current issue stems from this. For the first time, PM Abiy Ahmed is attempting to spread large-scale agriculture to lowland areas in addition to the rain-based, often small-scale farming in highland areas.

What do you think of the administrations ongoing judicial system reform?

We voluntarily submitted to Ethiopia’s complicated legal system. One institution cannot bring about justice system reform. Huge amounts of public resources are being used by the decentralized justice system.

Ethiopia cannot support a decentralized judiciary when dozens of regional entities each have their own legal framework. This has to be combined.

Abiy recently complained to the parliament about how corrupt the legal system and police are. A few judges have been furious. It is well known that some judges accept bribes. Even judges of the top court experience this.

It is incorrect to hold the PM responsible in a legal system as tainted as Ethiopia’s. Though it is a challenging undertaking, we must find solutions to fix the issue rather than pointing the finger at one another.

The Court has the most authority in any nation that wants to advance. The future of the nation, business, and daily life depend on the Court.

What big setback do you believe has occurred since PM Abiy came into power? Was the transition peaceful?

We must research the causes of our ups and downs. Ethiopia has not done a very good job at nation-building. There are distinct state borders in Europe. However, the societies are very interconnected and quite similar. They are similar in terms of culture, languages, and universities. But the Ethiopian society has been segregated from one another, living in separate cultural enclaves.

Social media is currently dividing our society even more and pitting everyone against one another. Nobody is accepting accountability. We have much work to do in order to build a civilized society.

Ethiopia’s unemployment and unrest don’t surprise me because I am aware of our incapacity to provide quality labor and excellent jobs.

Five years ago, nation-building and good governance were the social movement’s top demands. Today, the issue has expanded to include the state’s continued existence. The student movement during Haileselasie began with a “class struggle” and concluded with ethnic politics in a similar manner. Why do political groups in Ethiopia consistently fail to achieve their goals?

Due to the students’ limited exposure to other ideas and the “class struggles” popularity in Cold War-era politics, the students’ movement adopted it. However, the class battle diminished and gave way to an ethnic conflict, which Meles Zenawi pursued.

Many Ethiopian academics today, particularly those in the diaspora, believe that ethno-nationalism poses a threat to the state’s very survival.

This indicates that the nation-building process in the country has been derailed by ethnic identity politics, which is having an impact on both the nation-building process and the state’s very existence.

Nationalism is not necessary for Ethiopia. The United Kingdom, France, the Netherlands, and even Italy are examples of nation states. The US, however, is not a nation-state. Europeans make up half of the American population.

One hundred years ago, Ethiopia became a nation-state. However, due to a number of criteria not being met, Ethiopia was unable to become a nation-state.

Many academics, particularly those from Addis Ababa University, continue to vehemently inform the media that Ethiopia needs to become a nation-state.

Talking about nation states now is a farce. Instead of a nation state, Ethiopia needs to be a patriotic state. Everyone in their own ethnic group is patriotic. Every Ethiopian, including Oromo, Kembata, Amhara, and everyone else is a patriot. That is what the United States is.

Everybody is present in America, including Latinos, Chinese, Indians, French, and Blacks. However, they never give up on the United States, which is their nation. Although they are patriotic states, they are not nation-states. To advance a patriotic state, we must work together.

In Gojam, there is no such thing as a pure Amhara. Every ethnic group has ancestors from different ethnic groups. Only our names reflect our racial origins.

Ethno-nationalists and ethio-nationalists swing back and forth in Ethiopia’s politics all the time. This constantly sparks conflict and a struggle for dominance. How can we transform it into a nation of patriots?

The constitution may impose restrictions on it. It can be written into the constitution if everyone agrees to it. Otherwise, Ethiopia will experience civil conflicts and revolutions.

Many people concur that the majority of Ethiopia’s issues can be resolved if the present constitution is altered. Do you agree?

It should be altered, in my opinion. Both educated and uneducated individuals are condemning PM Abiy for sticking with the current constitution. The constitution is frequently compared to an Ark. If the public does not believe in the law, it is just a piece of paper.

Therefore, if a carefully considered constitution is substituted, Ethiopia’s issues can be resolved.

Human rights advocates and even government representatives claim Ethiopia’s judicial system, especially the court system, is unprepared to handle cases involving human rights violations. They advise Ethiopia to start accepting the jurisdiction of extra-national judicial systems as a result. This means that Ethiopia must recognize the authority of regional and international tribunals over any violations of human rights.

Does doing so undermine Ethiopia’s sovereignty?

Only when the executive, judicial, and legislative branches operate in accordance with the check and balance principle can Ethiopia’s justice system be said to be in operation.

Judges are only answerable to the law. Because I criticized the Derg’s military court system, I was removed from my court position. Since 1948, Ethiopia has fully embraced the rule of law. Judges must, however, exercise their authority.

Courts have full authority to resolve any dispute, with the exception of arbitration disputes. Ethiopian courts have the authority to adjudicate matters involving violations of human rights, particularly at the high courts and Supreme Court.

The establishment of a different type of court system in Ethiopia must be spelled out in the constitution. For human rights matters, we can set up special benches, but we cannot establish a separate court or division.

The UN human rights commission is currently requesting entry to the country in order to examine human rights abuses that occurred during the Tigray war. The agreements and treaties were approved by Ethiopia. What would happen if Ethiopia resisted?

We have observed that the west consciously wants to harm Ethiopia in numerous instances. Since the founding of the League of Nations, this has been the case. Sanctions are being imposed on Ethiopia.

Mussolini would not have been able to attack Ethiopia if only the US had imposed gasoline sanctions on Italy. Because the US continued to supply fuel to Italy at the time, Mussolini resumed the invasion.

Ethiopia was brought up thirteen times in UN Security Council discussions last year.

International law thus serves as a vehicle for both justice and abuse.

The US regularly uses the UN to impose sanctions on nations it wants to destroy.

Never should Ethiopia yield to outside pressure.

Ethiopia has ratified a number of international human rights accords and conventions. By the way, Theodore Roosevelt’s wife was the one who first proposed the 1948 Universal Declaration of Human Rights (UDHR).

It forbids the use of cruel or inhumane punishment. Ethiopia had a death penalty at the time. The emperor delayed ratifying the UDHR rather than repealing the death penalty law. Ethiopia, however, is the first country in Africa to sign the deal.

Politics is at play right now, not just a general worry about human rights abuses. Before authorizing foreign investigators and acknowledging their jurisdiction, it is imperative to exhaust all domestic options. Extra-national venues may be taken into consideration if there is no statute allowing human rights victims to appear in court or if the court is unable to uphold the law.

America commits to defending democracy. Democracy is the majority’s way of ruling. Therefore, by simply agreeing, the majority can flip the truth on its head.

Can the Chief Justice of the Supreme Court call the executive to inquire of him or her? How are checks and balances made?

The Chief Justice of the Supreme Court lacks any judicial or executive authority. The president only serves as the court’s speaker. The president only responds when asked.

By the way, a judge on the Supreme Court is distinct from a judge in a lower court. The author of ye’ ewunet Mirkuz, and a lawyer, Wondimu Ibsa was born in 1947 in Arsi. Having survived the 1969 revolution, he joined Wez League and then started teaching. In his career as a former politician, Wondimu had gone through several challenges as a former politician before becoming a lawyer. He survived the 1969 revolution in Ethiopia and was arrested in the famous Maekelawi for 150 days. When he decided to become a lawyer, his first task was serving political prisoners facing terrorism charges. Lately, he is more known for sharing his political views on main stream media outlets. The Reporter’s Selamawit Mengesha sat down with him, as he reflects on current affairs and his journey in politics of Ethiopia.

The Reporter: can you tell us a bit about yourself?

Wendemu Ibsa: I was born in what is considered a large family. I had 17 sisters and brothers and my father had 47 children from 3 different women. When I was growing up the schools in Arsi used to encourage us to learn Amharic. And some people associated it with racist remarks but it was purely to help us learn other languages.

I was amongst the students who survived the 1969 revolution, I was in ninth grade and I remember crying to my mom when soldiers would beat us senseless. When the ‘edget behibret’ campaign started, the Ethiopian People Revolutionary Party (EPRP), wez league (ወዝሊግ) and All Ethiopians Socialist Movement (AESP) were wreaking havoc across the country.

I joined senay leke’s party Wez League. Students whose average was above 90 were selected to give after class courses back then, for which I was selected. I started working as a teacher starting from 1969 to 1971 with a 180 birr salary. Through all of this, we were running the revolution on the side.

I’ve went from having my parent’s religion to having no beliefs but I eventually got baptized at 40 years of age and became an orthodox Christian. I then worked as a money collector at the church for four years.

I was also detained in the famous ‘Makelawi’ for 150 days, when EPDRF took power in 1983.

I’ve also worked as a supervisor and a director in Hawassa. As a lawyer in Adama, I joined the Oromo Federalist Congress in 1998–2002. In 2006, when more than half of OFC members, including Merara got arrested, I decided to give my services as a lawyer. Back then, lawyers used to charge more than 300,000 birr to represent people accused of terrorism, because representing people accused of terrorism could label them as terrorists as well. Knowing this, I offered my services at makelawi for free, and since then I have represented 600 people accused of terrorism.

When I was serving free of charge, I faced a lot of opposition from people including my family. I remember a judge telling me that I can’t defend people charged with terrorism anymore, but 17 of my colleagues had already decided to represent those accused of terrorism.

Prime Minister Abiy Ahmed (PhD) has said they will not arrest anyone without due diligence, yet we are seeing a lot of people arrested abruptly and detained for several days without cause. What do you think changed?

“We don’t arrest without due diligence,” is just a political way of speaking. Currently, the parties in Ethiopia including the incumbent follow a party politics system, meaning it is the top executive’s playground. A political party stands for justice for those that are with it or against it. The parties in America, the republicans and democrats, are political parties, while Prosperity Party, Ezema, ABEN, Enat, amongst others, look like they are trying to shift from party politics into political parties.

A lot of Ethiopians were involved in the green legacy campaign. But out of the 53 parties, not more than 10 were involved. Why weren’t the rest involved? The legacy is not for the PM but rather for generations to come. They could have contributed to something that made a difference but the only objective of party politics is to obtain power.

When Abiy said that, it was in the essence of party politics. To whom does the PP belong to? Is it for the prosperity of the city, the rural area or the farmers? It should have been called “Ethiopia’s prosperity political party.”

Political parties care about the country, its people, history and culture. Even if political parties try to gain power they still stand for the people. The Civil Code, which has been in action since 1952, says that people can be arrested based on suspicion with or without a court ruling. Back in the feudal days, it was only allowed to arrest suspects from 6 in the morning till the sun sets but not after even if they were guilty. Police can surround him but they can’t arrest him, no matter who the person is. If Abiy does not practice this law, then the EPRDF and Derg’s plague hasn’t quite left his system yet.

The practice that is becoming normal these days where they hold people in prison for eight or nine days is not acceptable by law. Statements like “We don’t arrest without due diligence” are said with a political intent. Politicians and political parties think about what to say to get more applause instead of thinking what would actually benefit the people.

What is the cause for the killings of innocent people in Ethiopia? Who do you think is responsible for these acts?

The instability in Ethiopia has its roots dating hundreds of years back, back when colonizers had their eyes on Africa. The victory at Adwa was not just a victory against Italy but against the whole of Europe. Ethiopians used to unite to defeat these outside forces. When the west found out the secrets to Ethiopia’s victory happened to be in our unity, they needed to dismantle this unity through civil wars and parties. These parties who have a budget from the west have the sole purpose of creating conflict and rift between ethnicities.

Controlling the source of income was also a measure used by the west since the country is dependent on donations. After the 1945 World War, Japan was forced to adopt a strong military system. Within 30 years, Japans capacity was just as good as the UK, after changing the policies they were forced into. The donations are an indirect attempt at colonization.

The crimes we’re witnessing today is a result of years of planning by the west. There is this thought process circulating where people think their ethnicity came first or that it is better.

Even banks organize themselves based on ethnic lines; they have the “divide” mentality. People that are losing their lives are Ethiopians and there is no need to classify them based on ethnicity. Being proud of your ethnicity only validates Ethiopia more, because our ethnicities are found within Ethiopia.

If we take the religious approach on how humans originated, it started with Adam and Eve. They were human beings and not Amhara or Oromo. We are Ethiopian’s first then ethnicity follows; so, to refer to the atrocities in Wollega as atrocities committed on Amhara women is accepting the narrative pushed by colonizers.

Amhara’s policy is Oromia’s policy and vice versa; we can only salvage Ethiopia when we stand all for one and one for all. Being Oromo, Amhara or any of the other 80 ethnicities is natural but claiming one is superior over the other is immoral.

How do you think this can be mitigated?

Parties and politicians that stand for terrorism should be dealt with to make way for the people to have an active role. The government feeds 1.7 million students in Addis Ababa and its surrounding. It provides books, uniforms and bags. The only thing families worry about is providing the dinners. This is not something to overlook. When I say this am not saying prosperity party or Dr. Abiy are without flaw, all governments have flaws.

The community’s outlook on laws and courts is relatively better than it was before. Do you think this has anything to do with the organizational change? If there is change since most organizations are individualistic, how can that be mitigated and continue long after the individuals have left?

Prosperity Party asks organizations to help it achieve democracy. A strong military can only be formed when there is a strong organization. Law enforcement is the government’s duty while respecting the law is everyone’s responsibility.

In a meeting amongst 1000 lawyers in Oromia held by the Oromia Lawyer’s Association, a lawyer said “there are no courthouses in Oromia, or judges. The only place where judges and courthouses exist is at the Oromia Supreme Court.” But there are Oromo judges and courts in Ethiopia. If we’re accounting for injustices, then every other supreme court could come into question. The acts of a few lawyers and judges that are deeply intertwined in ethnocentric beliefs do not dictate the profession as a whole. Even the PM has no right to misjudge the profession because there are honest judges and lawyers.

What should be done to promote accountability? Would people who have violated human rights be questioned in the court of law?

The current atrocities are due to terrorists, whether they are Oromo terrorists or Amhara terrorists. Both cultures have their own way of justice that involves forgiveness. The involvement of the elderly is needed.

Political parties are creating a better life for their children while condemning the innocent. Those responsible for these acts of terrorism shouldn’t be judged in court. All the region’s religious leaders and elders should judge and reconcile things themselves.

The newly formed National Dialogue Commission plays a vital role for this, but political parties have been skeptical since its inception. If all Ethiopians come together, it will help the national dialogue to be successful. As politicians put it, the dialogue is not one carried out between parties but one that involves farmers that make up 85 percent of the population. As of now racist politics and ethnocentric politics have spread.

The current problem will not go away easily. It will take several years of working together.

There is a noticeable change in courts after Meaza Ashenafi took power, but there are also a lot of problems at the same time. Just like how a teaspoon of poison could ruin a barrel of water, the acts of a few taint the entire institution.

How can we stop the problems in all the regions of Ethiopia? How can the region’s questions be answered while maintaining peace?

The people should give information as a way of solidarity with the government. The 547 representatives at the Parliament represent 120 million people. For a parliament member to talk about their own ethnicity alone is really shameful, they are not there to represent the Wereda that put them there but to represent the people of Ethiopia.

If there are people in Parliament that spread fake news, then prosperity party is negating its own progress. There are a few that are openly opposing the death of fellow citizens. When a citizen is hurt in wollega, there should at least be an opposing brief against it from the Parliament. If prosperity is leading the country, a region’s Special Forces should be able to help another region’s army. The defense force alone cannot save the country.

Rophnan Nuri, commonly known as Rophnan, is a prominent performing artist, musician, DJ, singer, songwriter and an audio engineer that blazed a trail for Ethio-infused electronic and house music. The Artist made a name for himself as DJ Rophi before releasing his first album, Reflection, in 2018. The album made him the first ever artist to release an electronic music LP in Ethiopia, becoming an influential figure locally and internationally.

Mixing traditional sounds with futuristic undertones and a powerful lyric, he dedicated his debut work as a voice for his generation. His work earned him multiple awards, featured with world famous groups like Major lazer, and collaborated with the Zambian rapper Chef 187 on the coke studio stage. He also held a successful country wide tour for a year and half.

His work and demeanor has earned him a feature on Forbes Africa’s 30 in the creative category, making him the first Ethiopian to feature on the list.

He recently released a successful album “3” earlier this year, which he followed up by “6” this past week. The two albums, which were released after his deal with Universal Records, offer incredibly produced music directed at the youth.

Rophnan announced the final album of the trilogy will be released before the end of 2022. Yosthena Aynalem of The Reporter sat down with Rophnan to talk about the mystery that is Rophnan Nuri.

The Reporter: let’s start from the beginning. Can you tell us about your upbringing and how you got into music?

Rophnan: Funny enough, it did not start out with music for me. Yes, I have known and loved music all my life but my journey did not start there. I am a singer but I am not just a singer, or just a writer. I am a recording artist that engineers and produces as well, but I am also a DJ. I think when you’re all of these things your journey must start with one thing. For me, it was recording.

I started recording sounds from a young age and little by little I went from recording to learning the guitar, DJ’ing and then singing. It all unfolded gradually to make me the artist I am today.

I remember I started recording my mom when I was 10 years old. That was my first experience of getting into music. Because to me it wasn’t just music, I thought everyone had the same relationship with sound and music as I did. Through time, I came to realize that not everyone was drawn to it the same way. At that age, I used to perform in front of students and they would love it, but I thought that was normal at the time.

I started recording my mom out of the love I had for her, I would use tape recorders that I make from scraps; I have always been a physics head because it helped me know the world better. I would always make things up from run down electronics or collect parts like dynamos; I have always been that kid.

I always wanted to keep a record of my mom’s voice in my tape recorder, so I’d play it on repeat until my battery dies and that was a 10-year-old me falling in love with sound and frequency. From then on, I started recording my little brothers, my neighbor’s kids, and my friends.

It became my way of keeping a photograph or picture of some frequency, those records painted pictures in my head that ensued emotions in me just like a picture would. I have recorded my mom till my last conversation with her, she is not here anymore, but I’ve kept her voice till our last conversation, so I have basically recorded my mom for 21 years.

So, how exactly do you experience sound?

I always see colors when I think of sounds, even when I am asked to do commercials. I will always ask them what their theme color is so I have a sound for that color. Every color in the way it’s painted or crafted has the same pattern in music because in order for something to exist it needs pattern. Music and creativity have a pattern of their own. A very good example for this is the project I did in Dorze in my first album, it was literally the pattern of their denguza (Welayeta Traditional Cloth) that inspired the music, and it is a mixture of black and red patterns.

So, the pattern on this attire is that when one color goes in, the other goes out, their song is the same way, so you can represent the color in different voicings and you have a pattern which is a harmony and the Dorze people are one of the most harmonious people and that is one of the things I learned from them.

Harmony is everything. It is embedded in their music, their day today life, culture; they know how to sing and be in sync within. That is how I see sound no different than pictures or any creative work.

What classes have you taken to master your craft?

Endless practice and my experiences were my lessons. I remember building my first studio with Abu-Walad biscuit box and Miyota DVD microphone when I was 13. I continued performing in class rooms and jamming, and I have also been listening to FM Addis 97.1 from the first day they opened. Eventually I started working there for three years later on in my life.

I think I was 10 or 11 when they started and from that moment on, my whole teenage time was spent listening to a lot of radio. Radio became a huge part of me, sound was everything because my experience is my mom’s voice but I started hearing her voice through other moms. Even when I travel and record, I know that tone, it has the same spirit.

A sound does not lie. That is why mostly my music is based on tone and notes. These are my inspiration when I make my music especially when I am trying to go deeper in the culture and get something out from it.

At what point did you start DJ’ing?

I started DJ’ing or I would say playing in mini media at the age of 15. I got introduced to computers at the same time and realized there is a thing called “software,” which allows me to record vocals and play with instruments that are already recorded, make patterns out of them and make music. So, I started doing that when I was 15.

What most people don’t understand is the reason my recordings are clear is because I’ve been recording for 21 years. I am more experienced than most people who are in my age group. I have been producing for 17 years now and I just turned thirty-two. So the reason why my production is this good and I am getting better every day is because I have been doing it for a long time. You have to understand that this recording, this clarity and this skill doesn’t come easily. You have to work on it and you really have to put your time.

When I turned 17, I actually started DJ’ing. I got introduced to a DJ mixer. I put out my first mixtape when I was 16, remixes of songs at that time, whether Amharic or English, I literally did what I used to do in the classroom and changed it into a record.

I already had recorded data in my head and the computer allowed me to turn that into a recording so I started DJ‘ing that music. It was a way to put my music out. It became the best platform for me instead of being a guitarist, a vocalist or anything else. DJ’ing was the first introduction for me to put my music out and then it goes on to working in Radio.

I used to play my mixtapes on the radio when I was 18, 19 or 20 and that gave me the platform to be famous. After that, I put out my second mixtape and then I continued producing even more, production has been there since I was 15 till now.

When I turned 21, I stopped putting out mixtapes after the third one because I wanted to do an album of my own. It took seven years of my life in the studio, worked day and night, 16 hours a day, every day, while DJ’ing at night and paying rent. That circle went on for seven years straight and then Netsebraq was born.

I went from 21 to 28 years old doing nothing but producing, learning how to write, learning to sing better, learning how to record, buying new better equipment, working on myself and my craft. It took everything out of me.

That is why Netsebraq sounds the way it does, it was crafted from scratch and I found a new sound for my generation the world has never heard of, a new sound for my country and for the industry and that took time.

I found myself in music, in a new way of writing, progression, of sounding, recording and all this took time. It was not just a project. Its impact can be seen through DJs coming into the mainstream, singers to find themselves. I hope I am not fooling myself when I say this but, I think Netsebraq proved to artist to be themselves and to sound like themselves. It brought free thinking to this industry but it didn’t happen overnight. It was something that was crafted for a long time.

When was the first time you Disk Jockeyed professionally?

I started doing my own Day Party’s after high school in college where I started throwing parties for people in my own age group and a lot of people came to my sessions. Back then, there was no platform you can use like Tik Tok so people just attended my parties using flyers and a lot of people showed up because of the mixtapes I used to release. At those parties’ attendees didn’t pay attention to the music, just how it made them feel, they don’t really understand the craft.

Out of the whole experience, what has been your favorite part?

Definitely my first album release party, because I had been working none stop before that and when reflection happened, I was famous in most cities as a DJ. I would go to Arba Minch and pack a place of 2000 people, as a DJ I was doing really well. I was making good money and had good exposure as well, especially on the last year before Netsebraq.

Netsebraq brought me to the stage as a singer, song-writer plus a DJ. The DJ part has been subtly following me. But my first album release party was a very special moment for me. It was three months after the album had dropped and the place was packed, people were at the gates lined-up because the place filled up early.

All of that happened within three months and it was very historic. An up-and-coming artist, who is a DJ, selling out a concert was not common; it was unheard of then. For me it was a moment I will never forget, because I remember the energy that night. I had never seen an energy like that in my life, that made me think to myself “oh wow, I have made it this far.” Seeing people sing along to songs that I wrote felt surreal, something I created spoke to them enough for them to know it by heart and that truly astounded me.

To answer the question, the release party truly stands out for me, especially when I was playing the piassa song. I remember time freezing, my friend and fellow DJ, who I grew up with, was back stage with tears in his eyes because of how amazing it was. We used to walk back home after DJ’ing because the first two years of my career, I didn’t have enough money to even pay for my taxi-fare home, so we walked to places instead. I dropped opportunities my family offered me to go to the US, I dropped out of Piloting school after completing almost everything, and I then joined computer school.

And were your family supportive through all this?

Well, my brother wanted me to go to Pilot School, he was ready to pay for it and arrange everything. I went and did everything, I didn’t think I would get in but then I ended up getting in. When I did, I went to my mom and told her that I made it in, that I could follow this path and that I didn’t think it was for me.

The only thing closer to music for me at that point was computers and I would rather go and study that. And she was very supportive, she said ok and that I should be careful. My family had always been supportive of my aspirations which I am forever grateful for.

I remember when I finally got the deal with Universal Records, the first thing I did was to tell my mom and record her in the process. She was always willing, she never turned me down. She was always there for me, had she said no to me backing out of pilot school back then, I would not be where I am today. Rophnan, as a musician would have never existed. I am forever indebted to them for that.

My father on the other hand used to always tell me “Whatever you do, sell it.” He never told me what to pursue or to stop music just that I should do what I love and whatever that is I should sell it. He raised all of us like that, if you love something learn how to sell it, so you’d learn to perfect it and love it even more. Selling it would give you the money, time and opportunity to grow it and polish it into something better.

If I never sold my first mix tape, even if my first salary was just 500 birr, I wouldn’t have had the resources to support my endeavors down the line. Money is money no matter how small it may seem; it will serve as a stepping stone. I am not saying to just do it for the money but you have to account for your time with something; gain something from it, no matter how small it may seem because your time is the most valuable thing you have.

You are currently amongst one of the top artists in the country, yet you are very private, not very active on traditional media but you’re also active on social media, why is that?

I wouldn’t say I am private, because I am always posting. People know what I eat, what the studio looks like, where I work out, when I’m working. If you ask an average person who follows me on social media what I do, they’ll tell you that “he eats healthy,” I go to gym at midnight.

But as for media, I usually don’t go out unto media because I don’t really have anything to say. I have been away from media for around two years now and that’s mostly because I didn’t believe I had anything substantial to say and I don’t want to come on and lie, so I chose not to say anything.

I am the kind of person who likes to understand people’s truth and delve in to it. I believe a lot of truth is subjective and I am open to hearing other people’s truth but I know that a lot of people don’t see it that way.

What I consider my truth might not be what people want to hear. So, if I were to come out on media and say what people want to hear and not my truth, it would be a lie. I never want to lie to my fans; that is disrespectful. I would rather communicate with my people through social media and show them what I hope would inspire them, show my craft and take them through my creative process. And when this album comes out, it wouldn’t be alien to them because they saw the work that went into it through my social media posts.

I would rather communicate through that because who am I to comment on things I don’t know and understand.

I know and understand that everyone also has their truth that they’re exposed to and I am nobody to negate or support that. Until we all find a common ground of saying I respect your truth as much as you respect mine, I don’t see the importance of going out in public and creating controversy instead of looking for a solution because we can see that nobody is listening to anybody anymore.

Everyone is looking for voices and opinions that confirm their truth instead of openly listening to everyone unbiased. So, of course I am private, because I have nothing to share that my fans don’t already know. I am just as confused as everybody else and if I can’t help, I would rather listen and try and learn about everyone’s pain and truth.

And to me, music helps me do that.

Interesting, steering a bit off topic, you’ve mentioned you regularly attend the gym at midnight, why do you do that?

For me, it’s more mental than physical, because I don’t want my studio to be the hardest thing that I do in my day. Because the hardest thing is always seen in comparison, the hardest part of your day is the most dreaded part no matter how much you love it.

To not lose the love, I thought I would create something more challenging for myself. Now for me, the studio will continue to be more exciting because it’s not as hard as getting up at midnight and going to the gym. Contrary to what most people would think being in the studio is very tiring. You sit there for hours and hours daily; the not knowing of what will come out of each session creates a lot of anxiety as well, so when I add the midnight gym on top of that, I would have a much harder thing to do, which pushes me to like the studio better.

I needed that push because I had to finish three albums in two and a half years. It took a lot out of me and not just me but it took a lot out of my management as well. To deliver three albums in this time frame was really hard. Normal working hours don’t quite cut it.

Back in the days, it was really hard for artists to make a living off of music but the tides are changing now and artists like you are making a difference in that. What do you think propelled that change from your part and your peers as well?

I know it is getting better comparatively but it is not on the trajectory it needs to be at. There are still artists that are not earning their fair share but I think YouTube democratized so many things. It gave the power to artists to some extent. What got better is not the payment but the exposure. Artists get to be discovered in a quicker, better way.

As for back in the day, if the person who worked at ‘hire treat’ did not like you personally no one would know your name. Now, we’re exposed to more artists because we have access on our own terms. Young artists have better platforms now and bigger exposure where their music gets the chance to be discovered by many.

For me personally, I am rooting for all of us. When I hear an artist getting paid a million birr or dollars for music, it makes me ecstatic whether I like the music or not. It makes me so happy because the industry is getting paid this much, which is a win for all of us. It would mean fewer artists who are unable to support themselves and their family through their craft.

At least they would set a standard of artists earning a good life. I think what is happening is there is the YouTube market that is supporting local artists. Even if the public isn’t directly paying for the music, they are exposed to it at least. There are platforms that would support artists even more like Awtar but people barely use them.

When people buy the music, the artists will directly benefit from that so I encourage listeners to get their music from platforms like that. I think that is the main market but for now, YouTube works wonders for the industry.

What are your thoughts on people saying Ethiopian music died after the golden age? Some might say today’s music is more diverse and the time for it is now. What is your input on that?

Whoever says the time for Ethiopian music is now, I just want to say that I appreciate you all. Because a lot of people discourage what the industry is right now, saying it could never amount to what it was back then. The way I see it, if you grow up listening to any type of music, even if it’s just whistling, you’re going to have an attachment to it because it would be nostalgic.

It is hard to compare today’s music to something that has been part of people’s memory for 40 plus years. There is a lot of memory attached to it that can’t be compared. It is like expecting a new born baby to win a race against a 40-year-old, if you were to give 20 more years to the new born they will definitely win against a 60-year-old.

So, if you give us time, we too will have that nostalgia factor that would make us amongst the classics in people’s mind. Every generation has a favorite and it mostly has to do with the memory attached to it. I think it has more to do with nostalgia rather than production, quality. The golden age music was well produced, very powerful and well written too but I don’t think they need to be compared with today’s music.

Today’s musicians are very creative. They too have things to say, they too are well written; the people making the comparison probably grew up with those songs and they might not understand today’s music. Not understanding something does not make it lesser.

Considering artists back then, even the greats, did not put out a lot of albums or singles when compared to today’s artists who put out music more often. Why do you think that is?

I think it was very hard to put out albums back then than these days. But artists suffer to put out albums these days as well. There are easier platforms to make and sell your music on but I think artists are still suffering in a sense that studios are not easy playgrounds to play on.

The industry still does not really pay creatives; studios, composers and writers are not paid the right way. So, until that day comes, don’t expect too much creativity because creativity is also run by the freedom of time that you can make music.

If I am not getting paid well, I’ll just do something to pay my rent. Something that is easier. That is why getting paid can make a difference. When I say this, people might automatically say in the 60s they were not paid but they did so many things, no they were hired by the government.

These writers were hired by the Ethiopian National Theatre, Ras theatre, Cinema Ethiopia, and all those bands in mazegaja were hired and they were workers who were paid a monthly salary especially during the time of Haile Selassie I. That’s their actual job. They were workers who went in at 2 o’clock and left at 8. Most of us are self-employed so that also has its own impact on what you’re going to do and what you’re going to deliver to the art because you can abuse that freedom as well.

In general, I don’t agree with the comparison and I don’t think it’s fair. My generation is putting out a lot of good stuff. Think about it, if you call your days the good days and things were so well in the 60s and everything was nice, then why you would expect better things from me then, while you understand I’m living in a worse time.

So, coming to the new album, you said earlier that you were into physics; does that have anything to do with the 3, 6, 9 and the universal numbers?

Yeah, I mean you have to understand the Orthodox Church has a big explanation over this because it has a lot of knowledge about the world and the universe and everything from ancient times, but also those teachings were spread throughout the world in different ways and one of the people who understood this in early times was tesla.

He brought this idea of these three numbers being the key to unlock the universe and to understand the whole thing. If you understand things from the perspective of frequency, vibration and energy, you’d understand the world in a much better perspective.

Instead of saying me, me, you will start to say us; instead of just boosting up your ego and saying, man is everything in this world. You will understand the relationship of man in the world. And then you will protect the world.

What I’m trying to put here is for my generation to see things from a bird’s eye view. Let me put it this way, everything that we use today, phones, computer, internet, technology, all these things that we kill each other for is made by the people who understood this, these higher understandings of the world. Because how can a person make a phone that can do miraculous things without understanding the world holistically. I think the perspective that we have about ourselves and the universe is distorted and that’s why we’re very tribal and biased.

The bottom line is, I think the understanding we have about ourselves and the world should change or should be in check.

So, what I try to do with this 3, 6, and 9 is to show people that there is a higher perspective of looking at yourself, the world, how it goes and how it functions. If you understand that, everything becomes lighter, everything becomes a shape that will be understandable by the next person.

The names are inspired from that. So, when people say, oh, it’s three, it’s six, it’s nine, it’s like you’re engaging with these numbers, raising curiosity amongst listeners to look into these numbers, which will hopefully raise a question in people’s head so that they can have a better understanding of the world.

It’s always much better to look at yourself within the world. What I mean by that is like, yes, you are you, but you are in the world so know the relationship you have with the world, and then you’ll have a healthy thought, instead of saying what did the world give me? You’ll understand and you’ll start to say, what did I give to the world, what are the things that I said this morning? Most of us we’re just living inside our head, we don’t really live.

How has the experience been with Universal Records?

Well, I’m learning a lot from how the world moves, how it works, how everything is intentional; intentional in a sense that the world is moving faster. It was like going from being a small fish in a tank into a small fish in an ocean, it’s so big and sometimes it’s challenging but exciting for the most part.

I’ve seen a lot of people working day and night to make things go the right way. For me, it starts from my management company, Dots, all the way to universal music Africa and the whole team who have worked tirelessly to make things go smoother for me. I am very thankful.

The one thing I’m most thankful for is getting to release 6 at this moment, because according to our deal with the record company, I wasn’t supposed to release it now but we demanded it because I felt my generation needed it. There are songs in the album I really want to put out at this moment because my generation needs it.

They’ve been willing to compromise on things for me and understand that I’m coming from a different side of the world that they never existed in. So, it’s been challenging for them and I can understand but they they’ve been nice to me, I feel like I’m in great hands to join the world.

Other artists like Aster and Gigi have signed to international companies and represented our country. Hopefully, I’ll be able to get to do that as well. I’m following in the footsteps of giants. I hope I deliver something worth a while. Honestly speaking, to join the international world has been a dream come true.

Do you still get to work on crafts that are still true to yourself?

Of course. They do not affect my craft, rather they just help. That’s what people don’t understand. People thought they’ll make me do things their way, if that was the case, I would have never signed anything.

They’re here because they loved what I do. So, why would they touch it? But they will help me delve in deeper. They want me to experiment in our cultural music more and they also allowed me to stay here. I’m still based here; I’m producing my music on our soil. I’m still intact with the people. I’m still a part of the community.

The future is exciting. I have a full control over my artistic freedom. They don’t bend my music into anything, they even provide me with more freedom and guide me through the lines, and present me with better opportunities.

What is the perspective of 6 and what does it mean?

Yeah. So 6 means a perspective of a six-year-old. When we were at that young and impressionable age, our intentions were clear and our ego was not built the way it is now. We were not stiff. We were eager to learn and we had a better understanding of the world.

I think in order to become a better generation, we have to learn how to become young and find our inner child. To tap into my inner child, I went to kids. I went to orphanages and just spent time with the kids, communicating with them, asking them to paint me stuff.

I’ll give them words and learn their perspective. For example, I’ll ask them for testify. Like, what do you think about the word testify? And they’ll just paint me stuff. Through the genius of my graphic designers Fanuel Leul and Tsegaw Tesfa, we were able to incorporate those paintings on the album art.

I also wanted for those six-year-olds to see themselves being represented, so that they can have better guts, that our traumas cannot hurt them, for them to have a thicker skin to say no to us, if we are ever to push our biases onto them.

I want my generation to be purposeful in not passing that trauma to the young. I am hopeful this would empower them both. We are alien to kids because our biases have molded us somehow. They don’t quite vibe with us that much. When they hear their voice in my album, they’re automatically engaged through the things that I say and to the songs that I put in there. It will eventually become theirs. So, when they grow up people will not manipulate them, the way we have been manipulated.

What can we expect going forward?

“9” is coming out in December and somewhere between then and now, we’re planning on having a festival celebrating all my music with fans.

It’s going to be a series of beautiful engaging events, and till then I hope everyone enjoys 6 and gets the message.

The TPLF is the enemy of Ethiopia and the people of Tigray point blank. The government says that it would make peace with the group but as Ethiopians we can’t forgive that party even if the government fulfils its diplomatic responsibilities. I did not say the people of Tigray, rather just TPLF.

The role of Ethiopia’s government should be identified; the election board should not be giving out certificates for parties that work with terrorists. If they get a certificate, then the TPLF would need one as well.

The country is on the precipice of prosperity now. Our current state could be depicted as a nine month pregnant women ready to give birth on any day. It is always darkest before dawn, Ethiopia’s people come together even stronger when there problems pile up.

We should be careful with parties that try and create the gap between ethnicities.

How can the government enforce a justice transition? What should be included?

Justice transition means the world did not get civilized through a revolution, but rather through reforms. Reform means averting the negative impacts and carrying on already started projects.

Justice transition implies those that refuse forgiveness and acceptance from the recently started national dialogue and the people that are being accused. Each one of the perpetrators will not be brought before court but instead will have to reconcile their differences in the regions customs, which is according to justice transition.

This is the outcome of the reforms. A new education law is now being drafted, in addition to changes to the education policy. These and other innovations in teacher education are greatly appreciated.

The Association applauds the improvements and supports the next developments.

In the last three years, for example, the panda bag arrived in Djibouti and stayed for more than a month, and we were required to pay tax. We would not pay that money if the Ethiopian government was facilitating faster. We occasionally lose bags or items in a warehouse where we keep the bags.

It’s pointless for me to go over what happened. It is all well known that we simply need to take our time and evaluate everything before coming up with a way to mediate it.

በብዛት ከተነበቡት

የቻይናው ድርጅት አደይ አበባ ስታዲየምን ለማጠናቀቅ የጠየቀው የዋጋ ማስተካከያ...

July 3, 2022

ከአማራ ክልል ወደ አዲስ አበባ የሚጓዙ በርካታ ሰዎች ወደ...

July 31, 2022

የአገር ውስጥ የፍራፍሬ ገበያን ፍላጎት ይሸፍናል የተባለለት የብላቴው እርሻ...

July 24, 2022

Ethiopian Reporter Political News

Officials at the Ministry of Agriculture are worried about the global fertilizer scarcity as the nation becomes unable to endure the increase in the price of the agriculture input owing to the conflict between the Ukraine and Russia.

The global fertilizer crunch continued as the country sees a growth in demand for fertilizer due to expansion of irrigation farms and new agriculture projects that prompt farmers to increasingly shift to artificial fertilizer with subsidized price.

“Demand is growing substantially as Meher farms expand and irrigation activities surges across the country,” said Umar Hussein, the Minister of Agriculture, in an event held at Skylight Hotel to honor stakeholders who have been involved in the timely delivery and distribution of fertilizer.

Last year, the price of fertilizer more than doubled in the international market, a situation that have bulged Ethiopia’s annual budget for the commodity from USD 600 million to USD 1.2 billion.

“The last year has been very challenging due to forex shortage and security concerns that have affected distribution,” Umar said.

This week, the World Bank warned that there would a further increase in price of fertilizer, with the rapid increase in gas prices turning into an increase in the cost of the commodity.

“The challenge is meeting the immediate demand for fertilizers to support next season’s crops. Current projections suggest that Africa’s unmet demand could reach four million metric tons this year, with West Africa facing the most acute challenges this growing season,” said World Bank Group President, David Malpass, during the opening of the 77th session of the UN General Assembly (UNGA 77) on Tuesday, 13 September 2022.

Last year, the Ministry had to float a tender more than twice as suppliers failed to fulfill contracts due to the global fertilizer crisis, which was first caused by the coronavirus pandemic and then worsened by the war between Russia and Ukraine, which supply over 50 percent of inputs needed to produce urea.

“Taking a lesson from last year, we are in contact with potential suppliers to avoid delays. Invitations have been already made,” said Sophia Kassa (PhD), State Minister for Investment and Input Sector at the ministry, told The Reporter.

During the last fiscal year, almost 13 million quintals of fertilizer was supplied by Fertiglobe, one of the largest producers of the nitrogen fertilizer in the Middle East, and Morroco OCP, a renowned supplier in Ethiopia, where it is currently building a fertilizer plant in partnership with the government.

The government expended a total of 64.5 billion birr for the procurement, shipment and distribution of fertilizer last year. It accounts for 11.4 percent of the budget during the same period.

The government had to allocate another 15 billion birr in subsidy as farmers become unable to withstand the surge in price of fertilize quadrupled in the local market.

Three directives on broadcast media go operational effective this month

The Ethiopian Media Authority enacts three directives to regulate the public, community, and commercial broadcast media. They are part of the eight directives the Authority has been issuing since the ratification of the media proclamation in April 2021.

To be applicable beginning this month, the directives list the rights and responsibilities, and how licenses are granted for the public, community, and commercial broadcasting media. The directives rule on how television and radio media should conduct their reports during national occasions like elections.

Lists of administrative measures by the Authority as well as legal actions have also been stated. Beginning from warnings to suspension of licenses and legal actions, several measures would follow should the media houses engage in illegal activities.

One of the actions, as it was the practice before, was to prohibit the dissemination of a program considered to be a danger to national security before going public on any of the broadcast media.

On the issue of impounding and injunctions, article 45 of the proclamation states that prosecutors might request a court order to stop publication of the programs. In the event of an emergency, the broadcast of the programs will be called off with the order of the Ministry of Justice. This should be notified to the court of law within 48 hours.

The Authority also prepared and approved several other directives to govern the media landscape in Ethiopia. These include directives for religious broadcasting services, online media, and print media.

Following the approval of the religion broadcasting service directive, which forced the registration of religious-based media, several of them have been registered.

Among the 46 media outlets that started the process and are working with the Authority to finalize registration, 23 have received their licenses, according to Dessie Kefale, communications director at the Authority.

“There was a deadline on which all had begun the registration process. Some of them were already operational for a long time, of course,” he said.

Before the ratification of the proclamation, as Dessie explained, there had not been adequate legal frameworks for all kinds of media houses.

All the directives and regulations before last year’s proclamation were based on the Mass Media and Access to Information issued in 2008, and Broadcasting Service Proclamations issued a year before that.

“There are several other laws under discussion and preparation, which includes a directive on hate speech and misinformation,” Dessie told The Reporter.

It is the “largest pandemic fraud” in the US

Ethiopians are among 47 people who have been charged in connection with a fraud scheme in the US involving Feeding Our Future. The alleged fraud is said to be the largest pandemic fraud in the country, involving USD 250 million.

The defendants are charged across six separate indictments with charges of conspiracy, wire fraud, money laundering, and bribery. The defendants are suspected of creating dozens of shell companies to enroll in the program as Federal Child Nutrition Program sites, while allegedly creating shell companies to receive and launder the proceeds of their fraudulent scheme.

The defendants submitted false invoices purporting to document the purchase of food to be served to children at the sites and submitted fake attendance rosters purporting to list the names and ages of the children receiving meals at the sites each day, according to the US Department of Justice.

“These indictments, alleging the largest pandemic relief fraud scheme charged to date, underscore the Department of Justice’s sustained commitment to combating pandemic fraud and holding accountable those who perpetrate it,” said Attorney General Merrick B. Garland. “In partnership with agencies across the government, the Justice Department will continue to bring to justice those who have exploited the pandemic for personal gain and stolen from American taxpayers.”

Feeding Our Future’s founder and executive director, Aimee Bock, was among those indicted. She is charged with conspiracy to commit wire fraud, conspiracy to commit federal program bribery, and federal program bribery. She oversaw the USD 240 million fraud scheme carried out by sites under Feeding Our Future’s sponsorship, according to the US Department of Attorney.

An Ethiopian born Abdikerm Abdelahi Eidleh, 39, of Burnsville, Minnesota, is charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit federal program bribery, and money laundering. Eidleh was an employee of Feeding Our Future who solicited and allegedly received bribes and kickbacks from individuals and sites under the sponsorship of Feeding Our Future. Eidleh also created his own alleged fraudulent sites.

Ethiopian born-US nationals, Bekam Addissu, 39, Hadith Yusuf, 34, and Hanna Marekegn, 40, are each charged with one count of conspiracy to commit wire fraud. Another six siblings who are originally from Ethiopia have also been charged with wire fraud, federal programs bribery, conspiracy to commit money laundering, and money laundering.

Another Ethiopian-born US national, Liban Yasin Alishire, 42, the president and owner of Community Enhancement Services Inc., a company located in the JigJiga Business Center in Minneapolis, is charged with receiving more than USD 1.6 million in fraudulent Federal Child Nutrition Program funds. Ahmed Yasin and Khedir Jigre have also been charged with conspiracy to commit wire fraud and money laundering in the same center. These three defendants have been accused of buying properties, including beach property, in Kenya.

Another defendant with links to Kenya, Salim Ahmed Said, 33, of Plymouth, Minnesota, is charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit federal program bribery, federal program bribery, conspiracy to commit money laundering, and money laundering. Said was the owner and operator of Safari Restaurant, a site that received more than USD 16 million in fraudulent Federal Child Nutrition Program funds, the US Department of Justice said.

“An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law,” the department said.

A startling revelation regarding the war in northern Ethiopia was announced last week by the International Commission of Human Rights Experts on Ethiopia, an independent organization tasked by the UN Human Rights Council with conducting a thorough and impartial investigation in Ethiopia. The stern warning emerged after the organization released a study that stated there are reasonable grounds to believe that parties to the conflict had violated and/or abused human rights since combat began in November 2020.

It was a report that not only angered federal government officials but also countries and experts that had already questioned the mission and real interests of the recently formed committee of experts.

“The report of the commission is prepared in defiance of the UN best practice guidelines such as professional independence, impartiality, and standard of proof,” said Tadesse Kassa (PhD), secretariat of the inter-ministerial taskforce that was formed by Prime Minister Abiy Ahmed, slamming the UN Commission of Human Rights Experts report of human rights violations in the northern Ethiopia war.

At a press conference held on September 21, 2022, he referred to the Commission’s initial report, which was created with only two full-time human rights investigators and remote interviews, as nothing more than mediocre. At the press conference, the Ministry of Justice unveiled the task force’s first phase report, which was prepared by 158 experts deployed in the conflict-affected Amhara and Afar regions.

In its first phase investigation report, which covers violations committed by the Tigray People’s Liberation Front (TPLF), the inter-ministerial taskforce (IMTF), formed to implement the recommendations of a joint investigation by the Ethiopian Human Rights Commission (EHRC) and the UN Office of the High Commissioner for Human Rights (OHCHR), presented its findings.

The Task Force found reasonable grounds to believe the commission’s findings that there were 2212 rapes, 2831 extrajudicial executions of civilians, and other violations during the war. According to its 46-page report, the team came to this conclusion after analyzing the testimonies of 10,000 witnesses and analyzing thousands of videos and material evidence.

For Tadesse, who has been monitoring the task force’s research and report-writing process, the UN Commission of Human Rights Experts’ report on Ethiopia is only a “snippet” of the full extent of the damage that has been inflicted throughout all three regions.

“The report’s conclusions are presented on the basis of either no evidence or evidence whose credibility is highly questionable,” the secretariat told the room full of reporters questioning the report in regard to its standard of proof and data collection. Tadesse even went on to call the report “a political statement” that was prepared to “help implement” the agendas of “some forces.”

This week, the commission accused all combatants in the conflict of committing various human rights crimes. In order to reach the conclusion that there are “reasonable grounds” to suspect that the offenses amounted to war crimes and crimes against humanity, the Commission listed incidents that it employed as a basis.

The selected incidents were the shelling of Mekelle and attacks on civilians and civilian objects; killings in Kobo and Chenna; and a drone strike on an Internally Displaced Persons (IDP) camp in Dedebit. Rape and sexual violence, and denial and obstruction of humanitarian access were also selected themes for the investigation.

The commission’s two-month investigation into selected incidents and themes found “reasonable grounds” to believe the Ethiopian National Defense Force (ENDF), Tigray forces, and Eritrean Defense Force (EDF) committed war crimes, according to the report. In this case, the report accused the ENDF of using “starvation of civilians as a method of warfare.”

It further stated that it found “reasonable grounds” to believe extrajudicial killings, rapes, and sexual violence were committed by ENDF members “as part of a widespread attack” directed against “the civilian population of Tigray.”

The accusations were part of a joint investigation by the Ethiopian Human Rights Commission (EHRC) and the UN Office of the High Commissioner for Human Rights (OHCHR) that was adopted by the federal government.

The federal government, on the other hand, blasted the commission’s report, adding that it had opposed its formation from the start. It described the report as “substandard quality” and its allegations as “unsubstantiated.”

“It makes grave accusations against the government and its armed forces without offering proof, just based on telephone conversations and web-based submissions. This is irresponsible,” Zenebe Kebede (Amb.), the Permanent Representative of Ethiopia, told Federico Villegas, Human Rights Council president, at the Interactive Dialogue with the commission on September 22, 2022, in Geneva, Switzerland.

As the commission was not allowed to go to the war-affected areas of northern Ethiopia to investigate by the federal government, all the 185 interviews with victims, survivors, witnesses, and other key interlocutors were conducted remotely, it said. Even the governments of Sudan and Djibouti haven’t granted the Commission access to interview Ethiopian refugees within their borders.

Authorities in Benishangul Gumuz Region are preparing a conflict recovery project that would need a 38.5 billion birr budget to be implemented. It is an initiative that arose as the security situation improving.

The plan is expected to be implemented in five years in three phases, with execution scheduled to begin next month.

The region’s sectoral bureaus will start adapting the plan and mobilizing resources based on their needs. The region is drafting a directive that will guide resource mobilization.

The required budget for the recovery plan is nearly six times the region’s 6.7 billion birr budget for the 2022/23 fiscal year.

“Non-governmental organizations and UN agencies have already expressed their interest in supporting the initiative,” Tarekegn Tasisa, the region’s disaster risk management commissioner, said.

The recovery and rehabilitation project, based on a study prepared by the region’s disaster risk management commission, will be implemented in the region’s 17 districts in the Metekel, Kamashi, and Asosa zones. The plan outlined a list of main activities that would be carried out in six sectors, including disaster risk management, agriculture and natural resources, health protection, and education.

The study for the plan was conducted using the regional government’s root-level apparatus. They have identified the extent of the damage, and the commission compiled it, according to the Tarekegn.

Besides the study carried out by the commission, another study is also being prepared led by Assosa University. The university’s study estimated that the region sustained 79.4 billion birr damage due to the conflicts in the past years.

The conflict has resulted in the loss of 16 million quintals of crop, valued at 44 billion birr, according to the study.

“The university’s study has already been presented to the regional government, but it’s not finalized yet. That’s why we are using what we studied. Ours is already ratified by the recovery steering committee,” the commissioner said.

Officials say the security situation in the region is improving now. The number of civilians killed in the past five months is at its lowest.

The region has been a place of horrific civilian killings and conflicts between government security forces and Gumuz rebels since 2019. While the Metekel and Kamashi zones are the main fighting grounds for the rebels, Metekel zone has seen killings targeted at ethnic Amharas.

Even though the region is rich in gold and coal mining resources, investors are not able to mine the reserves, especially in the Kamashi zone. The region ranked second in the country in terms of gold production, with artisans producing more than 90 percent of the region’s gold.

475,384 residents are displaced from their villages due to the insecurity in the region, of which 77,500 are children under the age of five, and 20,000 are breastfeeding mothers, according to the conflict impact assessment. The conflict is also a reason for the destruction of 43,640 houses.

The region, which has been witnessing conflict and the killing of innocent people in various places, saw 113,000 students are out of school due to instability. The destruction of schools has created a difficult situation for students to return to school. In the conflict-affected areas of the region, 201 schools were completely destroyed and 86 schools suffered partial damage.

The region’s 142 health facilities, including 126 health posts, have also sustained damage due to conflicts.

Benishangul Gumuz, which provides agricultural land to investors who engage in large scale farms, has had its 109 agricultural institutions’ warehouses looted and partially or completely destroyed.

The study showed that 291 farmer training institutes and 140 animal health facilities met the same fate.

The recovery and rehabilitation plan has prioritized the implementation of the return of internally displaced people and the rehabilitation of those people in their former homes in a sustainable manner. It also focuses on rebuilding social and economic institutions and providing the necessary equipment for the institutions.

The project need assessment showed that 38.5 billion birr will be needed to implement the plan in disaster risk management, agriculture and natural resources, health protection, education, water irrigation and energy resource development, women, children, and youth sectors, as well as peace building and security sectors.

“The cost of the recovery budget is so much higher than the region’s capacity. But we are planning to mobilize resources from diaspora communities that are from the region,” Tarekegn stated.

Funds from donors including the federal government and the World Bank recovery project are expected to be part of this project.

The Benishangul Gumuz region is one of the six regions, including Tigray, Amhara, and Afar, where rehabilitation project was launched by the federal government together with the World Bank this year. In May 2022, the bank signed a USD 300 million grant to assist the reconstruction, and the federal government has allocated 20 billion birr in the current fiscal year for reconstruction.

In areas that have security threats, the project will be implemented by a third party. The Ministry of Finance has delegated United Nations Office for Project Services (UNOPS) to implement the reconstruction in the Tigray region.

The Ministers of Health and Education studied the damage in all six regions and prepared a report detailing the cost of the five-year reconstruction project.

The Ministry of Education stated that USD 96.5 million is needed to recover from the damage to schools in the Benishangul Gumuz region, while the Ministry of Health stated that USD 22.35 million is needed to recover from the damage in the health sector of the region.

However, the question of equitable distribution of wealth is being raised in the reconstruction project of the federal government. The Boro Democratic Party, which shared power in the region’s government, blamed the federal government for not paying enough attention to reconstruction.

In a statement issued by the party a month ago, the party urged the federal government to pay attention and allocate resources to the replanting zone in the same way that attention and resources are allocated to the destruction and displacement of citizens in northern Ethiopia.

Yohannes Tesema, the party’s Political Sector head, believes the government is not giving enough attention to the recovery as much as it gives to the Amhara and Afar regions.

He claims that out of the USD 300 million granted by the World Bank, the amount of funds allocated for the Benishangul Gumuz region is small.

It says there is no military solution to this conflict

The US Department of State called on “Eritrea and others to cease fueling” the conflict in Ethiopia and urged Eritrea to withdraw its forces from Ethiopian borders. The department accused Eritrea of increasing tensions throughout the Horn of Africa region.

The US also called on “both the Government of Ethiopia and the Tigray regional authorities to halt immediately their military offensives and pursue a negotiated settlement through peace talks under the auspices of the African Union.”

At a press briefing on September 15, 2022, Ned Price, spokesperson of the US Department of State, stated that Ethiopia should look for a non-military solution to the conflict.

“We are increasingly concerned by the growing military activity in northern Ethiopia. We strongly condemn the resumption of hostilities. There is no military solution to this conflict. These actions are inconsistent with the government of Ethiopia and Tigrayan regional authorities’ stated willingness to go to talks,” Price said.

The US special envoy to the Horn of Africa, Mike Hammer, who is in Ethiopia over the week and canceled his expected press brief on Friday, is also advancing a similar position to secure a peaceful resolution to the third wave of war that resumed in Ethiopia on August 24, 2022.

The special envoy is reportedly making efforts to bring warring parties to the table, while Olusegun Obasanjo, the designated AU official to broker peace in Ethiopia, has been silent since the third wave of war broke out.

Both optimism and worry dominated the just-ended Ethiopian year. A year that began with aspirations for wider peace and stability in the nation ended with the resumption of another deadly conflict. In a war with no apparent end in sight, thousands of people are still dying in the highlands. The economy is still in a difficult situation after recovering a little in the last Ethiopian year, on the top of the stockpiled macroeconomic problems.

It was such a challenging year. In the last year, more than the year before, the effects of the one-year-old conflict was felt. This is especially true in terms of the economy. The cost of living remains high despite recent indications that inflation is slowing down nationwide.

“The government found it difficult to contain inflation and in the third quarter of the past fiscal year started to slow down the pace of depreciation of the national currency. Maybe this contributed to stabilize the inflation rate somewhat but it may also have contributed to foreign exchange shortage in the economy,” Patrick Heinisch, an economist said.

Some conflict-affected areas are experiencing a more than 1000 percent increase in commodity prices as a result of severe supply shortages. It is still a problem in the country’s north, particularly in Agew Zone, Tigray Region, and parts of Afar Region.

“Up until the resumption of the war, I was sending money to my family living in Tigray, paying 30 birr for every 100 birr I transfer,” said Kirubel, whose last name is withheld for security reasons. “For obvious reason, this is not something normal in a country with a sound economic condition.”

Kirbuel’s story is actually the tip of the iceberg. Just two months after the previous Ethiopian year began, Ahmed Shide, the Minister of Finance, was among the first to voice concerns about the status of the economy. In the same broadcasted speech on the state broadcaster in November 2021, his comrade Yinager Dessie, the governor of the National Bank of Ethiopia (NBE), did not conceal the fact that the economy was poised to collapse because of the war.

It didn’t take long for Prime Minister Abiy Ahmed (PhD) to react. While also paving the way for a negotiated settlement with the warring party in the North, the Tigray People’s Liberation Front (TPLF), which the Parliament designated as a terrorist organization, his administration declared a humanitarian truce. Humanitarian organizations had relatively easier access to provide food supplies to people in the war-torn region.

First, some progress was made in the effort to bring about peace. The economy showed signs of improvement, and the IMF, which had previously included Ethiopia on its list of nations with unpredictable and unstable economies, predicted that it would rebound. Soon after the ceasefire in North Ethiopia, the other Bretton Woods organization, the World Bank, similarly predicted Ethiopia’s economy would revive.

Though such encouraging developments helped the government rebuild its ties with the West and western financial institutions, they did little to prevent the country’s fundamental problem—the shortage of foreign currency. From approximately USD two billion to barely USD 290.7 million in loans, development partners and lenders cut their commitments.

The net inflow of external debt was negative USD 551 million, indicating that the amount of creditor loans disbursed was less than the principal amount of debt the government was servicing.

Businesses have also faced a financial crisis due to the forex shortage, a situation that has plagued them for decades, though some found last year to be their most difficult ever.

More than any other businesses, those involved in the water bottling industry felt the pinch. Twenty water bottlers had to shut down because they were no longer able to run their businesses due to a lack of inputs, and they had even reached a point where they were unable to pay their employees’ salaries.

Overall, access to foreign currency remains challenging for businesses. At the end of 2021, foreign exchange reserves stood at USD 1.6 billion, or 1.3 months’ worth of imports of goods and services.

The authorities tightened foreign exchange regulations numerous times over the previous fiscal year in response to the shortage, upping the percentage of foreign exchange companies’ must surrendered to the government (central bank) to 70 percent. Even exporters had to deal with the shortage because the restriction prevented them from using more than 20 percent of the foreign exchange they had earned.

Another major economic burden that persisted in the country last year was the widening budget deficit, made worse by the war in the North, which increased spending for military. The budget deficit widened and is now expected to exceed 300 billion birr this year, which is more than twice what it was in the just-ended fiscal year. These difficulties compelled the government to take desperate decisions, such as freezing loans or introducing new taxes, in an effort to increase revenue and narrow the mounting deficit.

However, not every problem can be solved.

For many workers in industrial parks, the suspension of Ethiopia from the African Growth Opportunity Act (AGOA), a trade benefit granted by the US to developing countries so they may export their goods without paying an import duty, has been a bad news.

Due to significant layoffs brought on by the suspension, more than five factories have left the park, and over 5,000 workers have lost their jobs as a result.

“The year has been tough for all workers in Ethiopia. From the inflationary pressure to the war that has made many jobless, they have been in a pickle. Some had to live in poverty since their salary is not enough to cover expenses,” said Kasahun Follo, president of Confederation of Ethiopian Trade Union (CETU), urging employers to consider the challenges and make adjustments in the coming New Year.

Although the amount of jobs created by industrial parks is relatively low compared to the agricultural sector, the country had planned to industrialize. For Heinisch, these efforts are now being thwarted.

“Worryingly, since 2019 the share of the industrial sector in GDP has actually decreased. The trend is likely to have continued in the past fiscal year,” he said.

Despite the difficulties last year, industries did well.

The export of industrial items reached a record-high USD 500 million in exports during the previous fiscal year. However, this is negligible in light of the development in the coffee industry, which generated USD 1.4 billion in revenue during the previous fiscal year. It is a success that has helped officials to record the nation’s record-high exports revenue, which exceeded the USD four billion mark during the previous fiscal year.

Despite some progresses, however, the overall economic condition seems to be in worst shape, according to economists.

“We have undertaken a study and discovered that the economy is not in a stable condition, which is indicated by the unpredictability of the exchange market, the fiscal policy and the forex market, adding to global-wide problems,” said Tewodros Mekonnen (PhD), an economist and a policy analyst.

Another economist, Mengistu Ketema (Prof.), also believes the economy had not been in a good condition last year.

“Inflation was growing, above 30 percent throughout the year. External debt are maturing, thus forcing the country to allocate more budget for debt servicing. The drought in the south also worsened the already tense situation. And when you add all these to the global economic challenges, including the war in Ukraine, it indicates the economy is between a rock and a hard place,” Mengistu said.

For Heinisch, who believes Ethiopia did not experience a “post-COVID” recovery in 2021/2022 as many other countries did, the outlook is more benign, assuming that the war that has broken out again will come to an end quickly and the country can focus on its economic reforms again. “Debt restructuring could free up resources that the country needs for reconstruction but also new investment projects. So there is still reason for hope,” Heinisch concluded.

Both optimism and worry dominated the just-ended Ethiopian year. A year that began with aspirations for wider peace and stability in the nation ended with the resumption of another deadly conflict. In a war with no apparent end in sight, thousands of people are still dying in the highlands. The economy is still in a difficult situation after recovering a little in the last Ethiopian year, on the top of the stockpiled macroeconomic problems.

It was such a challenging year. In the last year, more than the year before, the effects of the one-year-old conflict was felt. This is especially true in terms of the economy. The cost of living remains high despite recent indications that inflation is slowing down nationwide.

“The government found it difficult to contain inflation and in the third quarter of the past fiscal year started to slow down the pace of depreciation of the national currency. Maybe this contributed to stabilize the inflation rate somewhat but it may also have contributed to foreign exchange shortage in the economy,” Patrick Heinisch, an economist said.

Some conflict-affected areas are experiencing a more than 1000 percent increase in commodity prices as a result of severe supply shortages. It is still a problem in the country’s north, particularly in Agew Zone, Tigray Region, and parts of Afar Region.

“Up until the resumption of the war, I was sending money to my family living in Tigray, paying 30 birr for every 100 birr I transfer,” said Kirubel, whose last name is withheld for security reasons. “For obvious reason, this is not something normal in a country with a sound economic condition.”

Kirbuel’s story is actually the tip of the iceberg. Just two months after the previous Ethiopian year began, Ahmed Shide, the Minister of Finance, was among the first to voice concerns about the status of the economy. In the same broadcasted speech on the state broadcaster in November 2021, his comrade Yinager Dessie, the governor of the National Bank of Ethiopia (NBE), did not conceal the fact that the economy was poised to collapse because of the war.

It didn’t take long for Prime Minister Abiy Ahmed (PhD) to react. While also paving the way for a negotiated settlement with the warring party in the North, the Tigray People’s Liberation Front (TPLF), which the Parliament designated as a terrorist organization, his administration declared a humanitarian truce. Humanitarian organizations had relatively easier access to provide food supplies to people in the war-torn region.

First, some progress was made in the effort to bring about peace. The economy showed signs of improvement, and the IMF, which had previously included Ethiopia on its list of nations with unpredictable and unstable economies, predicted that it would rebound. Soon after the ceasefire in North Ethiopia, the other Bretton Woods organization, the World Bank, similarly predicted Ethiopia’s economy would revive.

Though such encouraging developments helped the government rebuild its ties with the West and western financial institutions, they did little to prevent the country’s fundamental problem—the shortage of foreign currency. From approximately USD two billion to barely USD 290.7 million in loans, development partners and lenders cut their commitments.

The net inflow of external debt was negative USD 551 million, indicating that the amount of creditor loans disbursed was less than the principal amount of debt the government was servicing.

Businesses have also faced a financial crisis due to the forex shortage, a situation that has plagued them for decades, though some found last year to be their most difficult ever.

More than any other businesses, those involved in the water bottling industry felt the pinch. Twenty water bottlers had to shut down because they were no longer able to run their businesses due to a lack of inputs, and they had even reached a point where they were unable to pay their employees’ salaries.

Overall, access to foreign currency remains challenging for businesses. At the end of 2021, foreign exchange reserves stood at USD 1.6 billion, or 1.3 months’ worth of imports of goods and services.

The authorities tightened foreign exchange regulations numerous times over the previous fiscal year in response to the shortage, upping the percentage of foreign exchange companies’ must surrendered to the government (central bank) to 70 percent. Even exporters had to deal with the shortage because the restriction prevented them from using more than 20 percent of the foreign exchange they had earned.

Another major economic burden that persisted in the country last year was the widening budget deficit, made worse by the war in the North, which increased spending for military. The budget deficit widened and is now expected to exceed 300 billion birr this year, which is more than twice what it was in the just-ended fiscal year. These difficulties compelled the government to take desperate decisions, such as freezing loans or introducing new taxes, in an effort to increase revenue and narrow the mounting deficit.

However, not every problem can be solved.

For many workers in industrial parks, the suspension of Ethiopia from the African Growth Opportunity Act (AGOA), a trade benefit granted by the US to developing countries so they may export their goods without paying an import duty, has been a bad news.

Due to significant layoffs brought on by the suspension, more than five factories have left the park, and over 5,000 workers have lost their jobs as a result.

“The year has been tough for all workers in Ethiopia. From the inflationary pressure to the war that has made many jobless, they have been in a pickle. Some had to live in poverty since their salary is not enough to cover expenses,” said Kasahun Follo, president of Confederation of Ethiopian Trade Union (CETU), urging employers to consider the challenges and make adjustments in the coming New Year.

Although the amount of jobs created by industrial parks is relatively low compared to the agricultural sector, the country had planned to industrialize. For Heinisch, these efforts are now being thwarted.

“Worryingly, since 2019 the share of the industrial sector in GDP has actually decreased. The trend is likely to have continued in the past fiscal year,” he said.

Despite the difficulties last year, industries did well.

The export of industrial items reached a record-high USD 500 million in exports during the previous fiscal year. However, this is negligible in light of the development in the coffee industry, which generated USD 1.4 billion in revenue during the previous fiscal year. It is a success that has helped officials to record the nation’s record-high exports revenue, which exceeded the USD four billion mark during the previous fiscal year.

Despite some progresses, however, the overall economic condition seems to be in worst shape, according to economists.

“We have undertaken a study and discovered that the economy is not in a stable condition, which is indicated by the unpredictability of the exchange market, the fiscal policy and the forex market, adding to global-wide problems,” said Tewodros Mekonnen (PhD), an economist and a policy analyst.

Another economist, Mengistu Ketema (Prof.), also believes the economy had not been in a good condition last year.

“Inflation was growing, above 30 percent throughout the year. External debt are maturing, thus forcing the country to allocate more budget for debt servicing. The drought in the south also worsened the already tense situation. And when you add all these to the global economic challenges, including the war in Ukraine, it indicates the economy is between a rock and a hard place,” Mengistu said.

For Heinisch, who believes Ethiopia did not experience a “post-COVID” recovery in 2021/2022 as many other countries did, the outlook is more benign, assuming that the war that has broken out again will come to an end quickly and the country can focus on its economic reforms again. “Debt restructuring could free up resources that the country needs for reconstruction but also new investment projects. So there is still reason for hope,” Heinisch concluded.

The envoy is wrapping up two weeks in the Horn region.

“He remained actively engaged with the Government of Ethiopia, with the Tigray regional authorities, with the African Union, and with international partners to seek to advance an important effort to bring peace. He met on September 12 with the AU’s high representative, Obasanjo,” stated Price.

On September 16, 2022, the US embassy in Addis Ababa also stated that Hammer held productive meetings with Ethiopian government officials, civil society representatives, the African Union, and international partners.

Moussa Faki, the AUC chairperson, who extended Obasanjo’s mandate on September 10, 2022 to continue engaging with warring parties in Ethiopia, also met with Hammer on the next day. On the other hand, the UN Security Council, which was set to discuss the situation in Ethiopia, was postponed.

The five months of ceasefire and humanitarian assistance to Tigray were shattered when the third wave of war broke out on August 24, 2022. The ongoing peace initiative under the AU umbrella hit a deadlock, which the special envoy is trying to reactivate.

The Tigray regional government, which has been refuting AU-led peace negotiations prior to the latest war, also issued a statement on September 11, 2022, agreeing to negotiate under the AU umbrella.

Nonetheless, reaching a ceasefire agreement and resuming the peace talks remains farfetched, worsening the humanitarian crisis, as Eritrean forces are reportedly drawn into the war and regionalizing the conflict.

“These actions are worsening the humanitarian situation at a time of pronounced drought and food insecurity,” stated Price.

He called on the government of Ethiopia, Tigrayan authorities, and all parties to allow the unhindered delivery of humanitarian relief.

“Humanitarian assistance should not be used for military purposes—it should be used to save lives. And we urge the parties to cease the fighting and to begin talks under the auspices of the AU as soon as possible. Peace needs to be given a chance. Too many people have died, and too many more are suffering,” he added.

“Our region doesn’t have the capacity to mobilize this amount of budget for the recovery. It definitely needs the federal government’s support more than this,” he asserted.

The commission’s requests to various UN entities operating in Ethiopia to share documents and materials of interest were largely deflected, or responded to after an inordinate delay. Its request to access the internal database of the joint investigation team was also delayed.

“Despite these challenges, the Commission is confident that its findings are supported by information that satisfies the standard of proof for UN investigations,” the report reads.

The commission’s recommendation, which asks the UN Security Council (UNSC) to include the war in northern Ethiopia on its agenda for the 14th time since December 2020, worries the Ethiopian government more than the report’s findings and conclusions do.

In order to stop further violations and abuses of international human rights law and humanitarian laws, it also calls on the council to take action targeted at restoring peace, stability, and security in the area. During a session held this week, officials of the federal government have already expressed their resentment at the recommendation of the commission.

“The Commission’s political pronouncements referring to the UN Security Council are ultra-virulent and betray political motivations that go beyond human rights,” Zenebe said.

It is a sentiment shared by countries that are members of the Human Rights Council.

“The Commission went beyond its mandate and made a statement on things that were not in its remit,” said Konan François, a representative of Côte d’Ivoire on behalf of a group of African States.

Wondemagegn Tadesse (PhD), an international human rights lecturer at Addis Ababa University, believes there are three options in which the UN Human Rights Council can decide to approve the commission’s report and recommendations. The first option is to end the matter within the council itself.

“In this case, there will be nothing more to do than call on the warring parties in the country to implement these recommendations,” Wondemagegn explained.

The second option is to refer the matter to the UN General Assembly. “However, since the assembly gathers over a long period of time, it may not have a big impact on Ethiopia,” he added.

Apart from that, even if it is presented to the General Assembly, its voting system does not have veto power, so there is a high possibility that it will not be approved. A large number of developing countries at the General Assembly will not vote in favor of the resolution as they consider such decisions as interference, according to Wondemagegn. Moreover, experience so far shows that if the country in which the decision is made does not accept the decision, the chances of its implementation are low.

However, if issues are referred to the UNSC, the third option may take a different path than the two options.

“The Security Council is the only institution that has the power to take military action among the UN institutions, but as we always see, the proposal to the Council is overturned by the veto power, so it does not make a difference,” Wendmagegn asserted.

In the past two years, the council has not passed any decisions on Ethiopia. The war in northern Ethiopia and the Great Ethiopian Renaissance Dam have been on the agenda tabled before its members for discussion. When a resolution was proposed, China and Russia, who have veto power, supported Ethiopia.

For Wondemagegn, even if the Security Council passes a resolution, it is difficult to implement it. If the Council decides to send troops to stop human rights abuses, there may not be many countries to contribute troops to a country as large as Ethiopia.

“Even if countries contribute soldiers and send them to Ethiopia, they will have to fight a war with Ethiopia because the Ethiopian government will not accept the decision. No one wants this,” he said.

Another human rights expert, who asked not to be named, explained that even if the UN Human Rights Council does not pass any decision as a result of this report, countries that want to take unilateral action can use it as a cause for their measures.

“Those like the US and the EU may use the report to suspend loans and impose sanctions,” the expert said, adding, “but this would only hurt the people affected by the war more.”

The Ethiopian Human Rights Commission also agrees with this idea.

“Decisions should be made to reward the people affected by the war and bring reconciliation, not where parties with differences of opinion are dragged into a corner,” said the Deputy Chief Commissioner for Human Rights, Rakeb Melesel, while underscoring that EHRC is ready to share its database if the Commission is willing to undertake another investigation.

The Ethiopian government is exerting pressure to block any attempts by the Commission to extend its mandate. “The Council should reject the report and oppose any attempt to extend the mandate of this Commission beyond December 2022,” the government emphasized.

Farmers reject the much-anticipated Bt cotton.

Cotton growers in Ethiopia resort to unauthorized GMO cotton illegally smuggled from Sudan. Bt-RR cotton seed is currently being cultivated in Afar, Metema, Benishangul Gumuz and Gambella regions after being smuggled via Metema, Humera and other border areas between Sudan and Ethiopia.

Once the first generation of open-pollinated (OT) is acquired, it can be sown for between three and five years, after which the seed cannot be recycled. Ethiopian cotton farmers are currently buying the smuggled cotton seeds and multiplying them locally at 10,000 birr to 13,000 birr per quintal.

Bt-RR originated in Brazil, and was largely cultivated in Sudan. Most other GM cotton seeds are non-OT, which means they cannot be used after the first year. As a result, the farmer has to buy the seed every year.

The cotton farmers The Reporter talked to underlined that the smuggled cotton seed is preferred mainly because it resists bollworm, which has been devastating the existing local cotton breeds. This is because a one-time chemical spray on the vegetation is also highly effective in eliminating all weeds except the cotton itself.

The productivity of the Bt-RR is between 10 and 14 quintals per hectare, slightly superior to the local varieties. But the Bt-RR is advantageous mainly because it beats the bollworm, and requires less pesticide.

“A number of farmers are now multiplying the Bt-RR seed and selling it to cotton farmers across the country. The farmer liked the seed, instead of the local existing varieties and the GM cotton approved by the government,” said a manager of a large-scale cotton farming company. He cultivated the new seed on 200 hectares in Amhara regional state.

Melkamu Telake, board chair of the Ethiopian Cotton Producers, Ginners, and Exporters Association, says farmers are resorting to smuggled seed as access to other cotton seeds depletes. “The government failed to provide the type of seed preferred by the farmer.”

After the Parliament legislated the GMO proclamation in 2015, the Biosafety and Invasive Alien Species Follow-up and Control directorate at the Environmental Protection Authority (EPA) and EIAR commercialized Bt cotton for the first time in 2019.

However, a number of commercial cotton farmers in Gambella have tried Bt cotton and lost interest after the first year. The first reason was that the authorized Bt cotton could not effectively resist the bollworm.

The other major reason was that the authorized Bt cotton, which is imported from India, is expensive costing USD 28 per kilo. As a result, the EIAR picked Indian-based JK Agri Genetics Ltd. to open a subsidiary company in Ethiopia and multiply the seeds in Ethiopia to avoid the forex problem required to import the seeds annually. However, this plan also bore no fruit, as the Ethiopian farmers rejected the authorized Bt cotton.

“All the cotton farmers in Ethiopia are boycotting the authorized Bt cotton. It did not effectively resist the bollworm. It necessitates the repeated application of insecticides and pesticides. We have to buy the seeds every year at an expensive price. Plus, our farmers lack the technology required to cultivate the authorized Bt cotton with the right agronomical practices. So the farmers are resorting to the smuggled variety, instead,” said Melkamu.

Mesele Mekuria, Cotton Development Director at the Ethiopian Textile Industry Development Center, also said the authorized Bt cotton did not work.

The productivity of existing cotton seeds in Ethiopia, which are Ggedera and DP90, dropped, especially after the varieties were in use for over 30 years and were unable to resist diseases. Currently, rain-based farming of traditional seeds offer anywhere between eight quintals and 28 quintals per hectare.

However, if irrigation is coupled with precise agronomical practice, the local seeds can offer between 45 quintal and 54 quintals per hectare, according to Melkamu.

“Big cotton farmers like Lucy in Afar, and other farmers in Arbaminch have achieved this level of productivity. But there are certain interest groups who are trying to enforce certain Bt cotton on Ethiopia. We need GMO cotton only after we achieve maximum productivity with the existing local varieties,” Melkamu said.

These interest groups, according to him, do not want the local varieties. “Global GMO patent holders are behind these interest groups. Once we start using such GMO varieties, we will be their slaves because the existing local varieties will be ousted in five years and we have to buy their seed every year.”

Yet, other cotton farmers argue that the EIAR has to take samples of the Bt-RR that are smuggled from Sudan, study them, and approve them for Ethiopian farmers.

The meager productivity of local cotton farming has been the Achilles heel for Ethiopia’s aspirations to become the manufacturing hub of Africa, mainly capitalizing on textiles, garments, and apparel.

Damage to health and education infrastructure in six regions of Ethiopia resulting from conflicts need a USD 3.6 billion recovery budget, according to a new Recovery and Rehabilitation Plan document released by the Ministries of Health and Education.

The ministries outlined an intervention plan for the five-year rehabilitation project that will be implemented in three phases. The recovery intervention plan is part of the “Response – Recovery – Resilience” project launched by the Ministry of Finance in March 2022.

The ministries assessed the damage that occurred in Tigray, Afar, Amhara, Benishangul-Gumuz, Oromia, and Konso zones of the Southern Nations Nationalities and People’s (SNNP) regions. The assessment and recovery plan were prepared by the government, with a technical assistance from the World Bank.

Education suffered the most harm. According to the recovery plan, the sector requires USD 2.2 billion to recoup lost learning and rebuild destroyed facilities.

The Ministry of Health’s plan proposed a USD 1.4 billion intervention.

As the assessment shows, the conflict destroyed 2,681 schools completely and another 4,158 schools partially in these regions. 38 Technical and Vocational Education and Training (TVET) institutions and three universities have also sustained varying levels of damage. The number of destroyed TVETs and universities in the Tigray region is not included due to a lack of data.

This destruction of the education sector has affected more than 4.2 million learners and close to 200,000 teachers and education staff, the report reads.

The number of people affected by the damage to the health sector is estimated to be close to 24 million people. The people in conflict-affected area have been “adversely impacted.”

The assessment showed that 3,217 health posts, 709 health centers, and 76 hospitals were partially or completely damaged in the six conflict-affected regions.

Among the six regions that were affected, the Amhara region suffered the most damage to the sectors. Out of the 3,217 health facilities that sustained damage, 69 percent of them are found in the Amhara region. Furthermore, out of 248 ambulances that were damaged or looted, 50 percent were in the region.

The region’s 4,020 schools have also been destroyed, accounting for 58.7 percent of the total damage across all six areas.

However, given the region’s penetration of health institutions, the damage to health facilities in Tigray is substantially greater. 82.9 percent of the region’s hospitals have been damaged. The same fate has befallen Tigray’s 76 percent of health posts and 50 percent of health centers.

In the health sector, out of the overall estimated recovery cost, USD 1.4 billion, the largest share, USD 501.19 million, is for health centers. General and specialized hospitals follow at a cost of USD 342.54 million.

In the education sector, USD 1.36 billion is planned to recover damaged primary and secondary schools in the six regions.

The recovery and reconstruction program will be implemented for five years in three phases, according to the documents prepared by the ministries. The program’s early recovery phase needs will be met within the first six months. Short-term demands range from six to 24 months, whereas medium-term needs range from three to five years.

According to the ministry’s Stakeholder Engagement Plan document, the implementation of the program will be led by a Federal Project Coordination Unit (FPCU) in the Ministry of Finance. Various sectoral ministries and other mandated offices are responsible for the implementation of the program.

In the Tigray region, where the ministries have no access, the recovery project is planned to be implemented by a third party. The Ministry of Finance signed a third-party implementation agreement with the United Nations Office for Project Services (UNOPS) last month.

The World Bank granted USD 300 million in May for the implementation of this project. While the government, which has just begun its fiscal year, has allocated 20 billion birr.

Abiy Ahmed’s (PhD) time as Ethiopia’s prime minister is not without difficulties. He even called himself “a Prime Minister with no time to even undergo a medical checkup” in front of lawmakers. Since taking over after Hailemariam Desalegn’s departure, Abiy has ruled a nation that has been plagued by economic distress, political unrest, and even a civil war that has lasted for more than a year. On top of the never-ending problems he dealt with, with most of the incidents occurring in the northern part of the country, there was another heavy task that challenged his leadership. That is the statehood question brought by ethnic groups living in the south.

A few months after taking office, Abiy was inundated with requests from the leaders of more than a dozen zones and woredas, placing pressure on his government to help them realize their desire for a regional state. Participation in the endeavor to achieve statehood recognition ranged from low-level bureaucrats to zonal leaders and officials in the federal government. Ten zones filed a resolution with the House of Federation (HoF) adopted by their separate councils to hold a referendum on statehood. Abiy was aware right away how urgent it was to fulfill the regions’ desire.

Soon after taking office, Abiy traveled to almost all of the South Region’s ethnically divided zones. It was an attempt to win political support as he rushed to replace the Ethiopian Peoples’ Revolutionary Democratic Front (EPRDF) at the time and establish the ruling Prosperity Party. But his administration’s stance on their desire for statehood was the main topic that dominated the debates at the zones. He promised to respond to their request, which by all legal criteria is legitimate.

However, it was easier said than done to keep the pledge. Sidama was the first regional state to be established following a referendum, with 98 percent of voters supporting the establishment of a new regional state. But civilians paid a price for the government’s efforts to push through Sidama’s desire for statehood, as enraged protesters set fire to the homes of many Hawassa inhabitants and forcibly evicted many others.

In particular, ethnic Amharas were targeted in all incidents involving statehood questions across the South Region. The Attorney General recently released a report that the homes of ethnic Amharas were burned to ashes, which led to the arrest of dozens of people on suspicion of being involved in the violence.

It appears the government understood the consequences of ignoring statehood questions were brought by Ethiopians to the south. Abiy formed a team of experts and high-level government officials two years ago to launch a study on the issue after realizing the consequences of disregarding statehood requests.

The team sent out three recommendations. The first option is to maintain the South Nation, Nationalities and People’s Regional State in its present configuration while making changes to the region’s appropriate number of political seats. The second suggestion was to establish the Sidama region while keeping other ethnic groups as members of the SNNPR. The third involved splitting the region into five, clustering the ethnic groups together.

The third alternative seems to be what the federal administration chose after the first two became unworkable due to rising animosity among ethnic group elites in South Ethiopia.

“I think it’s a step in the right direction, but caution should be exercised to avoid making the same mistake as SNNPR, which is now being dismantled due to growing resentment over resource sharing, political participation, and infrastructure development,” said Keyredin Tezera, assistant professor of Social Anthropology who participated in the study carried out at the request of the federal government.

Following Sidama’s victory for independence from the SNNPR, Kaffa, Sheka, Bench Sheko, Dawuro, and West Omo Zones, as well as the Konta Special District, joined to form the South West Region through a referendum. The local council members of five special Woredas – Amaro, Ale, Basketo, Burji, and Derashe – as well as the Konso, Gedeo, Gamo, Gofa, South Omo, and Wolayta zones voted last week to restructure their administrative units into a newly established regional state.

In a similar fashion, members of the Hadiya, Halaba, Kembata Tmbaro, Silte, and Yem Special Woreda local councils have begun the process of creating a new regional state. However, activists and political organizations active in the zones contested the action.

The Gurghe people, with whom the federal government wants to construct a cluster along with Hadiya, Silte, Kembata, Silte, and Yem, are among those who have objected to the concept of forming regions in clusters. The Guraghe zone has a population of approximately six million people and a land area of approximately 5932 sq.km. Its council was one of the zones that submitted a request to hold a vote on becoming a separate region.

Social activist, Misbah Kedir, is one of the ethnic Guraghes who have contested the federal government’s proposal to partition SNNPR into five cluster areas. He thinks it is wrong for the central government to “forcefully” incorporate the Guraghe Zone into the cluster.

“In addition to Guraghes, other zones that had voted to create a cluster region had also supported the motion after receiving an order from the federal government,” said Misbah.

Wolayita’s opposition wants to be heard too.

“First and foremost, the council, whether in Wolayita or other zones, does not have the power to accept such a resolution on behalf of the people because their term period ended almost seven years ago. Second, this is something that the cadres, not the people, want,” said Amanuel Mogiso, leader of the opposition Wolayita National Movement, which is active in Wolayita Zone.

Amanuel exhorts the federal government to pay attention to what the people want, comparing the situation to sitting on a ticking time bomb. “The Wolayita people have peacefully expressed a desire for their own territory. They need to be heard,” he added.

The politician urges the federal government to avoid meddling and let ethnic communities in SNNPR, including Wolayita, exercise their constitutional rights. “To reject their right to have their own regional state is unlawful,” Amanuel continued.

Jember Abdo, a legal expert, agrees.

“The state is turning into an enabler of violence. In the case of Guraghe, this is what I saw. The people exercised their right to form a region but the federal government’s response was to militarize their hometown,” Jember said urging the federal government to uphold the constitution.

There are economic reasons driving the pursuit of statehood.

“In order to obtain a permit from SNNPR officials, farmers and businessmen must travel hundreds of kilometers from distant areas in the Guraghe zone to Hawassa. And after the cluster region is established, they might be required to follow suit in order to obtain a permit from Hossana, which will likely serve as the cluster region’s capital city,” Misbah said.

Amanuel is worried too.

“The political structure is to blame for the underdevelopment of zones. When you have a significant budget and tax in a region, it is not the same,” Amanuel concluded.

Regardless of the final outcome of the campaign to achieve statehood for Ethiopians in the South, there are still many unknowns about the future of the region, which will depend on the government’s decision on how to manage the grievances of the ethnic groups it intends to organize into a cluster region.

Sergey Lavrov, Russia’s Foreign Minister, affirmed that his country is in favor of giving Africa a permanent seat in the UN Security Council. The Foreign Minister also concurred with Ethiopian officials that the Security Council should undergo reform in a bid to take into account the current state of the world.

Lavrov arrived in Addis Ababa on July 26, 2022 for a two-day trip, where he met President Sahlework Zewde; Demeke Mekonen, deputy prime minister and foreign minister, and other high officials. Lavrov also traveled to Egypt, Congo, and Uganda, before wrapping up his Africa trip by conferring with the diplomatic community at the AU headquarters.

“Ethiopia and Russia share similar stances on issues on the global and regional agenda. These approaches rely on adherence to international law, particularly the tenets of the UN charter and the respect for the sovereign rights of states,” said Lavrov.

During the 35^th ordinary session of the AU summit in February 2022, PM Abiy Ahmed (PhD) exceptionally raised the urgent topic of reforming the UN and securing a permanent seat for Africa in the UNSC.

As a result, the AU passed a resolution that requests “full representation of Africa in the United Nations Security Council, including not less than two permanent seats in the United Nations Security Council with all the prerogatives and privileges of permanent membership, including the right of veto.

The AU also proceeded to request the Committee of Ten Heads of State and Government to continue to intensify its engagement at the highest level with other interested and regional groups and key stakeholders, including the five permanent members of the UN Security Council, with a view to building on progress made in advancing, canvassing and promoting the Common African Position.

The AU’s quest for reform of the UN began in 2005 when African states approved the Ezulwini consensus and Sirte Declaration on the Reform of United Nations Security Council.

In 2010, President Goodluck Jonathan of Nigeria, told the UN General Assembly, “The exclusion of Africa from the permanent member category of the Security Council can no longer be justified. We urge the UN to quicken the pace of its reforms. Not only to better reflect the current global realities but also to ensure that it enjoys genuine legitimacy.”

Africa does not have a proportional representation in the global body.However, the consideration has become critical, as Africa is frequently impacted by decisions over which it has no say.

In particular, both Ethiopia and Russia have been haunted by the UNSC particularly since last year. In the past year, the UNSC discussed sanctioning Ethiopia in relation to human rights violations in the Tigray war. However, the considerations were vetoed by Russia and China. Ethiopia also paid back by refraining from voting, when the UNSC introduced emergency voting in March 2022 to condemn Russia’s invasion of Ukraine.

Demeke appreciated Russia’s “unwavering support during difficult times of need, particularly in the recent struggle to safeguard Ethiopia’s sovereignty.’

The major purpose of Lavrov’s trip to Africa, amidst a propaganda war with the west, is also to secure Africa’s support in similar UN voting scenarios in the future.

Gaining a permanent seat on the UN Security Council will position Africa as a balancing force between the power struggles of the east and west, as well as the rapidly changing global geopolitics. However, reforming the western-dominated organization might not be easy, according to scholars. But once the UN begins processing the AU’s request, Russia and China can play a decisive role in making Africa earn its place in the UN structure.

Over 60,000 foreigners have registered so far

Ethiopia’s Ministry of Foreign Affairs urged foreigners with expired visas and resident permits to get registered in 125 selected areas of registration established for this purpose.

Speaking at a press conference on Thursday, Ministry Spokesperson Meles Alem (Ambassador) has urged all foreign nationals living in Ethiopia without proper documents to be registered immediately before authorities start to take legal action as per the international law Ethiopia has signed.

Foreigners without any visa or residence permit, as well as refugees or asylum seekers requesting status and residing in Addis Ababa and its vicinities with or without an urban refugee permit, are also requested to register as of July 25, 2022.

According to Meles, within the last five days of the official announcement for registration, over 60,000 people have registered from countries including Canada, America, Eritrea, Congo, Italy, Syria, China, Turkey, Ghana, Burundi, Liberia, India, Bangladesh, South Sudan, and other countries.

The first phase of registration sites is installed in Addis Ababa and some Oromia administrative zones, and the second round of registration will be opened soon in regional states and the Dire Dawa City administration, the spokesperson told the reporter.

Registration is conducted under the auspices of the Immigration and Citizenship Service, through the Vital Events Registration Offices of all Woredas and the Immigration and Citizenship Service, as per its mandate given by a proclamation to register and administer legal permits for foreign nationals living in Ethiopia.

“We have started this to make sure that immigration work is proceeding as per the legal procedures,” said Meles (Ambassador), adding that there is no further intention of expelling or any other form of stunt.

The spokesperson has further called on foreigners to take advantage of this chance before officials start to take legal measures against those who failed to register as per the rule. However, the formal registration process will not be applied to the diplomatic community.

Over 180,000 foreigners are expected to be registered in Addis Ababa, Meles added.

In a similar presser, the spokesperson announced the cancellation of 162 million US dollars of rolling debt by the Russian government, which Ethiopia has borrowed since the Soviet Union period. According to Meles, Russia has changed the modality from debt to a development grant for purposes of modernizing the Melka Wakana Hydroelectric Power Station and upgrading Balcha Hospital’s technical capabilities.

Over 60,000 foreigners have registered so far

Ethiopia’s Ministry of Foreign Affairs urged foreigners with expired visas and resident permits to get registered in 125 selected areas of registration established for this purpose.

Speaking at a press conference on Thursday, Ministry Spokesperson Meles Alem (Ambassador) has urged all foreign nationals living in Ethiopia without proper documents to be registered immediately before authorities start to take legal action as per the international law Ethiopia has signed.

Foreigners without any visa or residence permit, as well as refugees or asylum seekers requesting status and residing in Addis Ababa and its vicinities with or without an urban refugee permit, are also requested to register as of July 25, 2022.

According to Meles, within the last five days of the official announcement for registration, over 60,000 people have registered from countries including Canada, America, Eritrea, Congo, Italy, Syria, China, Turkey, Ghana, Burundi, Liberia, India, Bangladesh, South Sudan, and other countries.

The first phase of registration sites is installed in Addis Ababa and some Oromia administrative zones, and the second round of registration will be opened soon in regional states and the Dire Dawa City administration, the spokesperson told the reporter.

Registration is conducted under the auspices of the Immigration and Citizenship Service, through the Vital Events Registration Offices of all Woredas and the Immigration and Citizenship Service, as per its mandate given by a proclamation to register and administer legal permits for foreign nationals living in Ethiopia.

“We have started this to make sure that immigration work is proceeding as per the legal procedures,” said Meles (Ambassador), adding that there is no further intention of expelling or any other form of stunt.

The spokesperson has further called on foreigners to take advantage of this chance before officials start to take legal measures against those who failed to register as per the rule. However, the formal registration process will not be applied to the diplomatic community.

Over 180,000 foreigners are expected to be registered in Addis Ababa, Meles added.

In a similar presser, the spokesperson announced the cancellation of 162 million US dollars of rolling debt by the Russian government, which Ethiopia has borrowed since the Soviet Union period. According to Meles, Russia has changed the modality from debt to a development grant for purposes of modernizing the Melka Wakana Hydroelectric Power Station and upgrading Balcha Hospital’s technical capabilities.

Special Forces of Somali regional state and a coalition of other regional and federal security forces have conducted an all-out counter attack to purge Al-shabab fighters that entered Ethiopia’s borders on Friday. The regional government deployed hundreds of Special Forces to conduct the operation.

“A number of Al-shabab fighters entered the Ethiopian border, after they conducted an attack at a time nobody expected. They first engaged with Somali Special Forces. And heavy casualties occurred on both sides. But we are clearing them out,” said an official in the regional government, who spoke to The Reporter requesting to remain anonymity since the federal government is also involved and information is to be disseminated from the center.

“We have also captured their fighters, and the operation will continue until they are cleared out from the area,” added the official.

The terror group first attacked two border towns in Somalia’s side on July 20, 2022, on the same day Somali regional state officials convened to evaluate its security forces performance.

After the first clash at Yeed and Aato towns in Ethio-Somalia border, the militants reportedly killed twenty Ethiopian forces including three civilians. The group lost 63 of its own.

The al-Qaeda linked group tried to enter Ethiopia through Afder zone in southern part of Somali region.

Apart from a strong presence by Ethiopian forces in the border areas, Ethiopia also deployed close to 4,000 troops in Somalia under the AU Transition Mission in Somalia (ATMIS), a reconfigured version of the former AU Mission in Somalia (AMISOM). Ethiopian troops maintain a stronghold in Baidowa.

However insiders question why Al-shabab is attacking Ethiopia at this moment.

“The attack is intended to divert the attention of Ethiopia. Al-shabab is conducting the attacks in coordination with the TPLF and other insurgents in Ethiopia,” said a security expert who focuses on Al-shabab.

Other insiders also link the rising Al-shabab attacks with the instability in Ethiopia. The restructuring of AMISOM and controversies shadowing the continuity of ATMIS, is also contributing to Al-shabab’s resurrection.

Over the past few months, Al-shabab’s attacks have evolved from suicide bombings to attacking military bases in Somalia, including an AU military base. Experts stress that the group is gaining momentum as Horn of Africa countries are occupied with domestic conflicts and the EU, the largest financer of AMISOM/ATMIS, is backtracking.

A few weeks ago, the newly elected Somalia President, Hassan Sheikh Mohamud said negotiations should be considered with Al-shabab, a rare gesture, which is becoming almost a shadow state.

However, the militant group in a statement said it fights to establish an Islamic state in the Horn.

In a continued conflict in West Wollega Zone, over 1,105 civilians are killed this year, including 28 officials who were shot in one day. The zone has also lost properties worth over three billion birr to extended conflict during the just ended fiscal year.

Reports of the devastating impact of the conflict presented to the Caffee Oromia, council of the Oromia regional state, which held its annual meeting over the week. Gammachis Dabala, administrator of West Wollega zone, told the council that both ethnic Amhara and Oromo are killed in his zone.

The regional government has repeatedly launched operation to eradicate the Oromo Liberation Front (OLF-Shene) group, which designated terrorist by the House of Peoples Representative (HPR) and still maintaining West Oromia as its stronghold. During the last month alone, the group has killed hundreds of civilians, according to Ethiopian Human Rights Commission (EHRC) reports. PM Abiy Ahmed called it “a massacre.”

Most of the zones of Oromia are currently under threats of the insurgent group, according to official reports. Loss of life, property damages, and closure of schools are also tolling across the regional state. In North Shewa alone, some 195 schools remain closed, while over 75,000 students were out of school, according to the report presented during the Caffee meeting.

Taye Dendea, member of the Oromia Prosperity party and state minister of Peace, was at dismay after attending the Caffee meeting. “Last year, only few woredas of Oromia were affected by conflict. Currently, eight zones of Oromia have security threats. We failed the people that elected us just last year. The Oromia Regional Government failed to fulfill its duty to protect the civilians. The damage up on our people is shocking. Externalizing the problem cannot be a solution,” he wrote on Facebook after the meeting was concluded on Friday.

The state minister also harshly criticized the budget allocation of the just started 2022/23 is not enough to fight the insurgents. Nearly 400 million birr is allocated for the regional security budget, which the state minister argues should be more than one billion birr. This accounts for less than one percent of 158.6 billion birr budget approved by the Caffee.

However, the state minister did not mention shortcomings of his ministry why the insurgent group is remaining at large.

Businesses that are registered in Tigray region as a federal taxpayer but are currently located outside the region will be paying their taxes at the Northwest Branch of the Ministry of Revenue in Addis Ababa.

The federal revenue that should have been collected in the region will be collected directly by the ministry. The tax that should have been collected by the regional government will be deposited in a trust bank account.

The ministries of finance and revenue are implementing this temporary procedure because organizations and individuals registered as taxpayers in Tigray are having a difficulty to continue their business activities in other parts of the country, according to Abaynesh Abate, the ministry’s tax declaration director.

Despite their desire to continue working in their current location, the taxpayers were unable to renew their business licenses, vehicles or construction equipment.

Abaynesh said that they could not obtain loans, bid on contracts or receive other government services. “Some of them even claimed that the house they rented for their business was in trouble since their business license had not been renewed.”

More than 100 complaints from Tigray’s taxpayers have been lodged to the ministry, and the number continues to grow. The majority are taxpayers who must pay taxes to the regional government.

Abaynesh says among the complainants, ten are Tigray registered firms that are managed by Commercial Nominees and pay federal taxes.

She explained that after the ministry informed the Ministry of Finance about the complaint in April, it allowed taxpayers to get a temporary tax clearance through a temporary procedure or register as taxpayers elsewhere.

In a letter written by the Ministry of Finance to the Ministry of Revenue last month, it acknowledged the regional government’s authority to collect the tax revenue in Tigray region.

The minister cited Article 96 of the Constitution to explain saying, “Since the income collected from individual businessmen and regional public enterprises is a regional income, it is clear that it is the regional government that can levy and collect tax.”

On the other hand, the letter explains that the tax collected from private organizations located in the region is the joint income of the federal and state governments, levied and collected by the federal government. But the income collected from federal public enterprises located in the region is the income of the federal government.

Nevertheless, since both taxpayers registered in Tigray are facing difficulties to conduct their activities due to the “emerging security problem,” State Minister, Eyob Tekalegn, in a letter stated that it is necessary to establish a temporary system.

The Ministry of Revenue, which has designated the North West branch in Addis Ababa’s Lideta neighborhood, will ensure that these taxpayers receive their tax clearance.

Abaynesh added that a request has been made to the Ministry of Finance to open a trust bank account where regional taxpayer revenue will be put.

“It will be held in a trust for later transfer to the region,” she explained.

According to Abaynesh, the ministry would only collect the taxes submitted by taxpayers because there is no means to check how much the region’s taxpayers owe.

“We don’t have any information to show how much they should be paying at that point. When the situation in the region stabilizes, it will be thoroughly examined” Abaynesh elaborated.

If taxpayers want to shift their workplace to their current address after receiving their tax clearance, registrations will be completed at the preferred address.

Under typical circumstances, changing a company’s address requires amending the company’s establishment document and submitting meeting minutes. Providing permission to change address is the authority of the regional government. All these requirements are not necessary expected to be meet in the temporary procedure.

However, even though both federal and state taxpayers registered in the state will be issued a tax clearance certificate from the Ministry of Revenue, they cannot sell their property. According to the Ministry of Finance’s letter, it is impossible to verify whether they have tax debt or not in the current situation.

Berhane Mewa is not only the former president of the Ethiopian and Addis Ababa Chamber of Commerce and Sectoral Associations, but is also a lifetime patriot in Ethiopia’s private sector struggles against state domination in the economy. Before he was forced into exile eighteen years ago by the EPRDF regime, he took up the struggle to create an independent chamber system and a real private sector in Ethiopia.

An industrial chemist by profession, Berhane came back to Addis to process a pharmaceutical investment license, to the tune of USD 22 million. He already has a plastic and rubber factory, which he established before his exile to the US.

Despite positive signs in the politics arena, Berhane argues the chambers system is still far from defending the private sector’s interests and contributing to the economy. Ashenafi Endale was granted audience. Excerpts:

The Reporter: What was at the core of your struggle for the Ethiopian private sector?

Birhane Mewa: I was forced to leave Ethiopia eighteen years ago. The government at the time was not happy with struggle in the Chamber, to create a strong private sector. I had no political interests. But after I left Ethiopia, I became a member of Kestedemena and Coalition for Unity and Democracy (Kinijit) political parties in North America. I was the secretary in Kinijit’s international leadership wing.

After Kinijit’s leadership were released from prison, I went back to normal life and started working as a business consultant, and then as a project manager. Of course I traveled to Ethiopia in between to attend my wife’s funeral. But now, I came to Ethiopia to process an investment license.

We are in the process of establishing a pharmaceutical factory in Ethiopia, in cooperation with Ethiopians engaged in the pharmacy business in the US. In general, we are here following PM Abiy Ahmed’s (PhD) call to the diaspora.

What is the kind of Chamber you want to see in Ethiopia?

The Chamber was first established as ‘the Addis Ababa Traders Association,’ during the Emperor’s era. Then it was re-established as Ethiopian Traders Council. It was free and active in advising the government, until Derg completely changed that trend. Derg made memberships mandatory and all businesses had to pay a chamber membership fees after they get their licenses.

Derg also shrunk the number of board members representing the private sector in the council, from eleven to one. At that time, nine of the eleven board members were general managers of state corporations; with only Wubshet Werkalemahu was representing the private sector.

After EPRDF took power, the general managers of state corporations left the chamber. At the time, I was president of the Ethiopian Private Manufacturing Association. So I became vice president of the Chamber to close the vacuum. And when Kebour Gena left, I became president of the chamber, through competition.

The fundamental objective of the Chamber is to advise the government before it introduces polices that affect the private sector and the economy. The second is to provide services for the private sector including trainings, information and arbitration. We were successful on both. Both the Addis and Ethiopian Chambers won various international awards, including the ‘best chamber in Africa’ award.

Nonetheless, the EPRDF was working hard to create divisions amongst, Addis Ababa, regional and sectoral chambers and associations. I worked hard to cut out such divisions and create a stronger chamber. We also managed to get back the chamber’s assets taken by the government. We also managed to access 100,000 sq. m of land for the chamber, on which the Addis-Africa exhibition center is currently being established.

Where is (should be) the exact line between state and private sector roles in the economy?

In principle, the private sector is the backbone of the economy, especially in a free market system. But during the TPLF dominated EPRDF regime; the government tried to replace the private sector by state affiliated endowment companies and state owned enterprises, which are still under party control. They enjoy access to finance, bureaucratic support, information, monopoly and other privileges. This has been stunting the growth of the private sector. I am not sure whether the situation still changed. Party affiliations still control the media, not only businesses and the economy.

Besides those parastatals, there are private businesses parasitic on preferential treatments, provided from the parties. Preferential treatment is still given for businesses, in accessing land, finance, foreign currency, and other privileges. A real private sector, which is self-created and hardworking, is very limited in Ethiopia.

The parties and government affiliated private sectors, still prevail, only changing its face. If you look at past private businesses currently, it is not hard to find a party or state support.

The right private sector should be represented only by the Chamber. It should be free, with no political interests, but defend the interests of the private sector. When we say ‘private sector’, it includes the street vendor and Gulit, to the factory and bank owners. The similarity amongst them is that they have a business license, and a common interest. There are various obstacles that hinder the chamber.

Ethiopia’s future depends on the real private sector. Foreign Direct Investments are also necessary but the domestic private sector is critical in terms of self-sufficiency, sovereignty and retention of repatriation. FDI’s can leave anytime.

Even in the USA, the private sector supports either democrats or republicans. Can a real private sector exist without any affiliation with the ruling party?

If you go to Mercato, everyone works for their own interests. They are not paid by the government but they pay taxes to the government. What the government can do is improve and equalize the playing ground.

Of course the private sector in the US supports parties. The difference is corruption is legal in the US. It is called lobbying and it is not a crime. It is also regulated. But in Ethiopia, parties establish affiliated businesses and keep taking money. The biggest problem appears when the parties themselves engage in the business. This is the biggest problem in Ethiopia. Nobody knows where the money from public enterprises goes to.

Political parties must exit from businesses and the economy. In the US, individuals and businesses giving money to parties, is publicly known, and audited. The tax authority also knows it.

Do you think the existing private sector in Ethiopia can be changed into a real private sector, or should we start over?

A real private sector is not something we create. What the government should do is create conducive environment for a ‘real private sector to emerge.’ It is the demand and supply dynamism that creates a real private sector. There are shoe shiners who have become millionaires. Did the government create them? Of course the government can facilitate support, but without political affiliation.

PM Abiy’s administration rolled out privatization and liberalization initiatives in the past three years. Do you think it is sufficient to re-balance the state dominated economy previously under the EPRDF?

There are positive signs but still some individual businesses are close to the government, instead of organized business communities under the Chamber. I do not think this is good. The government must recognize, capacitate and work with the Chamber. There are improvements regarding regulatory issues and public services. But still there is a chain of corruption in the government system. It is related to power and partisanships, which is a big obstacle that must be reduced. The government has good intentions. There are various issues studied and forwarded by the chamber and sectoral associations. Things will improve if the government reacts on those issues. If it does not start punishing corruption and avoid party affiliation and preferential treatments for selected businesses, the problem will get worse. It is the government that creates a corrupt private sector.

Corruption is also unavoidable when the public servants are paid meager salaries. The government must pay public servants sufficiently. So, corruption is high not because people are bad, or the officials are greedy, but the civil servant takes corruption as supplementary revenue.

The government also drafted a new proclamation to re-establish the Chamber. The draft proposes membership as mandatory, among others. How can a strong chamber be established? Recently, two chamber officials also defected to the US. Why is there always an internal feud inside the chambers structure?

There is a structural problem in the Chamber. It is intentionally created. Making memberships mandatory generates revenue for the chamber. But it hinders the chambers from providing quality service for their members. This was seen during the Derg regime. Immediately after the EPRDF came, it worked hard to weaken all institutions, including the chamber, teachers association, and others. The EPRDF made memberships willingly, to shrink the chamber’s revenue and finally close the chamber due to a lack of fund. But we managed to survive, by improving services and generating revenue from creative works.

Especially, the Addis Ababa Chamber became stronger, at the time, while there were some problems in the Ethiopian Chamber of Commerce. When I was about to leave, there were efforts to change the Chamber’s laws and the government wanted to re-design the Chamber, to fit to the politics.

The Chamber serves wherever there are private businesses, not government structures or political leaderships. But the government shadowed and dominated cities’ chambers, by chambers of regional states. These regional state chambers are under the control of party officials. The Ethiopian chamber also fell under the influence of party members. We tried to avoid those influences and somehow succeeded to maintain a Chamber that represents only the interest of businesses.

The proclamation tried to further divide the chamber across sectors, on top of the regional structure, dissecting the interest of the private sector. Kiosk and garage owners have different interests, but also have common interests. These specific interests should be solved under sectoral associations, and their common interest under the chamber. But what the government did is bundle the sectoral associations and the Chamber together. Businesses with different interests sat on the same table, and failed to agree. So, there is still a structural problem.

I have seen the new draft proclamation too. We are unfortunate the draft did not address the problem still. The chambers and the business community still did not reach a consensus on the draft. The Addis Ababa and Ethiopian chambers are in agreement and sectoral associations have also their won perspectives.

Chambers should work only on general issues that represent the common interests of all businesses and the economy at large, aided by sectoral associations formed separately, representing interests of businesses in specific sectors. Thus, the chamber and sectoral associations should be established separately. I do not know the status of the draft proclamation currently, but if it is ratified, it would take another generation to amend.

So, do you believe the Ethiopian chamber should be the all-encompassing strong umbrella?

Not necessarily. My point is the chamber system should be separate from sectoral associations. Whether at local, cities or a national level, chamber must be strong. But they must align. The issue of sectoral associations is completely different. For instance, leather industries have problems that can be solved both through the chamber, and their association platforms. This is the right way.

For instance, there was the Ethiopian Manufacturing Industries Association. It was challenging the government regarding manufacturer’s interests. Its strong momentum even empowered the chamber. Then the EPRDF practically dismantled it. It even prohibited the association from renting an office. The EPRDF regime never wanted such strong associations and chambers. The reason why the government overlapped chambers and sectoral associations is to deny them on common grounds.

If the draft is ratified, it only maintains the problem. Currently, the government’s system prefers individual businesses, than the organized private sector.

So the draft should be revised and discussed again?

The process of crafting the proclamation has problems from its very inception. The chamber members and business communities have no consensus on the draft. The Ethiopian, Addis Ababa, and regional chambers must sit down and discuss on the issue.

The Ethiopian government is trying to allure investments by the diaspora. If the diaspora invest and save in US banks, or in Ethiopia, which return on investment is attractive? Or do you think the government should design incentive packages for the diaspora?

Businesses in Ethiopia are more profitable than other countries. The reason the US government devised AGOA from the beginning, is because African businesses can be profitable. Even in terms of savings, the return in Ethiopia is higher than Europe or elsewhere. The problem in Ethiopia is not on returns, but convertibility. Repatriation might be difficult. Saving in Ethiopia by itself is profitable, let alone investment. There are so many profitable business sectors in Ethiopia. Many sectors are emerging, and not exploited yet.

The other problem is that the Ethiopian diaspora has lost trust in the government back home. So, the current government must reverse that perception, through transparency, commitment and service efficiency.

Thirdly, the diaspora needs information supply on feasible businesses and projects in Ethiopia. Then the diaspora can form share companies, joint ventures, PLC’s or other investment modalities. If the diaspora know feasible businesses and the laws, then they can invest. Currently, the diaspora is placing their money on the stock market and other businesses abroad. They can divert that money to go back home.

Especially, the profitability in the financial industry in Ethiopia is very lucrative; but the government should facilitate currency convertibility. Plus, most diaspora’s in Europe and the US left Ethiopia three to four decades ago. They are at s retirement age now. So if the health system in Ethiopia is improved, most diaspora’s would prefer to go back to Ethiopia.

The diaspora also wants transparent systems to complain in cases of corruption and bad services. There is corruption in Europe and the US. But it is political corruption not work corruption. Political corruption is trying to twist or influence introduction of policies, proclamations or directives. Work corruption is bribing officials, institutions, and public services. There must be a complaint window for this.

The west has been shifting away from Ethiopia and imposed sanctions. Substantial number of Ethiopians vote, especially in the US. Can Ethiopians and black Africans use their voting power to discard unfavorable officials or parties in the US or influence to reverse such sanctions?

The diplomatic system has a more crucial role in this. To be specific, the US faced unprecedented situation in Ethiopia. A government that refuses foreign pressure emerged in Ethiopia.

The US even used the UNSC to pressurize Ethiopia, meeting twelve times within six months. On top of the strong refusal of the Ethiopian government to surrender, the #nomore movement strengthened the support for Ethiopia, rallying Africans behind Ethiopia. The movement is stronger than election powers. The movement eroded US’s credibility in Africa, and in the world.

Even during calls that Addis Ababa will fall to the hands of insurgents, one million diaspora opted to come back home. I believe Ethiopia will regain its rightful place in the international stage.

Unlike any time before, the diaspora is on the same page now, regarding national issues. Before this, the diaspora’s were highly divided and turned against each other. The division created a negative energy. If the diaspora was united before, the EPRDF could have been long gone. The Diaspora and opposition figures abroad were used to strife, not unity.

Can we say that the US’s pressure is normalizing since the tension with China over the horn escalated?

Their strategy differs. The US wants to ensure its interests through political influence, while China does it through investment and economic empowering. The US’s and China’s struggles will continue, whether Ethiopia is there or not. China, Russia, Turkey, Iran and India, to some degree, are joining the friction now. They have certain interests with or against the US.

The US’s fear is not what China will do in Ethiopia, but the kind of measures Ethiopia takes. For instance, Ethiopia’s normalization with Eritrea and the alliance with Somalia is a threat for the US. When the US told Ethiopia to stop the war, Ethiopia rather turned a deaf ear. Ethiopia filled the renaissance dam, when the US opposed it. These are some of the bold moves against US interests.

These moves have nothing to do with China, but they are decisions emanating from the nature of Ethiopians. So, the confrontation between the US and China continues, while Ethiopia strides to protect and implement its national interests fully.

I do not think Ethiopia will completely shift its diplomatic ties towards China. Imperialism is always imperialism, but it changes its face. The US always wants a government that listens to them. If a government refuses to carry out their interest, they depose that government, including assassinations. In cases such as Libya, Iraq and Syria, the US’s footprints in the countries politics can be seen from afar.

The US put the same type of pressures that worked before, and in Ethiopia’s case, it has failed. But the pressure will continue. Ethiopia has passed a major obstacle. Yet, Ethiopia needs to sharpen its diplomacy more.

At what stage is your investment process currently? What are your future plans?

We are establishing the pharmaceutical factory in Ethiopia, in collaboration with highly professional pharmacists, scientists and business people in the Ethiopian diaspora. Finance, knowledge and vision are required to establish a medicine factory. If you have capital, you can buy knowledge, since it is a commodity.

Our vision is to manufacture medicine and medical equipment’s in Ethiopia and provide for Ethiopians. It is not even about profits. We wanted to improve the medicine supply shortages in Ethiopia.

We have been preparing for the past two years. We came to invest in Ethiopia, amidst the rhetoric that Addis Ababa is about to fall. Our team strongly believes in Ethiopia. Currently, we are processing the investment license.

How much is the investment?

The initial investment will take us between USD 20 million to USD 22 million.

What is your conclusion on the soundness of the Ethiopian economy, especially in post-pandemic and post-conflict endeavors?

My first impression when I came to Ethiopia after almost two decades was that all the negative narratives about Ethiopia and Addis Ababa are wrong. There is still an active economy. Across streets of Addis Ababa, day and night, residents are scrambling to buy from street vendors. This indicates to a huge demand in the economy. This is a living economy.

But it does not mean there are no problems in the economy. There is a forex shortage, industrial inputs shortages, logistics problems and others. Yet, the economy has a big potential, especially if public services are improved, corruption is eliminated and bureaucracy is improved.

Do you think the government should maintain protectionism?

The US and Europe are not afraid of protectionism. Why should Ethiopia be afraid of it? Ethiopia is eager to join the WTO. But Europe is still protecting its agriculture. The US is prohibiting import of wood, aluminum and other items, especially trump did everything to protect local industries. So, Ethiopia must also protect its industries.

After America banned Ethiopia from the AGOA, US companies left the Hawassa industrial park. If it is a local factory, they would not do so.

Before, the US’s private sector had no national interest, instead they go for profits. That is why US industries moved factories to China, in search of a cheap labor. But now, the US government is asking them to come back and create jobs in the US.

The country needs a nationalist private sector. The private sector cannot just seek profits and become a pure capitalist. It must contribute to the social wellbeing and development of the country.

Even FDI’s must be undertaken in a joint venture scheme. If it has a local element, the investment can be sustainable.

How can one balance profit seeking versus national interests? Scholars also say the psychological make-up of Ethiopians is not compatible for capitalism.

Corporate governance, labor unions and social responsibility can balance capitalism. National security should be a concern of the private sector. If there is no security, there is no transport, meaning there is no market. Drought should concern the private sector. These make the private sector become a nationalist by default.

One of the major tasks of the Chamber is to make businesses discharge their social responsibility.

Thus, your conclusion is capitalism can work in Ethiopia.

The old way of capitalism, which is seeking only profits, does not exist anymore. Of course, you are responsible for your shareholders and board members. At the same time, you have to be responsible to the society.

Why you are not investing in the banking sector rather than pharmaceuticals?

The government said it opened the banking sector for the diaspora, but still, there are unsettled problems. It said the diaspora had to invest in foreign currency. This is an obstacle.

But the major reason I joined the pharmaceutical project, is because it is a matter of professionalism. Manufacturing is difficult in Ethiopia. We have a big purpose to bring change in the medical supply shortage in Ethiopia. We will produce capsules and tablets. We will also export, once we address the domestic demand. The company will also establish an R&D wing, which will conduct studies for other firms. Most of the founders are also researchers.

Are you a chemical engineer by profession?

I studied chemistry. I also studied industrial chemistry at Bahir Dar polytechnic. I already have a factory in Ethiopia, which produces plastic and rubber. It is expanding now.

Berhane Mewa is not only the former president of the Ethiopian and Addis Ababa Chamber of Commerce and Sectoral Associations, but is also a lifetime patriot in Ethiopia’s private sector struggles against state domination in the economy. Before he was forced into exile eighteen years ago by the EPRDF regime, he took up the struggle to create an independent chamber system and a real private sector in Ethiopia.

An industrial chemist by profession, Berhane came back to Addis to process a pharmaceutical investment license, to the tune of USD 22 million. He already has a plastic and rubber factory, which he established before his exile to the US.

Despite positive signs in the politics arena, Berhane argues the chambers system is still far from defending the private sector’s interests and contributing to the economy. Ashenafi Endale was granted audience. Excerpts:

The Reporter: What was at the core of your struggle for the Ethiopian private sector?

Birhane Mewa: I was forced to leave Ethiopia eighteen years ago. The government at the time was not happy with struggle in the Chamber, to create a strong private sector. I had no political interests. But after I left Ethiopia, I became a member of Kestedemena and Coalition for Unity and Democracy (Kinijit) political parties in North America. I was the secretary in Kinijit’s international leadership wing.

After Kinijit’s leadership were released from prison, I went back to normal life and started working as a business consultant, and then as a project manager. Of course I traveled to Ethiopia in between to attend my wife’s funeral. But now, I came to Ethiopia to process an investment license.

We are in the process of establishing a pharmaceutical factory in Ethiopia, in cooperation with Ethiopians engaged in the pharmacy business in the US. In general, we are here following PM Abiy Ahmed’s (PhD) call to the diaspora.

What is the kind of Chamber you want to see in Ethiopia?

The Chamber was first established as ‘the Addis Ababa Traders Association,’ during the Emperor’s era. Then it was re-established as Ethiopian Traders Council. It was free and active in advising the government, until Derg completely changed that trend. Derg made memberships mandatory and all businesses had to pay a chamber membership fees after they get their licenses.

Derg also shrunk the number of board members representing the private sector in the council, from eleven to one. At that time, nine of the eleven board members were general managers of state corporations; with only Wubshet Werkalemahu was representing the private sector.

After EPRDF took power, the general managers of state corporations left the chamber. At the time, I was president of the Ethiopian Private Manufacturing Association. So I became vice president of the Chamber to close the vacuum. And when Kebour Gena left, I became president of the chamber, through competition.

The fundamental objective of the Chamber is to advise the government before it introduces polices that affect the private sector and the economy. The second is to provide services for the private sector including trainings, information and arbitration. We were successful on both. Both the Addis and Ethiopian Chambers won various international awards, including the ‘best chamber in Africa’ award.

Nonetheless, the EPRDF was working hard to create divisions amongst, Addis Ababa, regional and sectoral chambers and associations. I worked hard to cut out such divisions and create a stronger chamber. We also managed to get back the chamber’s assets taken by the government. We also managed to access 100,000 sq. m of land for the chamber, on which the Addis-Africa exhibition center is currently being established.

Where is (should be) the exact line between state and private sector roles in the economy?

In principle, the private sector is the backbone of the economy, especially in a free market system. But during the TPLF dominated EPRDF regime; the government tried to replace the private sector by state affiliated endowment companies and state owned enterprises, which are still under party control. They enjoy access to finance, bureaucratic support, information, monopoly and other privileges. This has been stunting the growth of the private sector. I am not sure whether the situation still changed. Party affiliations still control the media, not only businesses and the economy.

Besides those parastatals, there are private businesses parasitic on preferential treatments, provided from the parties. Preferential treatment is still given for businesses, in accessing land, finance, foreign currency, and other privileges. A real private sector, which is self-created and hardworking, is very limited in Ethiopia.

The parties and government affiliated private sectors, still prevail, only changing its face. If you look at past private businesses currently, it is not hard to find a party or state support.

The right private sector should be represented only by the Chamber. It should be free, with no political interests, but defend the interests of the private sector. When we say ‘private sector’, it includes the street vendor and Gulit, to the factory and bank owners. The similarity amongst them is that they have a business license, and a common interest. There are various obstacles that hinder the chamber.

Ethiopia’s future depends on the real private sector. Foreign Direct Investments are also necessary but the domestic private sector is critical in terms of self-sufficiency, sovereignty and retention of repatriation. FDI’s can leave anytime.

Even in the USA, the private sector supports either democrats or republicans. Can a real private sector exist without any affiliation with the ruling party?

If you go to Mercato, everyone works for their own interests. They are not paid by the government but they pay taxes to the government. What the government can do is improve and equalize the playing ground.

Of course the private sector in the US supports parties. The difference is corruption is legal in the US. It is called lobbying and it is not a crime. It is also regulated. But in Ethiopia, parties establish affiliated businesses and keep taking money. The biggest problem appears when the parties themselves engage in the business. This is the biggest problem in Ethiopia. Nobody knows where the money from public enterprises goes to.

Political parties must exit from businesses and the economy. In the US, individuals and businesses giving money to parties, is publicly known, and audited. The tax authority also knows it.

Do you think the existing private sector in Ethiopia can be changed into a real private sector, or should we start over?

A real private sector is not something we create. What the government should do is create conducive environment for a ‘real private sector to emerge.’ It is the demand and supply dynamism that creates a real private sector. There are shoe shiners who have become millionaires. Did the government create them? Of course the government can facilitate support, but without political affiliation.

PM Abiy’s administration rolled out privatization and liberalization initiatives in the past three years. Do you think it is sufficient to re-balance the state dominated economy previously under the EPRDF?

There are positive signs but still some individual businesses are close to the government, instead of organized business communities under the Chamber. I do not think this is good. The government must recognize, capacitate and work with the Chamber. There are improvements regarding regulatory issues and public services. But still there is a chain of corruption in the government system. It is related to power and partisanships, which is a big obstacle that must be reduced. The government has good intentions. There are various issues studied and forwarded by the chamber and sectoral associations. Things will improve if the government reacts on those issues. If it does not start punishing corruption and avoid party affiliation and preferential treatments for selected businesses, the problem will get worse. It is the government that creates a corrupt private sector.

Corruption is also unavoidable when the public servants are paid meager salaries. The government must pay public servants sufficiently. So, corruption is high not because people are bad, or the officials are greedy, but the civil servant takes corruption as supplementary revenue.

The government also drafted a new proclamation to re-establish the Chamber. The draft proposes membership as mandatory, among others. How can a strong chamber be established? Recently, two chamber officials also defected to the US. Why is there always an internal feud inside the chambers structure?

There is a structural problem in the Chamber. It is intentionally created. Making memberships mandatory generates revenue for the chamber. But it hinders the chambers from providing quality service for their members. This was seen during the Derg regime. Immediately after the EPRDF came, it worked hard to weaken all institutions, including the chamber, teachers association, and others. The EPRDF made memberships willingly, to shrink the chamber’s revenue and finally close the chamber due to a lack of fund. But we managed to survive, by improving services and generating revenue from creative works.

Especially, the Addis Ababa Chamber became stronger, at the time, while there were some problems in the Ethiopian Chamber of Commerce. When I was about to leave, there were efforts to change the Chamber’s laws and the government wanted to re-design the Chamber, to fit to the politics.

The Chamber serves wherever there are private businesses, not government structures or political leaderships. But the government shadowed and dominated cities’ chambers, by chambers of regional states. These regional state chambers are under the control of party officials. The Ethiopian chamber also fell under the influence of party members. We tried to avoid those influences and somehow succeeded to maintain a Chamber that represents only the interest of businesses.

The proclamation tried to further divide the chamber across sectors, on top of the regional structure, dissecting the interest of the private sector. Kiosk and garage owners have different interests, but also have common interests. These specific interests should be solved under sectoral associations, and their common interest under the chamber. But what the government did is bundle the sectoral associations and the Chamber together. Businesses with different interests sat on the same table, and failed to agree. So, there is still a structural problem.

I have seen the new draft proclamation too. We are unfortunate the draft did not address the problem still. The chambers and the business community still did not reach a consensus on the draft. The Addis Ababa and Ethiopian chambers are in agreement and sectoral associations have also their won perspectives.

Chambers should work only on general issues that represent the common interests of all businesses and the economy at large, aided by sectoral associations formed separately, representing interests of businesses in specific sectors. Thus, the chamber and sectoral associations should be established separately. I do not know the status of the draft proclamation currently, but if it is ratified, it would take another generation to amend.

So, do you believe the Ethiopian chamber should be the all-encompassing strong umbrella?

Not necessarily. My point is the chamber system should be separate from sectoral associations. Whether at local, cities or a national level, chamber must be strong. But they must align. The issue of sectoral associations is completely different. For instance, leather industries have problems that can be solved both through the chamber, and their association platforms. This is the right way.

For instance, there was the Ethiopian Manufacturing Industries Association. It was challenging the government regarding manufacturer’s interests. Its strong momentum even empowered the chamber. Then the EPRDF practically dismantled it. It even prohibited the association from renting an office. The EPRDF regime never wanted such strong associations and chambers. The reason why the government overlapped chambers and sectoral associations is to deny them on common grounds.

If the draft is ratified, it only maintains the problem. Currently, the government’s system prefers individual businesses, than the organized private sector.

So the draft should be revised and discussed again?

The process of crafting the proclamation has problems from its very inception. The chamber members and business communities have no consensus on the draft. The Ethiopian, Addis Ababa, and regional chambers must sit down and discuss on the issue.

The Ethiopian government is trying to allure investments by the diaspora. If the diaspora invest and save in US banks, or in Ethiopia, which return on investment is attractive? Or do you think the government should design incentive packages for the diaspora?

Businesses in Ethiopia are more profitable than other countries. The reason the US government devised AGOA from the beginning, is because African businesses can be profitable. Even in terms of savings, the return in Ethiopia is higher than Europe or elsewhere. The problem in Ethiopia is not on returns, but convertibility. Repatriation might be difficult. Saving in Ethiopia by itself is profitable, let alone investment. There are so many profitable business sectors in Ethiopia. Many sectors are emerging, and not exploited yet.

The other problem is that the Ethiopian diaspora has lost trust in the government back home. So, the current government must reverse that perception, through transparency, commitment and service efficiency.

Thirdly, the diaspora needs information supply on feasible businesses and projects in Ethiopia. Then the diaspora can form share companies, joint ventures, PLC’s or other investment modalities. If the diaspora know feasible businesses and the laws, then they can invest. Currently, the diaspora is placing their money on the stock market and other businesses abroad. They can divert that money to go back home.

Especially, the profitability in the financial industry in Ethiopia is very lucrative; but the government should facilitate currency convertibility. Plus, most diaspora’s in Europe and the US left Ethiopia three to four decades ago. They are at s retirement age now. So if the health system in Ethiopia is improved, most diaspora’s would prefer to go back to Ethiopia.

The diaspora also wants transparent systems to complain in cases of corruption and bad services. There is corruption in Europe and the US. But it is political corruption not work corruption. Political corruption is trying to twist or influence introduction of policies, proclamations or directives. Work corruption is bribing officials, institutions, and public services. There must be a complaint window for this.

The west has been shifting away from Ethiopia and imposed sanctions. Substantial number of Ethiopians vote, especially in the US. Can Ethiopians and black Africans use their voting power to discard unfavorable officials or parties in the US or influence to reverse such sanctions?

The diplomatic system has a more crucial role in this. To be specific, the US faced unprecedented situation in Ethiopia. A government that refuses foreign pressure emerged in Ethiopia.

The US even used the UNSC to pressurize Ethiopia, meeting twelve times within six months. On top of the strong refusal of the Ethiopian government to surrender, the #nomore movement strengthened the support for Ethiopia, rallying Africans behind Ethiopia. The movement is stronger than election powers. The movement eroded US’s credibility in Africa, and in the world.

Even during calls that Addis Ababa will fall to the hands of insurgents, one million diaspora opted to come back home. I believe Ethiopia will regain its rightful place in the international stage.

Unlike any time before, the diaspora is on the same page now, regarding national issues. Before this, the diaspora’s were highly divided and turned against each other. The division created a negative energy. If the diaspora was united before, the EPRDF could have been long gone. The Diaspora and opposition figures abroad were used to strife, not unity.

Can we say that the US’s pressure is normalizing since the tension with China over the horn escalated?

Their strategy differs. The US wants to ensure its interests through political influence, while China does it through investment and economic empowering. The US’s and China’s struggles will continue, whether Ethiopia is there or not. China, Russia, Turkey, Iran and India, to some degree, are joining the friction now. They have certain interests with or against the US.

The US’s fear is not what China will do in Ethiopia, but the kind of measures Ethiopia takes. For instance, Ethiopia’s normalization with Eritrea and the alliance with Somalia is a threat for the US. When the US told Ethiopia to stop the war, Ethiopia rather turned a deaf ear. Ethiopia filled the renaissance dam, when the US opposed it. These are some of the bold moves against US interests.

These moves have nothing to do with China, but they are decisions emanating from the nature of Ethiopians. So, the confrontation between the US and China continues, while Ethiopia strides to protect and implement its national interests fully.

I do not think Ethiopia will completely shift its diplomatic ties towards China. Imperialism is always imperialism, but it changes its face. The US always wants a government that listens to them. If a government refuses to carry out their interest, they depose that government, including assassinations. In cases such as Libya, Iraq and Syria, the US’s footprints in the countries politics can be seen from afar.

The US put the same type of pressures that worked before, and in Ethiopia’s case, it has failed. But the pressure will continue. Ethiopia has passed a major obstacle. Yet, Ethiopia needs to sharpen its diplomacy more.

At what stage is your investment process currently? What are your future plans?

We are establishing the pharmaceutical factory in Ethiopia, in collaboration with highly professional pharmacists, scientists and business people in the Ethiopian diaspora. Finance, knowledge and vision are required to establish a medicine factory. If you have capital, you can buy knowledge, since it is a commodity.

Our vision is to manufacture medicine and medical equipment’s in Ethiopia and provide for Ethiopians. It is not even about profits. We wanted to improve the medicine supply shortages in Ethiopia.

We have been preparing for the past two years. We came to invest in Ethiopia, amidst the rhetoric that Addis Ababa is about to fall. Our team strongly believes in Ethiopia. Currently, we are processing the investment license.

How much is the investment?

The initial investment will take us between USD 20 million to USD 22 million.

What is your conclusion on the soundness of the Ethiopian economy, especially in post-pandemic and post-conflict endeavors?

My first impression when I came to Ethiopia after almost two decades was that all the negative narratives about Ethiopia and Addis Ababa are wrong. There is still an active economy. Across streets of Addis Ababa, day and night, residents are scrambling to buy from street vendors. This indicates to a huge demand in the economy. This is a living economy.

But it does not mean there are no problems in the economy. There is a forex shortage, industrial inputs shortages, logistics problems and others. Yet, the economy has a big potential, especially if public services are improved, corruption is eliminated and bureaucracy is improved.

Do you think the government should maintain protectionism?

The US and Europe are not afraid of protectionism. Why should Ethiopia be afraid of it? Ethiopia is eager to join the WTO. But Europe is still protecting its agriculture. The US is prohibiting import of wood, aluminum and other items, especially trump did everything to protect local industries. So, Ethiopia must also protect its industries.

After America banned Ethiopia from the AGOA, US companies left the Hawassa industrial park. If it is a local factory, they would not do so.

Before, the US’s private sector had no national interest, instead they go for profits. That is why US industries moved factories to China, in search of a cheap labor. But now, the US government is asking them to come back and create jobs in the US.

The country needs a nationalist private sector. The private sector cannot just seek profits and become a pure capitalist. It must contribute to the social wellbeing and development of the country.

Even FDI’s must be undertaken in a joint venture scheme. If it has a local element, the investment can be sustainable.

How can one balance profit seeking versus national interests? Scholars also say the psychological make-up of Ethiopians is not compatible for capitalism.

Corporate governance, labor unions and social responsibility can balance capitalism. National security should be a concern of the private sector. If there is no security, there is no transport, meaning there is no market. Drought should concern the private sector. These make the private sector become a nationalist by default.

One of the major tasks of the Chamber is to make businesses discharge their social responsibility.

Thus, your conclusion is capitalism can work in Ethiopia.

The old way of capitalism, which is seeking only profits, does not exist anymore. Of course, you are responsible for your shareholders and board members. At the same time, you have to be responsible to the society.

Why you are not investing in the banking sector rather than pharmaceuticals?

The government said it opened the banking sector for the diaspora, but still, there are unsettled problems. It said the diaspora had to invest in foreign currency. This is an obstacle.

But the major reason I joined the pharmaceutical project, is because it is a matter of professionalism. Manufacturing is difficult in Ethiopia. We have a big purpose to bring change in the medical supply shortage in Ethiopia. We will produce capsules and tablets. We will also export, once we address the domestic demand. The company will also establish an R&D wing, which will conduct studies for other firms. Most of the founders are also researchers.

Are you a chemical engineer by profession?

I studied chemistry. I also studied industrial chemistry at Bahir Dar polytechnic. I already have a factory in Ethiopia, which produces plastic and rubber. It is expanding now.

Aklilu Wubet is a veteran in the banking industry. He joined Wegagen Bank on March 2020 as the Vice President of Corporate Service, having served in different capacities in many financial companies, including the Commercial Bank of Ethiopia, in the last 25 years. He was also the deputy CEO of Nile Insurance, Bank of Abyssinia and Lion Bank, and also served as a lecturer at Addis Ababa University.

The Reporter’s Samson Berhane sat down with Aklilu to reflect on his journey at Wegagen and the challenges ahead, as the acting president attempts to bring the bank back to its usual top status it has held for the last two decades. Excerpts:

The Reporter: You have joined Wegagen during a challenging time, when it faces decline in revenue from different sources particularly due to the tense political situation in the country. How are things going since you joined the Bank?

Aklilu Wubet: Banking is always challenging, especially in a world where resources are limited. And leadership is critical during a challenging time. Leading a company during its challenging moments is a great task and makes me happy. Especially, if you have strong team, challenge is a good thing. One thing you should also understand is that Wegagen is still a very strong bank, despite the challenges it has faced.

When I decided to join the Bank, I was confident that I would overcome all the challenges by working with a strong management and team the Bank has. The conflict has impacted all commercial banks. Peace is very important for the industry than any segment of the economy since banks deal with liquid resources. The impacts of the war, in particular, were severe on us because we are among the financial institutions with large number of branches in the areas affected by conflict.

When I joined Wegagen, my priority was to help the Bank withstand the impacts of the war. That requires being prudent and to closely work with regulatory bodies, investors and other stakeholders.

In the last 25 years, Wegagen was among the most profitable financial institutions in Ethiopia. Why was it not solid enough to withstand the shock brought on by the war in Northern Ethiopia?

To begin with, the Bank has been effective in withstanding the impacts of the war. Even though the profit is low, and has declined drastically, it is still profitable. It still has a large customer base and a huge amount of assets. Thanks to the strong base, which the bank is built on; it has been successfully coping with the conflict, even though more than a third of its branches are closed.

The profitability of the Bank in the last two decades has helped it build its asset base, enabling it to withstand the impacts of the war. The rules of the central bank and its strong regulations have had its contribution in enabling us to remain strong in such a challenging period.

The strong expense management that we have applied and the strong marketing system implemented by our management team has also contributed to the success of the Bank. If it was not due to such factors, the history of the Bank would have been ruined. But thanks to our efforts, we have defied the prediction made by some, who have forecasted that we will face a loss due to the war. But we are still in a good shape.

We have devised a strategy and are also undergoing restructuring, and increasing the number of vice presidents we have. We are still among the big players in the industry, hiring elite bankers.

According to industry insiders, the bottom line in the banking industry is profits and shareholders’ return. How did you come to the conclusion that the Bank is in a good shape, while its profit dwindled from one billion birr to 193 million birr?

Business is not only about making profits. Business is about being sustainable and staying competitive in an industry. The conflicts, coupled with macroeconomic challenges, have impacted the banking industry last year and banks would have profited much higher than they did, if there was peace.

Wegagen has declared a positive profit, while much of its branches are closed, and at a period when it was not able to collect loans given to businesses operating in war-affected areas. We even held a provision in case of loan defaults. We did not use a penny from the capital invested by shareholders, despite being in the midst of series of challenges. Overall, our objective was to make Wegagen the bank of all Ethiopians, by making it solid. I believe we have been successful in doing that.

There are critics that say Wegagen is a victim of an undiversified ownership structure which exists in the banking industry. Even though Wegagen is not the only financial institution established based on affiliation or along ethnic lines, some say its recent underperformance is an outcome of lack of diversification in terms of shareholders and customer base. Do you agree?

There are those that say banks are established based on affiliation.

Is that not the reality?

I cannot be sure because I have not had a chance to look through the list of shareholders of each commercial bank. In case of Wegagen, the story is different. Wegagen is wrongly misunderstood. If you see its shareholders, no bank is as Ethiopian as Wegagen. Its shareholders are highly diversified. Many big investors from different ethnic backgrounds have a stake in Wegagen. Name any investor and they are a shareholder of our bank. If you see the board, it is highly diversified. The same is also true if you see the management.

Did you bring that change?

No. I was the vice president 13 years ago at Wegagen and it was the same back then.

Okay, but in case of customer diversification, the reality is opposite to what you have said since the Bank’s profit declined drastically, when a third of its branches closed in one region. So is it not obvious that your bank did not work on diversifying its customer base?

Not only in Tigray. We also have many branches in Gambella and Somali than any other private banks. Of course, we have many customers in Tigray but that does not mean our customers in other areas like Addis Ababa are from the same region. We have over 2.5 million customers, way higher than the adult population eligible for banking services in Tigray. That shows how diversified our customer base is.

How about loan disbursement?

It is the same. More than 75 percent our loan portfolio is in Addis Ababa. However, in terms of deposits, the northern part of Ethiopia is known for being a big source. If you go to Mekelle, many commercial banks have many branches there. Some have more than seven or eight branches and the reason is obvious. This is because there is a good saving culture there. But that does not mean we have to work on the business mix because it is important to manage risks.

Then how did your non-performing loans surge because of the conflict if your borrowers are diversified?

We have provided five billion birr in loans to our customers in Tigray. We don’t know whether it can be paid or not because of the conflict. But that is enough to increase our non-performing loans. The whole industry faced similar problems because of the same reason. We held provisions in case of defaults. If it was not due to the higher provision we held, our profit would have been over one billion birr. That would be added to our income in the future, if we recover our loans. This means that we are investing in our future and if things go smoother and peace prevails, we hope things change drastically.

How is the liquidity position of Wegagen Bank? How capitalized is the bank?

We have a strong capital base. It used to be one of the largest in the industry, though some overtook us recently. Understanding its importance, our shareholders decided to raise the Bank’s paid-up capital to six billion birr before the end of the new deadline set by the central bank. We are also thankful that we don’t have a major shareholder because that gives us room for the management to do its job.

Regarding liquidity, when the central bank raised the reserve requirement from five to 10 percent, many feared that our bank would be among those that cannot meet the new threshold. But we are among the few banks that have fulfilled the requirement first. Our liquidity is now over 17 percent. However, that does not mean we are not facing liquidity shortages, because the whole industry is experiencing similar problems due to the sluggish growth of deposits.

Shareholders want to know when the bank would reach pre-war levels in terms of profitability. When do you think that would happen?

There are two assumptions. The first assumption is that the war would stop, peace would prevail and the government puts its energy towards the economy, a scenario which would benefit the banking industry. If peace prevails, our closed branches would be opened. We will be fully operational and our deposits would surge.

The second assumption is that if the conflict continues, we will operate with our existing resources and branches that are active. New banks are joining the industry. So I am sure we can perform better even with our active branches. We have already devised a strategy to mobilize more resources. We are hopeful that we will return to pre-war levels by the next general assembly.

Founded in September 2017, Eshi Express is a pioneer and one of the successful startups in tech-based delivery businesses, in an emerging business frontier in Ethiopia. Tigabu Haile, co-founder and CEO of Eshi Express sat with Ashenafi Endale of The Reporter, to talk about his business journey.

Excerpts:

The Reporter: What was the business pitch behind Eshi?

Tigabu Haile: If you buy an avocado in Yirgalem, it is around five birr per kilogram. But in Addis Ababa, it is around35 birr. So, we believed that Ethiopia needs an efficient logistics system in the supply and logistics service. Even in Addis, we do not see companies that provide end-to-end payment systems, sourcing and delivery services.

Sending packages in Addis is expensive. There are players like DHL, the Post Office and individual motorcycle owners. But Eshi can provide the service up to 50 percent cheaper than the market.

Basically, Eshi is a logistics company. So, how do you manage your fleet? What are the types of services you provide?

We have three types of services. We have Express service, in which we deliver any package in Addis within 90 minutes. The second type is delivery in half a day. If you order in the morning, we deliver in the afternoon. We charge 90 birr anywhere in Addis. The third category is delivery in 24 hours, which costs 70 birr anywhere in Addis.

Our main operation is in Addis. We use vans, pickups, motors and other types of vehicles. Most of the Ethiopian population is in the regions. We believe the logistics problem in the supply chain can be best addressed if we expand to regional states. Currently, we have been in the piloting phase in Adama and Hawassa, since last year. We will reach other regions in the next two years.

Do you own the whole fleet of vehicles?

We deployed the hybrid model. Around ten motorcycles and a van are owned by Eshi. But owning many vehicles is not feasible, so we stopped purchasing vehicles. We launched a technology six months ago, that enables any individual vehicle owner to register to our platform and deliver packages. Our model is called ‘from foot to fleet’. People can deliver on foot. Especially when we have big events, mass publications and other large deliveries many individuals deliver on foot.

How can these individuals or private vehicle owners access your platform? Is the technology similar to a taxi hailing platform?

It is almost similar but slightly different regarding registration system and insurance policies. Huge packages might be damaged in transit by individual vehicle owners. So, we always require courier insurance or insurance for goods in transit, for any private vehicle who works with Eshi.

How many vehicles that are not owned by Eshi are working with Eshi?

Right now we have more than 25 vans, pickups and different vehicles. There are also around fifteen motorcycles.

How many packages does Eshi deliver per day? How do you evaluate the demand?

The demand of the service is huge. There are thousands of delivery demands daily in Addis, while it is in the hundreds of thousands in the regions. The hard task is to make people use Eshi just once. Then they cannot stop using it.

Right now, Eshi delivers close to 115 packages per day. In the next three years, we plan to deliver thousands of packages daily.

How do you see the competition from other players in the market?

There is no really established company we see as competitors. There are legacy players like the DHL, Ethiopian Postal service, and individuals who have motorcycles. It is difficult for many startups to emerge and become competitors in this business.

Online payment, e-tax, e-commerce, delivery and packaging are involved in the business. How are these all done as one business?

Right now online transactions can happen but there are no e-receipts. It is impossible to make online transactions now. Payment is possible for internet and mobile banking. But if you cannot provide e-receipts, you cannot have a complete e-commerce transaction. There are shops that have an online presence. They just show their packages on their sites.

Does Eshi own warehouses or source from other suppliers?

Eshi collects the packages from companies who have warehouses. Receipt is issued traditionally. So, e-commerce is a work in progress. Eshi is the instrument that provides the logistics service. We do not sell any stuff online. Shopping happens between the customer and e-commerce companies. Once the order is placed and shopping done, either the customer or the e-commerce company orders Eshi to deliver the goods.

The number of e-commerce companies has increased since the COVID-19 pandemic. Has online delivery orders increased too?

E-commerce is taking off in Ethiopia and the government is also nearing to ratify the e-transaction law. All Shops will have an online presence. The outsourcing culture in Ethiopia is immature. Most companies want to do the e-commerce and delivery businesses by themselves. One company, especially startups, cannot handle both at the same time. So, after trying both for a year or two, they fail or specialize only in one.

Currently, big global e-commerce players are coming to Ethiopia. Probably they will launch in the next six months. Eshi has entered agreements with these global players, to do the delivery part. E-commerce companies should focus on what they can do best, because they cannot do it all, with limited time, energy and resources. We want to support their job, from the delivery side.

We will have many package drop-off points soon. If the customer is not at home when the delivery arrives, the drivers can place the packages at those points and the client can take it at anytime. This way, we are planning to drop many deliveries within one kilometer radius. This reduces our cost. That is why we charge 50 percent cheaper than the market. One delivery vehicle can cover many shops, pharmacies and supermarkets within an area.

Does Eshi plan to deliver beyond Ethiopia?

Ethiopia will operationalize the Africa Free Trade Agreement (AfCFTA) soon. Intra-Africa trade will boom in the near future. Eshi plans to become a Pan-African Delivery Company within the next three years.

Lack of automated addressing is a major bottleneck to delivery businesses in Addis. How are you solving it?

Absence of digital address system is a major problem for social services, health, banking, census, elections, apart from delivery business. Address is critical. If you do not have an address, you do not exist. Due to the lengthy communication between our delivery dispatches and clients, and usually missing locations, Eshi is losing resources, time and energy. The customer experience is also bad, because it is annoying when delivery personnel call repeatedly to find the address.

Currently, we have a project in the pipeline, named Eshi Locator, with our technology partner. It gives a code to each house’s. The codes are regenerated, when our partner localize using Google technology. We will imbed Google generated codes into our technology. It will take some time. Right now we are using Google maps, to locate the customer. But this has accuracy problems. Many things should improve to solve the location issue. Eshi Locator will be the solution.

What about using GPS locations or networks, if the customer uses a smart phone?

There are four mechanisms to order on Eshi Express. Customers can order on our website, use an application in Play Store, or call on one of our call centers. For Customers who have mass orders, like event organizers, big corporate or ecommerce companies, we have a separate technology platform, which can receive bulk orders and integrate it to our fleet system.

How much is the profit?

We cannot say it is profitable, even after staying four years in the business. At least we have survived, because we could also fail. The global data shows, less than two of ten startups celebrate their fifth year of establishment. Initiating and running a startup is very difficult. Access to capital is one of the biggest problems.

Was Eshi an angel investment?

Initially, Eshi was founded by me and my partner, who has similar business ideas with me. Eshi started with 1.3 million birr. We saved up the capital. We have also advisors. Last year, the Addis Ababa Angel Investors Network invested in Eshi. Delivery business is a capital, technology and skill intensive venture. You need to hire highly talented people. You have to scale-up fast. We hope the profit will come soon, once our delivery capacity grows.

So the angel investors are shareholders now. How much did they inject in the company?

We have an agreement not to disclose the amount. They injected the capital and immediately became shareholders. We gave them equity share worth their capital injection.

So return on investments has not come to fruition yet?

It will take time, especially with startups like us, in which you have to hire huge staff. No question, we are solving one of the top five challenges in Ethiopia. Lack of efficient logistics in the system is a major reason behind the rising inflation in Ethiopia. Food is being wasted because it cannot reach the market. For instance, there is surplus in the southern part of Ethiopia, while it is extremely scarce in the northern part of the country. That is because we do not have a robust logistics system.

Eshi still needs more cash injections to scale-up its capacity. Delivery is not only about packages, it is about the stories behind the packages. For instance the national blood bank of Ethiopia is one of our customers. We deliver blood every day. We collect blood from donation centers to the national blood bank. People are living because of that. NEBE is also among our customers. We did almost all deliveries in the past national election. We are behind the success of many big achievements. We are becoming instrumental in delivery in Ethiopia.

How many institutional customers do you have?

Currently it is close to 35. For instance, we deliver laboratory results for hospitals, on a daily basis. Embassies, hotels, optical shops, are some of them.

What are the incentives provided by the government for delivery companies, such as allowing duty free import of vehicles?

The government is not providing any support or incentive for delivery companies. There were no private courier service providers in Ethiopia, for long. So, only the Post Office and the DHL were known in this business.

For instance, driving motorcycles has been banned under the State of Emergency since some individuals might use motorcycles for crime. But Eshi had hired many staff, branded the motorcycles and there is no way motorcycles registered under delivery companies can be used for crimes. After all, we are delivering critical packages like blood and other essential services.

Secondly, there is an extreme lack of clarity among government institutions, regarding delivery businesses. Especially, the tax authorities are creating major obstacles to delivery companies. The government has no clear policy on delivery businesses, let alone support incentives. The delivery sector could not grow in Ethiopia, because the government has failed to understand it as a newly emerging sector.

There is the Ethiopian Couriers Association, to which Eshi Express is the board president. The association is trying to change the grim fate of the sector. We have submitted a letter to the government, asking the ban on motorcycles of delivery companies to be lifted. But the response from the government is slow.

Motor cycles cannot move after 6PM. So, we are forced to stop taking orders after 4PM. Otherwise, we cannot deliver last minute orders until the next day. This is especially affecting food delivery courier companies, because there orders are largely during dinner times.

What is the government’s response to the associations’ letter?

It has been three weeks since the association submitted the letter. But the government says it is still being considered. The letter was submitted to the Addis Ababa traffic management office. The city transport bureau has also failed to respond.

A new logistics regulation allows up to 49/51 partnership with foreign logistics companies. Is Eshi considering a joint venture with foreign companies?

JV is allowed for logistics companies engaged in sea, air and land transport. Ours is light package and fast delivery logistics. So JV is not allowed for us.

How much does the absence of e-receipts affect your business? How does Eshi cover the costs, if delivery is defaulted?

Online ordering, online payment, and e-receipts are not active at a national level in Ethiopia. Ethiopians consider online shopping, or e-commerce, as a luxury service reserved only for developed countries. That is acutely wrong. Delivery services extremely benefit developing countries. The purpose of e-commerce is to cut expenses and reduce prices. Companies do not have to open shops everywhere. So, it cuts out rental costs. End user customers also usually visit as many shops, to find a reasonably priced good. With e-commerce, you can find any items at your fingertip. You can order a delivery company, saving your time, energy and money.

The progress slows in Ethiopia, because the digitization pace is slow. But the Parliament is currently working on the e-transaction proclamation. The draft document has been under review for a year now. The Ministry of Science and Technology crafted the document and the Council of Ministers has passed it on to the Parliament. It was said that it would be ratified before the current Ethiopian year enters. But I think it is delayed because the government is busy due to the war.

But even after the proclamation is ratified, is there the technology that interfaces with the payment facilitator, end user, delivery companies, shops, tax authority and other regulators?

Eshi has end-to-end technology that enables the ordering and tracking of goods. The technology also enables us to publish the transactions in excel or PDF file formats.

E-commerce companies also have a similar technology. Ethiopia has all the basic ingredients to kick start e-commerce. We have the laws, graduates, and emerging e-commerce companies. The service quality will improve gradually.

Does Eshi use other payment mechanism like mobile money, tele birr and others, apart from e-commerce companies?

So far, our transaction is largely cash-based. But we are integrating with Fintechs like tele birr, CBE birr and others.

The starting price for delivery of a kilogram of package is 20 birr. It increases by12 birr per additional kilometer and three birr per additional kilogram.

How do you evaluate the competition with other emerging delivery companies?

It is difficult to say there is stiff competition. There are delivery companies that participate in bids with us. A lot of institutions like banks float bids for their bulk delivery contracts. There are only close to six active players.

The DHL, the Ethiopian Postal Service and Balderasu are active in Addis, while there are other startups emerging in regional delivery services. The DHL has no interest in the domestic delivery business in Ethiopia, leaving the market in Addis for us. Even in Europe, DHL works with local companies, specializing on the international market rather.

Close to 100,000 packages are delivered in Addis Ababa every day. Eshi, which delivers 115 packages per day, is comparatively better performing, than other players. Yet, the share of delivery companies is completely insignificant, relative to the demand.

All of close to six delivery companies in Ethiopia, including DHL and the Post office, are delivering less than 6,000 packages per day. The market is untapped.

The delivery demand in regional states is much higher than Addis. We have assessed the demand and mapped delivery services in 100 cities in Ethiopia. There is close to 200,000 package delivery demands in these cities.

Who is filling this demand now?

This demand is bridged traditionally. The Postal Service has some market share, but mostly; people send packages via cross-country buses. But this method of delivery has two major problems. First, it has no insurance if the package is damaged and second, the bus owners charge as they wish. Cross-country busses have no standard pricing for delivering packages.

Eshi is 100percent insured. When a client orders Eshi to deliver a package, the customer declares the value of the package. If it is damaged, Eshi refunds 100percent of the value stated.

Do you work with all insurance companies?

The local insurance industry is underdeveloped, thus, local insurance companies usually do not accommodate our insurance packages. So, we cover the insurance fund by ourselves. Eshi has been incurring cost due tothis. But now, we are communicating with insurance companies. All other delivery companies operating in Ethiopia do not have such insurance coverage, except for Eshi.

Is Eshi using its own vehicles for the piloting phase in Adama and Hawassa?

We deploy our own vehicles to deliver high risk packages. But usually, we use private vehicles which have insurance coverage.

Which sectors have high demand for delivery services, is it exporters, households, or wholesalers? And Ethiopia is ranked low on the logistics index. How can delivery companies improve this?

Our business is last mile delivery. We deliver from shops to end users, or consumers. Last mile delivery is the most difficult business in a given economy. One is due to a lack of precise addressing technology. It is also the most expensive logistics system. So the demand could be consumer goods, medication, and invitation or gift cards.

Last mile delivery also creates job opportunities. Millions of youth can deliver goods door to door. So, it is the best logistics sector for job creation. If we could make the delivery price cheaper, it can activate the economy, and affect millions of lives positively. It is a phenomenal sector.

By how much rate is Eshi growing from a startup to a large enterprise?

Our package delivery business size is growing at close to 10percentper month. It is not an impressive growth but we are making good progress.

We plan to grow by 15 percent on a monthly basis. Comparatively, Eshi is growing faster, because most of the delivery companies operating in regional states are highly affected by the conflict in Ethiopia.

How much does Eshi deliver in Adma and Hawassa?

Our delivery in these towns is just a couple of packages per day, for now.

But Blood Bank, the NEBE, Goh Betoch, Nile Insurance, Ramada hotel, hello market, and Ethswitch are some of our major institutional clients across the country. We do cash-up-on-delivery for our customers. We also provide full insurance coverage, which no delivery company does in Ethiopia. We also have warehouse for e-commerce companies.

Does Eshi directly buy goods and deliver?

Usually customers order e-commerce companies to supply the good. Then the e-commerce company orders us to deliver the packages to the customer who has placed the order. Hence,Eshi does not purchase the packages. The package is purchased by the e-commerce company. Since the customer cannot pay online, we collect the payments and give it to the companies, usually on a weekly basis.

If we directly engage in buying and delivering, it will take a huge capital. The e-commerce companies have the packages and the digital presence. I believe e-commerce should be much cheaper. Some e-commerce service providers give up to 15 percent discount, but the business is just taking up in Ethiopia. It is at very early stage.

Eshi does not want to play the role of e-commerce companies. If there are 40 e-commerce companies in Ethiopia, we do not want to become their competitors. Rather, we want to deliver their packages. But if there are packages not found in e-commerce warehouses and if Eshi can find those goods, we can supply it directly to the customer. Under this circumstance, we receive orders of packages worth less than 2,000 birr.

English Version News

Suzuki vehicle prices explode, shaking up the automobile industry

Yoseph Asfaw, a mid-level manager of one of the branches of Bunna Bank, was excited when he learnt he was eligible to take out a two million birr interest-free loan, courtesy of the performance his branch achieved last fiscal year. He did not hesitate to take the opportunity. After a few weeks of deliberation about what to buy with the money, he decided to purchase a vehicle. His choice was the 2022 model of the Suzuki Dzire, the most sought-after automobile in the car market. He was asked to pay 1.5 million birr.

“Are you sure I will recoup the money within a short period of time,” Yoseph asked the car retailer.

“Trust me, give it one month, and the price will surpass two million birr,” the retailer replied.

The trader was right. The price of Dzire 2022 has shot up to 2.2 million now, a development that helped Yoseph net a profit of 700,000 br in just a month. “You cannot get this money by saving or opening a trade store. And not surprising at all, given the volatility of the market,” said the banker, adding, “I don’t want to sell it as this is a treasure whose value appreciates every second, and the most profitable venture without adding value.”

It is not unusual to see the price of vehicles spike in Ethiopia. Cars are believed to be a big treasure, the same way apartments or houses are. A car costing less than USD 2,000 in neighbouring countries, the Toyota Vitz, costs nine times more in Ethiopia. The high tax on old cars, which could reach 500 percent, was used to justify the hike. Though the same is true for old cars now, the story is different in the case of new vehicles, a category given to automobiles produced within three years of imports.

Three years ago, the government introduced a new tax law to encourage the imports of new cars while discouraging the old ones. Such a reform was meant to make new cars cheaper, though it was a target that never materialized. A case in point is the Dzire 2022, an automobile imported through a duty-free scheme and flooded the market, along with other brands of Suzuki, including Espresso and Swift.

Toyota is still the dominant player in the vehicle market, though traders say Suzuki is now commanding the lion’s share, probably as high as 60 percent in the last two years. It is partly because the cost of new Toyota vehicles is higher than in the past, as older ones were less costly. For the same reason, Suzuki is the most preferred brand for importers now because the lower the cost, the lower the amount of foreign exchange importers needs to get.

“We get the forex from the parallel market with a premium, as banks barely cover the cost of the imported cars. Suzuki has become a preferred option for many importers as it is less costly and brings a better return with a higher profit margin than Toyota, which is expensive and requires a tiresome process to get the forex needed to import it from countries like Dubai,” said an importer.

Last year saw a spike in demand for new vehicles, largely due to the huge amount of finance availed by banks to borrowers eligible to take a loan to buy automobile. During the third quarter of the last fiscal year, 330 million birr was imported, twice what was imported in the preceding quarter. It is also 20 percent higher than what was imported during the same period in 2020/21. The increase is the outcome of the growing demand in the market, according to retailers. But that comes with a cost.

“The demand is way higher than the supply. We are receiving orders more than what is available in our stock,” said Ezra Hailemariam, marketing manager of Tamrin, one of the major market players in the car market and known for importing Suzuki brands.

The change in the global market has also contributed to the spike in price, according to Ezra.

“Over 90 percent of Suzuki cars are imported from India, which is not producing much now due to a shortage of inputs because of the tension between China and Taiwan, which is the major supplier of semiconductors for the factory in India,” Ezra added.

According to a senior company official, Maruti Suzuki said “it could not produce 51,000 units in the April-June quarter owing to the ongoing chip shortage situation.”

India’s largest carmaker, which sold 1.4 million vehicles this year, underscored that the semiconductor shortage is a challenge in planning its production activities.

“The electronics component shortages are still limiting our production volumes. In this quarter (Q1), the company could not produce 51,000 vehicles,” said Maruti Suzuki India (MSI) CFO Ajay Seth in an interview with a local media in India.

The scope of the fighting between government forces and militants of the Tigray People’s Liberation Front (TPLF) along the border of the Tigray region has widened with both sides acknowledging that the conflict has spread to more areas in addition to the area where it initially erupted. The fighting between government and TPLF forces resumed on August 24 after a five-month lull. Though combat had been heaviest around the southeastern border of Tigray, TPLF militants have pushed into the neighboring Amhara and Afar regions, sending residents fleeing. Clashes on the ground and air raids over Tigray have poured cold water on the efforts underway since June to find a peaceful solution to the 21-month war that began following an attack on federal army camps based in the region. The warring sides have accused each other of firing first and shattering the months-long relative calm that has been prevailing in the northern part of Ethiopia following the federal government’s announcement in March of a truce to allow humanitarian aid to be delivered to Tigray.

The federal government has also blamed what it calls the west and Ethiopia’s “historical enemies” for using the TPLF as a Trojan horse to advance their evil design on the nation. Ever since the administration of Prime Minister Abiy Ahmed (PhD) commenced a military operation in Tigray in November 2020 in response to attacks on the Northern Command of the Ethiopian National Defence Forces (ENDF) the country has been subjected to unprecedented pressure at the hands of Western governments, the U.N., mainstream media, think-tanks and rights groups. The U.S. particularly has sided with the TPLF, slapping a slew of sanctions on Ethiopia and withdrawing its benefits under the United States’ tariff-free African Growth and Opportunity Act (AGOA) while it gave the TPLF a slap on the wrist. Furthermore, the U.S. and its allies at the U.N. Security Council have tried over a dozen times to formally admonish Ethiopia but failed thanks to the vote of China, Russia and India. Apart from exerting undue diplomatic pressure, the West has also been waging an information warfare against Ethiopia through a disinformation campaign undertaken by the mainstream media, think tanks and so-called rights advocacy organizations. Its end-game, as some analysts plausibly argue, is to engineer a regime change or if that does not work to coerce Prime Minister Abiy’s administration into accepting to the demands of the TPLF.

It’s not only over the Tigray conflict that the West is pressurizing Ethiopia though. The filling and operation of the Grand Ethiopian Renaissance Dam (GERD) has been a bone of contention between Ethiopia, whose highlands supply more than 85 percent of the water that flows into the Nile River, and the lower riparian states of Sudan and Egypt. In 2020 the U.S. tried to force Ethiopia into signing a binding agreement on the filling period. The Ethiopian government declined to sign-off a U.S.-drafted agreement regulating the filling time of the dam, which Egypt insisted should be completed over 12-21 years, saying it has the right to fill the dam at its own pace and would do so in no more than seven years. Although Sudan initially supported the building of the dam, since then it has taken Egypt’s side on the ground that filling the dam without the agreement of downstream countries imperiled its national security. Again the Security Court, at the behest of Egypt and Sudan, convened on several occasions to consider a resolution calling on Ethiopia to cease filling the GERD’s reservoir and pushing for a binding agreement between the three sides on the operation of the dam but failed to adopt it.

The West’s motives driving its pressure campaign on Ethiopia, its long-standing regional ally, are purely self-centered and zero-sum. It is wary of Ethiopia’s pursuit of an independent foreign policy, which may very well frustrate the accomplishment of its strategic goal in the Middle East and Africa. First, Ethiopia’s apparent reluctance to do toe the West’s line has been perceived to make it harder to protect the interests of Egypt—the cornerstone of its Middle East policy. Second, its attempt to thread a needle as animosities between the West and China ramp up is not appreciated by the West, which feels threatened by Beijing’s growing clout on the global stage. Given Ethiopia has been a beacon of black Africans’ struggle for freedom and could inspire continental resistance to neo-colonialism, the West might deem that forcing Ethiopia to forsake China is instrumental in containing the influence of its top geopolitical rival in Africa.

The West better realize that the essentially undemocratic and unipolar global world order that had prevailed over the last several decades following the end of the Cold War is ebbing. As a country that has never been colonized and is home to a fiercely patriotic people, Ethiopia will never cave in to the West’s demands. Needless to say this requires on the part of the federal government to develop and implement a robust diplomatic policy aimed at nullifying the threat posed by its historical enemies through a variety of tried and tested mechanisms. Some of the steps it can take in this regard include forging a compromise with its adversaries where possible and failing that to foil their destabilizing policies and measures. Ethiopia has the capacity to find a resolution to the political crisis engulfing it. Any nation or organization which has its interest at heart should stop meddling in its domestic affairs and instead support it in seeking enduring solutions.

The abrupt eruption of fighting between government forces and militants of the Tigray People’s Liberation Front (TPLF) along the border of the Tigray region this Wednesday has left Ethiopians apprehensive and disheartened. The resumption of active hostilities shatters the months-long relative calm that has been prevailing in the northern part of Ethiopia following the federal government’s announcement in March of a truce to allow humanitarian aid to be delivered to Tigray. Predictably the warring sides have blamed each other of provoking the hostilities. The Ethiopian government has accused the TPLF of striking first, saying it had “destroyed the truce”. In a statement it issued on the same day the Government Communications Service said, “Disregarding the numerous peace options presented by the Ethiopian government, the armed wing of the terror group TPLF, pushing with its recent provocations, today committed an attack” around southern Tigray. The TPLF though has said government forces and their allies had launched a “large scale” offensive towards southern Tigray early Wednesday after a months-long lull in fighting, adding its forces were defending their positions in the southern front.

The lead up to the current round of conflict portended the escalation of the now 21-month civil war. War drums were repeatedly being beaten with all the sides in the conflict issuing statements pointing to the outbreak of an impending war. The TPLF said on several occasions that the peaceful path to resolve the situation was not working and that it was considering “other options.” The government of Ethiopia on its part accused the TPLF of engaging in extensive military mobilization in preparation to restart the war and called on the international community to condemn the terrorist-designated organization and dissuade it from its ill-fated move. The government of neighboring Eritrea, whose troops have been operating in Tigray since the war began, also pointed the finger at TPLF for plotting to launch attacks on the country to reclaim lost territory.

Since November 2020, the bloody war has exacted a heavy humanitarian toll and ravaged the nation’s economy. In addition to the tens of thousands killed and injured, millions more were displaced, psychologically traumatized and left needing emergency food assistance. Social and economic infrastructure has been totally or partially damaged, including schools, universities, health institutions, and other facilities in the Tigray, Amhara and Afar regions. The economy has taken and continues to take a battering. Its growth, which stood at around 10 percent annually before the conflict, has contracted by half; scores of industries have been damaged while some investors have suspended or totally quit operations, resulting in a surge in unemployment; the undoubtedly huge sums of foreign exchange the war has eaten up has contributed to its dearth at levels rarely seen before and to driving inflation higher. Although it’s difficult to quantify the true cost of the war, the destruction is sure to have cost Ethiopia billions of dollars.

The renewed conflict comes as efforts underway since June following the establishment of a government-appointed committee tasked with starting peace talks hit a snag. The government’s announcement in late July that it was ready to hold talks with the TPLF “anytime, anywhere” and the TPLF’s expression of its willingness to ending the war through peaceful means raised the prospects of peace. The apparent readiness of the two parties to engage in peace talks was hailed as an important initiative locally and by the international community. However, both sides have laid down preconditions that they say must be met prior to the commencement of talks—the declaration of a formal cessation of hostilities in the case of the Ethiopian government and the resumption of basic services to Tigray by the TPLF. They also disagree on who should lead negotiations, with the government demanding that the African Union oversee the process but the rebels insisting that outgoing Kenyan President Uhuru Kenyatta should chair it. While we are not apportioning blame here it’s disappointing to say the least that war has broken out again due to the inability of political leaders to do whatever is necessary to prevent it.

War is generally regarded as something that cannot guarantee a win-win solution to political conflicts. This said some contend that war is not necessarily the worst option as long as it fulfills certain considerations that lend it moral acceptance. Critics, however, argue that all war is essentially indefensible regardless of how justifiable the cause behind it may be. They also attempts to justify a particular type of war as being just serve to rationalize violence instead of constraining it. Philosophical differences aside, many agree war is a failure of imagination. Ethiopians have had enough of the internecine conflicts that they have endured for centuries. The blame squarely lies with political leaders and elites bereft of the desire to settle differences through constructive dialogues. In any kind of armed conflicts it is innocent civilians who bear the brunt, not their architects. That’s why the Ethiopian government and the TPLF need to immediately stop fighting and thrash out a durable peace accord at the negotiating table. Let’s not go back to square one!

Hopes of a negotiated political settlement to the war that erupted in northern Ethiopia in November 2020 following the attack on the Northern Command of the Ethiopian National Defence Forces based in the Tigray region by the forces of the Tigray People’s Liberation Front (TPLF) have been high ever since the Ethiopian government established in June a committee tasked with holding peace talks. The government’s announcement in late July that it was ready to hold peace talks with the TPLF “anytime, anywhere” and the TPLF’s expression of its willingness to ending the war through peaceful means, albeit the fulfillment of certain preconditions, led many to believe that peace was finally within Ethiopians’ grasp. The apparent readiness of the two parties to engage in peace talks was hailed as an important initiative in bringing a conflict that has exacted a terrible toll on the country and its people to an end.

Efforts to start the peace talks seem to have hit a snag lately though. First, this week the Main Peace Committee—the committee the Ethiopian government established to explore the possibility of talks with the TPLF—declared while announcing it had drawn a “peace proposal” that the resumption of basic services to the war-stricken region was contingent up on the creation of an enabling environment once a formal ceasefire is concluded. Meanwhile, the TPLF immediately dismissed the committee’s statement as “obfuscation”, blaming the Ethiopian government for openly defying “their oft-repeated promise to take measures aimed at creating conducive environment for peaceful negotiations”. It further accused it of “taking provocative actions against [Tigrayan] forces” and warned that “it will be solely responsible for the eruption of a second round of war that will lead to the total destruction of the country”.

The condition laid down by the Main Peace Committee in a statement it issued, namely that the declaration of a formal cessation of hostilities is a prerequisite to resume the provision to Tigray of, among others, electricity and telephone services belies the Ethiopian government’s recent unambiguous assertion that it was committed to hold negotiations without any precondition and as such represents a step backwards. While the committee has legitimate security concerns regarding the safety of federal government employees that need to be deployed to Tigray in order to restart the basic services, it should also be mindful of the fact that the continued disruption of the services only serves to exacerbate the plight of ordinary Tigrayans, not the leadership of the TPLF. It needs to demonstrate in deeds its avowed commitment to alleviate the suffering of citizens in the conflict-affected parts of the Tigray, Afar, and Amhara regional states. On its part the TPLF must stop beating the drums of war in the realization that throwing around belligerent statements is counterproductive to peace-building endeavors and just prolongs the ordeals of the very people it claims to stand for.

A host of hurdles stand in the way of the proposed talks. TPLF forces still occupy parts of the Amhara and Afar regions they invaded. Similarly, the Amhara region has ruled out negotiating over the fate of areas its forces wrested from Tigray soon after the war erupted, arguing they were forcefully incorporated under the Tigray region in 1991. The continued presence of the Eritrean troops in some of the territories they occupied in Tigray poses a challenge that complicates negotiations. Moreover, disagreements over who leads the mediation process—the African Union (AU) as the Ethiopian government insists or Kenyan President Uhuru Kenyatta, the preferred choice of the TPLF—can torpedo the entire process.

Trying to bring about a complete end to the fighting in northern Ethiopia followed by a political settlement which leads to a lasting peace is an arduous task to say the least. Nevertheless, no price is too high to pay for peace. Now is the time for the warring parties to show a genuine determination and commitment to peace. The deep-seated antagonism between the two sides understandably makes it difficult to strike a peace deal. Engaging in dialogue and making the necessary compromise requires more courage than continuing the war. Embarking on a peace process should not be about total victory for one party and a defeat for the other. It is about achieving an outcome in which all the protagonists and more importantly the people of Ethiopia emerge victorious. For the sake of Ethiopia and its people the Ethiopian government and TPLF must recommit themselves to peace.

The rule of law is a mechanism, process, institution, practice, or norm which strives to ensure that no one is above the law, everyone is treated equally under the law and held accountable to the same laws, there are clear and fair processes for enforcing laws and human rights are guaranteed for all. Ethiopia has the sad distinction of being a nation with a checkered track record when it comes to upholding the rule of law. Among the different metrics by which a country’s overall rule of law performance may be measured, Ethiopia has particularly fared badly in assuring order and security as well as respect for fundamental rights. The act of turning back some people travelling from the Amhara region en route to the capital Addis Ababa constitutes a clear example of the latter.

For over three weeks now security forces in the Oromia region have been preventing citizens travelling by cross-country bus from the North and South Wollo zones of the Amhara region to the capital through Oromia from getting to their destination if they do not carry a residence ID of Addis Ababa. Federal government officials claim operatives deployed by the terrorist Tigray People’s Liberation Front (TPLF) were recently arrested while trying to infiltrate Addis Ababa using residence IDs and administrative seals it had looted when it occupied some parts of the Amhara region, adding the measure is part of a security operation aimed at thwarting the evil designs of the terrorist group. True, a government’s primary responsibility is to protect the safety and security of citizens. Nevertheless, care must be taken to ensure that the manner in which any operation to ensure law and order does not trample basic liberties enshrined in the constitution.

One such right is freedom of movement. Article 32 of the constitution stipulates that any Ethiopian or foreign national lawfully in Ethiopia has, within the national territory, the right to liberty of movement and freedom to choose his residence, as well as the freedom to leave the country at any time he wishes to. The Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights, and the African Charter on Human and Peoples’ Rights — the international instruments Ethiopia has ratified and in conformance with which the fundamental rights and freedoms specified in the constitution must be interpreted — also afford protection to this right. Absent a duly declared state of emergency, there can be no justification for the indefensible prevention of Ethiopian citizens from enjoying their freedom of movement on the ground that they pose a potential security threat.

Aside from flouting the rights to liberty of movement, the action of the Oromia security forces has other troubling ramifications. First, it creates a perception of discrimination and ostracization in the individuals victimized by the travel restriction. Moreover, the fact that they are unable to travel to their intended destination entails damaging economic and social consequences for them. This is liable to sow the seeds of resentment and down the line to political conflict. Second, it encroaches on the federal government’s constitutionally granted power to regulate major roads linking two or more regional states. Such intrusion into the federal government’s exclusive preserve sets a bad precedent for other regions. In short it spells danger for the integrity of the constitutional order and the rule of law.

Freedom of movement is a fundamental right all levels of government must respect. Any perceived security threat its exercise may pose should be handled in a manner that does not result in the violation of the right and subjects innocent citizens to inconvenience. There can be no sugarcoating the fact that the act of preventing certain classes of people from travelling to wherever they want is an unequivocal infringement of not only freedom of movement, but also the right to equality. As such it is incumbent on the federal, Oromia and Amhara regional governments need to hold consultations on ensuring that everyone travelling from the Amhara region via Anwar Soussa has been the Managing Director (MD) of Safaricom Ethiopia since July 2021. He was the Managing Director of Vodacom DRC and the Chairperson of Vodacash (M-PESA), a position he has held since 2017 until joining Safaricom Ethioia. During his tenure, Vodacom DRC made major strides in operational performance, crossing the USD half a million in service revenue mark for the first time in 2020. The Reporter’s Samson Berhane sat down with him to understand his new beginnings in Ethiopia.

The Reporter: First, tell us about your journey in the telecom sector.

Anwar: I have been in the telecom sector since 2006. But I started in the technology sector since 1996 in Montreal, Canada. I joined Safaricom Ethiopia, the project, when I was in Vodacom in Congo. I was a CEO there. My experience perfectly suited for this type of operation.

Safaricom has been preparing for more than a year to launch service. Why did it take so long? What were the problems that you have faced while doing so?

I don’t call it a problem. I call it a challenge. Initially, when we come into the market, the idea was to launch using ethio telecom infrastructure. That agreement took longer than expected to finalize. As a result, we choose to build our own towers. We did not want to wait. To build towers, you have to find land, import materials like steel and find cement as well as hire sub-contractors. That means you need more time than the initial plan. That is the real reason why it took longer than expected to launch service. Now, we signed a deal with ethio telecom and things are gonna move faster.

Tell us about the detail of the deal. I heard you are going to pay in both local currency and USD to lease the infrastructure of ethio telecom.

I am going to keep the deal private because that is between us and ethio telecom. But there is a dollar component. The reason is, as well all know, there is a forex shortage in the market and to prepare a site for us, they are required to import materials from abroad. We recognize that. We agreed to make the component in dollar for them to make the site ready for us.

So, the negotiation is now over?

Ethio telecom has been a very good partner. The CEO, Frehiwot, has been gracious in terms of engagement with us. Everything is proceeding well. The delay was due to operational issues. How many juniors were available? How fast we can get steel? How fast we can upgrade the site? All of these are operational issues.

When you launch service in Dire Dawa, you have used your own infrastructure.

That’s correct. When we launch service, initially, we are using our own infrastructure. But as we move forward, we will be sharing infrastructure of ethio telecom and build our own in the meantime.

Is there any change in equity contribution of shareholders in Safaricom Ethiopia? Some say, there is. Is that true?

No, there is change.

As Safaricom is listed in the stock market, a change is expected when something new happens. Have you seen any change recently after you launched service?

I don’t think it is possible for you to attribute any change to a certain element. The reality is the World’s stock market has been very volatile over the past six months. There is a war and a global recession coming in. Certain things happening are way beyond the control of a certain company or what we do here in the ground.

What should Ethiopians expect from Safaricom? Many hope Safaricom will come up with a better quality of service with a lower fare.

The pricing move from ethio telecom last year was very strong. They brought down massively. I am not sure if it will be possible to bring down price from what is in the market now. However, in terms of quality, my expectation is that the quality overall in the market will improve. And the reason I say that is because we are setting up a new network and ethio telecom, or the competition, will not stay still, I expect they will bring the best game in the table. Quality of service, both in technological level and in customers’ service, will be improved massively. How customers’ complaints are going to be taken care of? I think these are areas where you see a major improvement.

The price that you are charging is almost similar with ethio telecom. Do you think you can be competitive in the market, while charging the same price, as people expect a lower fare from you?

The price for voice is one of the most aggressive in Africa. And I don’t think there is a room to drop voice prices. So do I think we can be competitive? Yes, I do. The most important thing we want to flag is that we don’t want a price war with ethio telecom. If we start a price war, that means they will automatically react. There is no way there is going to sit by and see us dominate the market because our price is cheaper. I think that will a detrimental impact on the market, not only on us. I don’t think you see a change in terms of price.

The infrastructure deal took more time than you anticipated. The global market is not helping too. Did you make any change in your financial targets, considering the challenges you have faced since you secured the license to operate in Ethiopia? For instance, do you still think it is possible to achieve breakeven within five years, as outlined in your initial plan?

Yes, I do think so. I think the biggest challenge is the global inflation. The price of fuel is increasing. The same is true for cement and steel. All these things are going to be more expensive. I think this element of the business will be very challenging. Yet the plan is still to breakeven within four or five years. But we have to pay attention to the cost.

You are investing heavily in infrastructure development. And can you tell us how far you have gone thus far?

We will continue to invest with the money that we allotted when we started the business. Some places are easier. Addis is easier than the regions. This is because there are a lot of buildings to put on the antennas. So it is simple to deploy in Addis than other areas.

If it is easy, why did you first launch service in Dire Dawa?

That is a small town. It requires fewer sites. It is easy to optimize. The network rollout was very fast.

How long it would take to launch service in Addis?

Six weeks. We believe there is a massive opportunity in the capital, in every element. I have been working in 12 countries. I never had been in a country where a single company dominates everything. The market will be split.

Is there any place that you want to capitalize on, especially an area where ethio telecom has a little presence?

That is a nature of businesses. You grow until there is no place to grow.

How long it would take for you to be independent from ethio telecom?

I don’t think we want to be independent. The reason I say that is because old days where everyone builds its own infrastructure are gone. You have to share infrastructure. That makes more sense because that does not have any impact on your competitiveness. Why do you build a fiber where there is a fiber? That will be a waste of money.

There has been a social media outcry against your recruitment process. What is your reflection on this?

To be honest, I think it was not only on the recruitment process but also on the language we are using. It was also about distributors and how we are allocating distributors across regions. It was also about the religious mix of what we have in the office and what we have employed everywhere. There were a bunch of requests the activists raised with us. So, we did not respond immediately because we were supposed to understand whether these are true or not and see ourselves if there are problems. To be honest, I don’t think the problems are as acute as people are saying. What they did say is to be careful. For instance, if we go to Oromia, we have to use Afan Oromo. We have to pay attention to laws. We have put signs saying coming soon. It was us not being sensitive. We met guys behind the campaign. They were very moderate. None of them want to hurt Safaricom. They want what we do to be fair. They did not make extraordinary demands. That’s why we are comfortable to engage with them. I understand we have to be sensitive to the history, the culture and the current politics without going too far. It has to merit-based. Everybody coming to the company should be the best of the best. We have received a lot of advises from the government. All of them said “you must choose the best but be careful.”

Do you think it is possible for Safaricom to apply meritocracy in light of the current situation in Ethiopia?

I think there has to be a meritocracy. The qualification of the candidates has to be there. There should be no compromise. However, as we choose candidates, the priority must be given to the people within the region. It is not appropriate to start shifting from one region to another. Not because of other issues but language considerations are critical. People have to speak the language of the area where they are working.

Now let us talk about mobile money. I know you are in the process of launching M-Pesa here. Do you see any progress from regulatory body in introducing a legal framework to govern the sector?

The legal element is going fine. I think it is gonna be available very soon. Our shareholders are engaging with the government. From operational perspective, things are going well. We have put the app in place. We have put configurations in place. Everything is in a good shape. In technically perspective, we will be ready to launch service in the next three months.

The approval process of the bill may take another three months. Do you think that will have an impact on your plan?

No. We got so much to do. We have 25 cities to cover. We have massive network to build.

Do you think you can repeat the success of M-Pesa in Kenya here in Ethiopia?

Absolutely. Kenya is particularly amazing story. Wherever we launched M-Pesa, we were successful and we are leading the market. So we don’t see any way it is not going to be successful in Ethiopia.

Ethio telecom is already advancing in the mobile banking market. Are you expecting fierce competition when you launch M-Pesa?

I do expect very strong competition. They have done a great job in recruiting customers and strengthening the network.

From what I have observed, ethio telecom is taking an advantage of its link with public offices to facilitate payments in the public sector? Have you get any promise from government officials whether you will get the same opportunity when you launch M-Pesa?

We are talking them to now. There is no one said we are not going to get this opportunity. Yes, they had a one year head start. They have done great job in services they have launched. Yet I believe we can catch up.

How is the war in North Ethiopia affecting you?

We have a huge amount of work to do. I think it will slow us down in certain areas but we will continue doing our work in other areas. But everyone is sad to see the resumption of conflicts.

Are things in place to launch service in North Ethiopia, particularly in Tigray, if the war ends?

We will be ready as soon as communications are stored and get the blessings to go back in. We want to reach all over Ethiopia.

My last question is on repatriation. Many international companies usually complain about the difficulty of repatriating profit in Ethiopia. Some say it takes over a decade. How is your plan in that regard?

Repatriation is not a big issue. The issue is finding dollar to buy equipment after the investment window closes. After our money runs out, we need to get forex to buy equipment. Regarding repatriation, we knew the issues when we came. If it takes 10 years, it takes 10 years. We gonna be here longer than that. Of course, we want to repatriate but we are here for long term.

Oromia without fear that they will be turned back before getting to their journey’s end. Given upholding the fundamental rights laid out in the constitution is vital to assuring the very survival of Ethiopia as a cohesive polity, overstepping the constitution in the name of containing elements bent on wreaking havoc cannot and should not be tolerated. That is why it’s imperative to put an immediate stop to the blatantly unconstitutional violation of freedom of movement and see to it that it’s not repeated ever again. Goitom Tsegaye is deputy chairperson of Arena Tigray, an opposition party popular in Tigray. He has been voicing his concern over the war in Tigray since it broke out almost one and half years ago. The second time the conflict started, Goitom found it heartbreaking. He thinks that in carrying out the eagerly anticipated negotiations between the two warring groups, the African Union did not fully fulfill its obligations to the organization. The Reporter’s Selamawit Mengesha sat down with the opposition leader to get more of his perspective on the recent resumption of hostilities.

The Reporter: Let’s start with the war that erupted anew this week. Before the battle resurfaced, there were talks of a peace agreement. Is there still hope for negotiations?

Goitom: It is heartbreaking that the dispute has resurfaced this week. Since it began, there is a potential that it will continue, although much will be lost if it does.

War’s casualties are well known, and hopefully we have a government that cares enough about its people to put an end to it. They should have learned from their previous mistakes and avoided them, in my opinion.

Both parties demanded that mediators be appointed. What was the reason the two parties couldn’t agree on who should undertake the mediation?

Essentially, I believe there is one thing we should all remember: everyone must be fair and impartial while looking at things.

In a war, not everyone carries a weapon, but what we’re seeing in Tigray is people lacking necessities such as banks, water, transportation, telephones, and electricity.

We were taught to believe that these services were destroyed during the war and that the government was unable to repair them, but it is now clear that this was not the case all along.

According to the Tigray regional government’s discussions with the EU, the federal government is leveraging these necessities when it could simply provide them to the people; it’s using them as a weapon of sorts.

War has laws, but the warring side is separate from the people. The people of Tigray are also Ethiopian citizens; hence the administration is harming its own people. Personally, I believe it is not the best way to proceed.

I believe that the federal government should have learned from its failures from the beginning. I don’t think initiating a full-fledged war with the TPLF was the best course of action. Instead of attacking, it should have been defending.

It was not a prudent move, especially with other powers involved. What I mean is that the items the Tigray regional government is requesting from the federal government are essentials for the people.

Both parties bear responsibilities for doing the right thing by the people. I’m not sure why it’s framed as a difficult choice. It is for the people of Ethiopia; hence the government should have established a consensus for its people by now.

To return to the subject of the negotiations, the government already pledged to begin them without any preconditions. However, the offer was to negotiate solely with the TPLF, without including Amhara, Afar, or even Eritrea. Do you think these groups should have been taken into account during the negotiations?

I believe the government’s strategy was flawed from the start. We’ve observed unlawful acts such as Tigray transferring land to Amhara with the assistance of other forces, so what has the Amhara area lost from Tigray?

We’ve heard on several times, particularly in the case of Welkait, that the region is attempting to reclaim their land. Is it even their land is the question?

The structure of the regions, in my opinion, is fairly apparent.

I say this because there was a region called Show that later became part of the Amhara and Oromo region, a place called Bege Medhir became part of the Tigray and Amhara region, and if Welo became part of Afar, Tigray, and Amhara, then there is really nothing new that happened between Tigray and Amhara, unless there is a belief that if I am living here, there is no one else there, which in that case makes comprehension difficult.

Ethiopia and its land are inextricably linked, so stating the land was mine and I want it back makes no sense to me. Questioning the demarcation system is understandable, just as arguing “using language as a way of defining regions is wrong,” but claiming land in the same country is not.

Ethiopia’s land is reserved for Ethiopians. Sitting and talking with Tigray and the federal government makes sense because the government is clearly offending Tigrayans and requires mediation.

Because Eritrea was involved in the attack, having Eritrea participate in the talks makes more sense than having the Amhara region participate in the talks.

Understanding this, I believe, is critical.

As a representative of Tigray, Eritrea and the federal government should have discussed Bademe and other issues. However, in actuality, the federal administration has not been representing the people and territory of Tigray.

Negotiations have been attempted by international groups. We’ve seen people like Obasanjo come to the country and make attempts, and many people were optimistic that the talks would take place. Do you believe the conflict resurfaced because those bodies failed to carry out their duty properly? Or do you believe they carried out their responsibilities correctly?

I believe we should have taken the initiative.

Both the federal government and the Tigray regional government should have demonstrated interest in the negotiations from the start; only then could other groups assist in getting the talks started.

According to my knowledge, they did not fulfill their obligations, particularly the African Union. Aside from creating articles and laws, I do not feel the AU has a consistent and capable ability due to one of their articles; Article 2H, titled humanitarian integration.

Although the article has been ratified, the Union lacks the resources to put it into action. According to that provision, the Union has the right but not the resources to intervene in cases of humanitarian rights breaches.

For example, the AU did nothing to address the Tigray situation; there were words but no action. For these reasons, I didn’t have high hopes for the AU. It still has a long way to go, in my opinion.

Other international organizations with influence and power have their own military intervention regulations as well. The west has previously attempted to exert pressure on the administration, but international organizations such as the EU and countries such as the US are preoccupied with other matters such as the Ukraine-Russia war.

They have the ability, but their focus has been diverted away from Africa. They, too, lack consistency, as evidenced by their actions in Ukraine. As a result, I don’t believe they’ve done their part

They have the power and capability, and yet here we are.

Who do you believe is to blame for the re-ignition of the war? Could the difference in negotiation beliefs be the cause, or do you believe the absence of the Welkait and Humera concerns is a contributing factor?

As I stated at the outset, if we refer to the Oromia area, we need to know which cities and counties comprise that region. That is, the problems of Tigray and Welkait should not be a problem. I cannot argue that the requirement should not be met because the federal government granted the land without Tigray’s approval and is now requesting that Tigray accept it.

People who lived there before are now refugees. People are unable to use their own funds because banks are closed. All of these difficulties should be considered as prerequisites.

It’s not difficult to grasp, even for the federal government. People are hungry, so shouldn’t that be addressed first as a prerequisite before any negotiations begin?

I cannot accept the idea that there are no prerequisites. Negotiations would be conducted with a boot on the people of Tigray if those demands were not met.

I don’t have any information on who restarted the war. To be certain, I would have to live there. I am like everyone else, listening to all sides’ arguments.

What will the people of Tigray face if the fighting continues? You’re already aware of the issue. What do you think about the present humanitarian crisis?

I don’t believe that anything positive can come from conflict.

War will take innocent lives, destroy property, and deplete the economy, and what could be worse than that? Tigrayans are at a significant disadvantage.

They are under attack from their own government, former foes such as Eretria, and adjacent territories such as the Amhara region. It’s painful to see how something that should have been resolved amicably has turned into an injustice against the people of Tigray, which is also an injustice against the rest of the country.

Hopefully, people will realize this soon. I’m sure there will come a day when our empathy will be tested. Ethiopia will pay a high price as a result of the conflict. In the war, there are no winners, but all are losers.

Do you believe the constitution can deescalate and resolve the conflict? What are your thoughts on the matter? Is it possible to resolve the disagreement based on the current constitution and the new statute established by the federation under which regions could decide directly to be regions?

There aren’t enough people organized to hold a referendum. Furthermore, Tigray has no representatives in the House of Federations. How will Tigray make its case? Who will be Tigray’s representative?

At this stage, it would be child’s play; the most serious offenses have already been committed. Atrocities in violation of the constitution have occurred. International agencies have branded it ethnic cleansing, and some have even called it genocide.

So this is pretty strange. On paper, the constitution is just and fair, but its implementers are not.

Is it truly conceivable to exclude Eritrea from the war in the future if Eritrea’s government refuses to withdraw its troops? Will their departure solve the problem in any way?

I believe we must consider how they got to be involved in the war.

Did the federal government request that its troops participate? Was the Parliament able to represent them? I mean, there are multiple options, right? Who delegated authority?

These points must be addressed first.

It would be pointless to question something that has no legal foundation. Was a formal agreement reached between the Ethiopian government and President Esaias? If so, what were the terms, and where are the documents?

Is it even conceivable for an Ethiopian Prime Minister to pull out such a deal out of the blue? He cannot. To begin with, it must go past Parliament.

As a result, the question of whether Eritrea should withdraw has become extremely convoluted, with numerous loose ends.

We have observed that since the beginnings of the war, a large number of Tigray-born residents living in various cities throughout the country have faced discrimination and harassment everywhere they go. They couldn’t return to Tigray due to the war, and during this time, everybody from Tigray or of Tigrayan ethnicity was in a plight. That had been subsiding to a degree in recent months, but now that tensions have resurfaced, what does this mean for Tigrayans living around the country?

This is a clear problem. Kibrom authored a book and was detained because of his ethnicity; he traveled to Afar and got into a lot of problems; I’m using him as an example, but there are many others like him.

What is the UN peacekeeping mission doing now? To be honest, I don’t think it was even this horrible during Derg’s reign.

Innocent people are openly mistreated based on their race, with some even losing their lives as a result. Tigray is not being represented by the government, and this must change. It must reflect on its previous activities.

We are on the verge of a major crisis, which must be examined thoroughly.

It is unacceptable to feel unsafe and to face severe discrimination in your own country because of your heritage. There was a glimmer of hope. As you stated, the current circumstance may pass as it always does, but it may leave wounds and scars that will not go as readily.

Do you believe Ethiopia will be restored to its former glory in the future? What is the hope in a situation when many already believe Tigray is no longer a part of Ethiopia or that it would have a referendum? Do you believe Ethiopia is one of them?

It depends on the next steps we take.

As far as I am aware, Tigray is still a part of Ethiopia. Even Eritrea would have been a part of Ethiopia if not for the Adwa war and its consequences.

Right now, looking at the government’s actions against the people of Tigray, such as refusing to reopen banks, the internet, and transportation, it appears that there is a power that does not want Tigray to be a part of Ethiopia, which is incorrect. The China Foundation for Poverty Alleviation (CFPA) is a non-governmental, non-profit organization that was established in 1989 as one of China’s largest charity organizations dedicated to poverty alleviation.

The foundation, among other things, provides healthcare and nutritious food to vulnerable populations, with a focus on mothers and children; supports education programs; provides scholarships; builds infrastructure; and distributes stationery to help communities thrive.

The Ethiopian Civil Society Organizations Authority registered the Foundation in 2019, and it has been actively working since 2015 by collaborating with local and international non-governmental organizations on various projects such as school feeding, clean water, women’s economic empowerment, and refugee support. Sisay Sahlu of The Reporter spoke with Emma XiaocenXuang, the country director of the foundation’s Ethiopian office, about some of the project activities in Ethiopia.

The Reporter: It is unusual to see the Chinese government involved in such areas, particularly in poverty alleviation. What are the goals of establishing this foundation?

Emma XiaocenXuang: This is the basis of a total charity organization founded in 1989.

The Chinese government’s fund for social enterprises provides 99 percent of its funding. In China, the foundation works in the fields of health, education, rural development, and livelihood. We are now investing in similar international engagement areas.

In Ethiopia, our official implementation agreement began in 2015 in collaboration with Ethiopia’s First Lady, Roman Tesfaye, specifically to begin school feeding in Addis, in over 43 schools.

We were collaborating with a local organization called E-network at the time, but they changed the name to Hailmariam and Roman Foundation. We were officially registered as a civil society organization in Ethiopia in 2019 after working with this foundation for about four years.

We started the registration process in 2017, but the government changed, so we put it on hold. We restarted in July of 2019.

What is the foundation’s international experience?

In 2005, we began working as an emergency aid provider, and in 2015, we officially began in Myanmar and Nepal as our first steps in Asian countries, with Ethiopia becoming our first African destination.

We began our project in Ethiopia and Sudan in 2015. However, we chose Ethiopia as the location of our regional office.

The Chinese government has extensive experience in poverty alleviation. What is the secret to their success? Are there any suggestions?

One component of the foundation is poverty alleviation. The People’s Republic of China has a very strong system, and China is very good at mobilizing all of the parties involved, such as companies, non-governmental organizations, the public, the government, schools, and research institutions, to engage in poverty alleviation.

All of those parties are working within this system, and there are numerous methods and areas for collaboration in the education and nutrition sectors. We incorporated the school feeding system into children’s basic rights and the education system, not just the Zero Hunger plan.

We also give quotas to poor areas, particularly at China’s two best universities, Tsinghua and Peking. According to policy, we provide a quota for the poor. This is because if you want to end poverty, you have to invest in education.

Similarly, we must construct a very strong housing system to ensure that all citizens receive the full package so that they won’t have to stress over things like, “Oh, I’m sick right now, so I’m going to the hospital and spending a lot of money, since the government is covering most of the cost.”

Both the government and non-governmental organizations offer benefits like insurance.

For instance, I was born in China. Both the government and my company provided insurance for me. However, I believe that identifying the poor is the most difficult task because doing so is the first step in providing aid to the underprivileged.

In this regard, the Chinese government created a system that can store all of a person’s information on a card that serves as an ID card. You can discover a person’s complete information using this card.

A person also has a complex set of criteria and evaluation standards.

If you have an income of up to 2300 Chinese RMB, that means you are getting out of poverty, and the next step is to observe and follow-up for a few years until you make steady progress out of poverty.

If they are in an accident or become ill, they will be forced to return to poverty and their names will be added to the poverty list again. So this is a national system implemented with strong leadership and complex evaluation criteria to identify, follow-up, and evaluate the entire system.

How can we balance the demands of the expanding population with the available resources? Is there any advice, particularly with regard to the food system?

You know, it could be the geographical location, but if you look at China, we have a very large land area. Even the climate in the north and south is vastly different. People in the south, for example, prefer rice as their main food, whereas people in the north prefer wheat. The majority of Ethiopians consume Enjara.

I believe it is about food diversity and nature’s gift. I couldn’t find any seafood in Ethiopia. Everything is imported. So, in comparison to geography and location, it is the gift of nature that I want to emphasize.

The second point to mention is that China has made substantial investments in its agricultural sector. We simply devised a number of methods for producing more food while working with limited resources.

For example, there is a well-known Chinese man who developed a type of improved seed by changing the genetics and received an international award. In the same situation, this new seed can produce more than ten times the yield of the original local seed.

Thus, we put more time, effort, technology, and other resources into our endeavors. The northwest region of China is characterized by extremely dry land devoid of any water. In order to effectively use rainwater for farm work during the dry season, we constructed a water sailor.

The other thing we do is drip irrigation, and we make good use of all the available resources. There are just too many aspects to it for me to list them all now.

When the land is distributed in pieces, the government in some places tries to use the entire land and bring all of the necessary equipment to do the farming all at once, saving money, time, and human resources while producing more products.

What can Ethiopia learn from Chinese agricultural practices in order to make better use of its resources?

The most important industry is agriculture. Ethiopia is also dependent on it.

I noticed teff is a main product, and it appears that farmers are having difficulty making a living from it. I recently traveled to the Amhara region, Somalia, Oromia, and other parts of the country. I noticed how friendly and hardworking the people are.

Their farming equipment, however, only uses cows; such farming was abandoned in China more than 30 years ago.

When I see this practice, I think to myself, “Is it possible for Ethiopia to develop without using adequate technological instruments?” And I believe it is preferable to bring more technology and do it more efficiently.

I want to be modest. I sometimes admire how they learn this from their ancestors and local wisdom, even knowing the direction of the wind and when it might rain.

However, because I am not an expert in the field, it is difficult for me to speak out without conducting an assessment and a survey. In China, there are numerous agricultural universities with a large number of professors and college students working in the sector.

They are professionals who are learning from both abroad and at home, and they provide an excellent representation of Chinese planting culture. Farmers are constantly being introduced to new cultures, technologies, and skills. We also organize farmers into groups to teach them how to plant properly in order to produce more products.

Another experience is that you are aware that individual farmers are extremely vulnerable and lack the clout and knowledge to bargain with the market and the upper chain. They only sell the original fruit for a very low price. They put in a lot of effort and got very little in return.

There is something in China known as a “cooperative” or “organization.”

It is a unified organization made up of all farmers, and the farmers choose just one or two people to lead their organization and send representatives to determine the prices of all products.

They bargain to determine the market price, and if they work together and make a profit, they split it.

The majority of Chinese practical and recognized engagement in Africa mostly takes the form of investments, loans, and credit provision. Humanitarian commitment to Africa is little known, particularly in comparison to the Western world. What prompted the Chinese government to get involved in such foundations and poverty-relief efforts?

The first point I’d like to make is that the China Foundation is a non-governmental, non-profit organization, and we take great care when discussing political issues. We are always neutral and on the side of the vulnerable.

My personal observation is that, initially, international aid is provided all over the world, particularly after World War II. So there is a tradition, and 40 years ago, China suffered greatly and received significant assistance from Western and other developed nations.

They invested heavily and brought some goods to China. You know, for example, for people like me, I have received an English education from the UNDP.

China was the first recipient of aid, and now that the country has matured and can no longer ignore these countries, it is time for China to accept responsibility.

So, doing business is one thing, and taking on social responsibility is quite another. There is no conflict, and we must proceed.

You earn money and support your people there, but you must invest locally to support the local community, which is natural. Here, we share common sense and concepts with both the government and the general public.

But, you know, because we only recently developed our economy to support the Chinese public, the concept of social responsibility is something that comes from a good heart. China has done a lot to eradicate extreme poverty, but poverty still exists, and people are becoming wealthy in a very short period of time. We sometimes solve the poverty problem, but we still need to work on the nutrition problem.

We can’t solve it quickly because it’s a long-term process.

However, the Chinese government is always concerned with the need to do something for the locals, and they encourage businesses to assist the locals and take more responsibility. It also encourages companies to invest abroad while also taking on social responsibility.

The funds for this foundation did not come from the government; rather, they came from the South-South cooperation initiative.

How much money have you put into Ethiopia?

We used USD two million this year, but depending on the project, the fund may grow if the situation allows us to move forward.

What have you done in Ethiopia thus far?

We want to do a lot of things, but some of our plans have to be put on hold, not only because of the COVID-19 outbreak, but also because of the conflict in Ethiopia.

We are now investing in education, especially in school feeding, panda bag, wash, and solar light projects. But school feeding is the first thing we’ve focused on because we believe the children deserve it and that it’s a basic human right.

In addition, we intend to construct the school kitchen and provide cooking supplies for the students.

We have received funding for it, but we have yet to make a decision.

The city of Addis Ababa has adopted the full standard of cooking that we developed based on Chinese experience combined with the first lady’s local experience. Initially, it was 40 birr for two meals (breakfast and lunch) per child.

We recently visited the Oromia region and plan to visit the Amhara region; we simply want to share our limited resources’ experience, models, and any other relevant information.

Our main goal is to create a model and share it with the government and other non-governmental organizations (NGOs) that want to get involved and contribute to the local community.

Do you believe this school meal can be sustained?

Of course, we will conduct an evaluation, and once we see how the school feeding program is working, we will not suspend it for at least three years. We need to ensure that once the program is running smoothly, we can extend it for more than three years.

But our aim and goal is to keep this school feeding program running from kindergarten to grade eight, and that is how we will proceed.

However, if the government says, “We have money and we don’t need you anymore,” we suspend it and shift our focus to other sectors.

Addis Ababa has started the program, but if you look at mothers’ cooking, you will notice that they only use three stones in the pot to cook the sauce, which consumes a lot of energy and is bad for their health.

They must get up early and are paid very little. As a result, we are attempting to provide more integrated and comprehensive support, such as building and maintaining the kitchen as well as providing cooking materials.

We commissioned some Chinese construction firms to create the design, which we have already implemented in one school.

It is a pilot project, and if it is useful and effective, we will undoubtedly expand it. However, the first step is to obtain electricity in order to provide modern cooking materials, which can also save energy.

How are schools chosen for this project?

We communicate and collaborate with the government, and they know which areas and schools require the most attention. We will go there on the ground and compare one school to another based on their recommendations.

Are you planning anything else?

Yes, there is a Panda Bag project that aims to provide kids with school bags that contain more than 100 school supply items, such as lunch boxes, water bottles, hygiene items such as soap and toothpaste, and all the necessary materials for the students.

Every year, we conduct an assessment by asking children, teachers, parents, and members of the local community what kinds of items they most need and which items they do not want.

We need to make more adjustments if any item is more needed. We make every effort to avoid any political or religious content in this gift. The donation was made in collaboration with the Ministry of Education.

We will send the entire quota to the Afar and Amhara regions this year because they are affected by the conflict.

What exactly is the challenge?

Of course, there are numerous challenges. Each project has its own set of implementation challenges. We have to buy the panda bags from local factories when we need to provide them to the children. We talked, argued, and bargained about the price and shipment from China with them during this process, because we couldn’t find the item in the local market.

Actually, we made it easier for you to invest in it in the local market, but you couldn’t find the right quality.

And something that worries me is that when we try to collect some items from the local market, I notice that they are coming from India or Turkey, and I believe that if we need to invest in the local market, we should get the materials from here, because buying imported materials is very expensive.

Of course, not this year. We paid nearly one million birr per year for the damage in the previous three years because we did not receive the tax-free letter. However, we received this letter this year. This entry was published on August 1, 2010. Yohannes Benti (PhD) began his career as a chemistry teacher for a high school in West Oromia in 1992, the same year he got his degree in chemistry from Addis Ababa University. He has been the president of the Ethiopian Teachers Association since 2009, having been elected three times. He is the lobbying group’s longest-serving leader, having ruled over it for more than a fifth of its existence.

He immediately became an active member of the Association. Before getting his master’s degree in Educational Planning and Management from Addis Ababa University in 2005, he earned a second bachelor’s degree in law from a private university. While running the Association, he got a certificate in Advocacy and Citizen Management from the Coady International Institute in Canada and a PhD in Educational Policy and Leadership from Addis Ababa University in 2019.

The Association has 700,000 members at all levels. For the past six months, university instructors have been protesting about inadequate remuneration and other difficulties, but the government appears to have mainly ignored them. They have even vowed to strike in the coming month if the administration does not present a satisfactory solution.

Yohannes is the president of the association that represents each university’s associations, as well as a member of the Board of Education International, a 32-million international union organization. The Reporter’s Samuel Bogale sat down with him to discuss the concerns of lecturers and the education sector.

The Reporter: What compelled university academics to issue an ultimatum as they request the government to make an adjustment on salary and work grade? Can you tell us what they asked, and why they didn’t get a response?

Yohannes Benti (PhD): The query from university lecturers is on Job Evaluation Grading (JEG) and its implementation, which the government decided to impose for all civil servants in 2019.

There were approximately 65 salary scales among civil servants when the government agreed to reduce these scales in 2010, but it was later reduced to 22 scales in 2019 and applied immediately.

Since 2016, the Association has represented both general education and university teachers in the study to implement the JED on civil servants.

We detected a problem with the scales and wages of general education instructors when it was brought to us for comments in 2019, soon before implementation. We later requested an adjustment to increase their grades from the Ministry of Education, which then met with the Civil Service Commission.

During the process, the requirement for university instructors was disregarded.

What substantial modifications were made to the pay scales for general education teachers but not for university lecturers?

The highest work grade for teachers, regardless of experience, was only six. When the JEG was established, we asked the government to help them improve their grades, and they eventually made it to grade nine.

These are the salary adjustments that university lecturers did not have the opportunity to make. High school teachers with a bachelor’s degree currently earn more than 12,500 birr per month, or 1,400 birr more than university lecturers.

The higher the grade point average, the better the salary.

What has been the reaction of university instructors since then?

They have been complaining during our series of meetings since its deployment in 2019, and have even requested back pay.

Last year, the associations at each university formally developed a list of approximately 14 questions. Our association was then part of a committee that made the requests to the then-Ministry of Science and Higher Education, which was later dissolved before responding to our queries.

The petitions have since been passed on to the Ministry of Education, which is now the regulator of Ethiopia’s universities.

They had complained not just about the JEG and salary scales, but also about overtime pay, consultancy fees, housing allowances, and tax-related difficulties.

Housing has long been a demand of the teachers, and the government has always claimed that it is taking action. So far, how has it been?

Since the implementation of a directive in 2016, teachers have been given preference for housing at their places of employment, either by building on a plot of land or by purchasing condominium homes in cities like Addis Ababa.

University academics are excluded from this due to claims that they were receiving housing benefits, and their universities may be in a better financial position to have their own buildings and house the teachers. However, some city administrations, such as Addis Ababa, have already started offering housing subsidies to their general education instructors.

For teachers, a home is not just a place to live but also a place to work. Regions like Oromia have long been doing outstanding work in providing teachers with houses by giving them land to build on. In Addis Ababa, some 5,000 instructors were also given condominiums.

For the obvious reason that many other people of the community also urgently require homes, the housing question does not receive a prompt response. However, up until the end of the previous year, roughly 110,000 teachers received land on which to construct homes, along with a few condominiums.

The government was recently warned by university teachers to respond to their inquiries or face a strike by the end of September. What is the position of your association on that?

Discussions can help solve issues. Such actions have a significant negative influence, thus we don’t advise them. We should keep asking and be open to the strong arguments we hear while at work.

The administration views raising the scale and compensation as a difficult task, given the current economic climate. The Association also understands the situation.

The homogeneity of pay across various universities is one of several other issues that are currently being addressed. Our Association is attempting to mediate disputes between the government and educators. Both the things that the nation can change and the things that should be put on hold should be done.

Threatening with prerequisites is useless. We condemn that.

The government has been supportive of general education teachers at primary, secondary, and vocational schools, including acts such as granting land for them to build their homes.

We will continue to request the same perks for university instructors.

The government recently announced that universities will have autonomy, beginning with Addis Ababa University this academic year and expanding to ten universities in two years. What are your thoughts on this development?

The proclamation for university’s autonomy has been in existence for a long time. It is unclear how it would be used at all universities at this point, but they are starting with Addis Ababa University and expanding to other campuses. That is something that universities would like as well.

Several teachers work at schools, primarily private ones, despite not having completed the teachers’ training program, also known as the Post Graduate Diploma in Teaching (PGDT). Who are the association’s members and who are the teachers?

Any educator working at any institution is eligible to join. A teacher is someone who possesses the necessary credentials, such as the necessary training, education, and capacity. The worldwide standard is also being followed in our nation.

Not everyone who attended school for a certain field of study is qualified to teach. Additionally, it is essential to possess the required pedagogical skills. Teaching abilities and expertise should be present.

You can’t teach English because you studied it. This isn’t just a problem in private schools.

Do government schools hire teachers who have not received PGDT training?

Sure. When schools experience a teacher shortage, one option is to train applied science graduates in PGDT and hire them in schools.

Initially, the goal was for these graduates to be trained and deployed, but due to an acute shortage of instructors, they were authorized to begin teaching immediately.

This is an issue in both private and public schools. After much deliberation, the government decided to require instructors in both private and public schools to complete the PGDT program.

The requirement that teachers need to fulfill after completing PGDT training has actually been a part of government legislation for quite some time. This training is offered by a small number of universities to all teachers, domestic and foreign. Private schools will be required to pay for their own staff training.

Teachers in universities and in general education are unemployed in northern Ethiopia’s conflict zones. How is your organization supporting these educators?

University professors from the universities in the Tigray Regional State would be able to register online and request reassignment, according to a statement from the Ministry of Education.

Even while we know that some lecturers accepted the risk and continued to work, there may still be individuals in the area who are unable or reluctant to do so.

We have a list of the teachers who were displaced in relation to general education teachers. We are giving a small sum to a few of them as a sign of solidarity.

Our request for assistance in reassigning 43 instructors was made to the Ministry of Education and even the Ministry of Finance, but we heard back that neither the Ministry of Education nor the Ministry of Finance oversee any elementary or high schools.

We will continue to support them while putting pressure on the government to transfer them to any school and location around the nation.

How is the Association, a significant player in the education industry, reacting to the most recent changes and new rules?

The education reform research, which began in 2016, was the catalyst for reform. The public then debated it in 2019 prior to its implementation. University education was expanded to four years, and a national high school graduation exam was administered in grade twelve. In Ethiopia’s justice sector, Tamiru Wondmagegnehu is a colossal figure. He has been working for fifty years and has witnessed four regimes in addition to becoming a walking library. He has a master’s degree in legal studies and international law.

He started out as a judge under the imperial regime and eventually worked his way up to become the vice president of the Supreme Court, Special Court, and High Court under the socialist Derg regime. However, he was detained along with three other Supreme Court justices when the EPRDF seized power.

Following his release from prison, he founded the Tameru Wondm Agegnehu Law Office, which rose to prominence in the nation. Ashenafi Endale Of The Reporter sat with Tamiru to talk about Ethiopia’s legal system.

The Reporter: What similarities and differences can you find between the legal system, the institutional makeup of the judiciary, and its operations under the imperial rule, the socialist Derg, the EPRDF, and the current administration?

Tamiru Wondmagegnehu: The Ethiopian legal system can be divided into four periods: before 1900, between 1900 and 1941, between 1941 and 1974, and since 1974.

Since Derg, we have been ruled by autocrats akin to the French Revolution. Under these regimes, the courts have been altering their characteristics and duties.

Ethiopia’s triumph at Adwa falls under the first category because it is known around the world and has received attention. Four diplomatic consulates started operating right away in Ethiopia. Ethiopia became the only nation of color to be acknowledged under international law.

Following the 1648 Westphalia treaty, Europe came to the conclusion that there was no other nation state than Europe and decided to establish a European nation state. Therefore, only European nation-states were subject to international law before 1900.

According to international law, Muslims and Blacks in particular were not eligible. That is why Europe began its colonization of the western hemisphere, including its policy of rushing to conquer Africa.

No international law imposed sanctions on Europe. They consequently run ferociously to satisfy their need for resources and markets. Ethiopia was the only African nation at the time to have created its own state boundary.

In circulars he sent to England, Germany, France, and Italy, Emperor Menelik described and mapped Ethiopia’s active boundaries. Ethiopia did not draw its border with other African governments, but rather with European invaders. At the period, as to this day, Ethiopia was surrounded by European colonial governments.

What modifications were made to the foundational rules of justice by the regimes?

Fetha Negest, a 500-year-old written code of justice in Ethiopia, was created under Zerayacob’s rule. However, the zufan chilot (the king’s court) was the only institution at the top until 1900. All the officials of the kings judge matters according to their ranks.

Foreigners began to enter Ethiopia after 1900, and Fetha Negest was no longer useful for adjusting to modern rules. The first cabinet was founded in 1900 by emperor Menelik.

The emperor was under pressure from the foreigners, particularly the French ambassador, to create a consular court. Foreign judges were therefore permitted to sit as judges alongside Ethiopian justices after 1900. The consulate court operated from 1900 until 1941.

Emperor Haileselasie I disliked the consulate court system when he returned from exile in 1941. Thus, in 1941, he issued the Negarit Gazette’s founding proclamation for the first time. The second Negarit, which announced the development of a modern legal system in Ethiopia, was released that same year.

Haileselasie gave the order for English professionals to set up police and court institutions in Ethiopia, which were established at the supreme, upper, Awraja, and woreda levels.

The head of the Supreme Court was a foreigner. Experts received their education elsewhere. However, all of the judges on the supreme and higher courts were foreigners. This persisted up until 1965, when Niguse Fithawok, the first Ethiopian, assumed the presidency of the Supreme Court.

The final judge during the emperor’s reign was Hailessilase. After the emperor was deposed, there was a void. Thus, in 1987, the cassation bench was formally constituted.

I served as one of the justices on the cassation bench during the Derg administration.

Derg didn’t interfere with the system of civil courts. However, the government formed the military court system in addition to the already-existing civil court system. It never presented its cases before a civilian court; instead, it either executes its victims immediately or takes them to a military court.

Judges were therefore shielded from political interference.

The judges were fully removed when the EPRDF came to power. It stocked the legal system with cadres and individuals who could advance EPRDF interests. This persisted up until the 2018 inauguration of the present administration. There are several things that the present administration is working to fix.

What aspect of Ethiopia’s legal system is most lacking?

The practice of law is not based on reason but rather on experience. Justice must be acrobatic, just like life. Every judge gains knowledge from the rulings of earlier judges. Of course, some claim that this only applies to “common law” and not “civil law.”

Ethiopia adopts a system of “eclectic law.” This indicates that the principles were taken from several legal systems. Ethiopia’s legal system, however, is a little unclear.

On the one hand, we have the civil law cassation bench. However, a cassation bench’s ruling becomes law, and all courts below the bench must follow the sentence. The model is now comparable to common law.

The Ethiopian justice system has been disrupted by this difference in legal systems. Continuity refers to the use of prior judgments as standards for upcoming cases. Continuity is crucial.

Continuity provides predictability and confidence, two important advantages. Your win-loss ratio must be accurately known before you file a lawsuit. All of the stepping stone articles are already familiar to you. The courts would be unable to accomplish their jobs if every case required an interpretation of the law. A predictable life cannot be ensured by a judicial system like this.

In both the United States and Europe, attorneys provide clients with percentages indicating their odds of winning and losing. Ethiopia is the only nation without consistently applied laws. The main flaw in Ethiopia’s justice system is this.

The court systems and Ethiopian Bar Association must cooperate on this.

The Ethiopian justice system’s organizational structure is the second significant shortcoming. Ethiopia’s legal system was totally centralized, like one sun, one sky above everyone, prior to the EPRDF.

Ethiopia was divided by the EPRDF into nine different states, and that number is currently rising. There was discussion about how to reorganize the legal system after the EPRDF came to power and Kifle Wodajo was selected the leader of a group of specialists.

Some contend that, like prior governments, the justice system must be centralized. But the head of the Indian Supreme Court, Bagwati, present to offer advice, contended that Ethiopia cannot afford a decentralized court system. Others, however, believe that since the EPRDF formed a federal government, it must be decentralized.

Finally, the regional states and nine distinct court systems with nine supreme courts were approved by Parliament.

Ethiopia became the second nation after the US to implement a decentralized judicial system.

Under the US Supreme Court, there are 52 supreme courts. Because of this, America is the nation with the most lawyers. It is a new jurisdiction every time you enter a US state, thus the lawyers have to learn numerous laws in one nation.

The American federal structure is imitated by many countries, including Germany, but not its legal system. A decentralized court system was rejected by Nigeria, India, and many other federal governments because it was too expensive.

A decentralized court system appears advantageous at first glance. However, it is also expensive in terms of resources, both human and governmental. All we can do is hope and pray that Ethiopian leaders will be able to change this and unify the legal system.

How can the two main bottlenecks be eliminated at this time?

The constitution ties everything together. Ethiopia’s judicial system, however, can be centralized despite the fact that the structure is a federal one. India and Nigeria are two prime examples.

Currently, if a lawyer in Ethiopia wants to practice in many regional states, he must obtain a license from each of the regional states. However, if Ethiopia’s justice system is centralized, all of the regional states use the same article. A single license allows a lawyer to practice law across the entire nation.

In comparison to a federation, Ethiopia’s legal system is more like a confederation of states. Such a system is unique to the US, and only they can afford it.

Ethiopia is a small nation when compared to the size of America. Therefore, a decentralized justice system is not needed. It is incredibly difficult to reform and modernize Ethiopia’s judicial system. There may still be ineffective judicial systems in remote areas of the nation even after creating a centralized one.

How can the present border disputes with neighboring nations be resolved given that Ethiopia’s boundary was shaped by colonial powers?

England, France, and Italy all had boundary accords with Emperor Menelik. However, agreement does not imply demarcation. Ethiopia naturally agreed with England but not with Sudan. The current issue with Sudan stems from this.

The Prime Minister of Sudan, Alnimeri, and Haileselasie got along well. Just before the emperor was ousted in 1972, they were about to start demarcating the border. I hope Sudan and Ethiopia will start the delineation process right away.

Emperor Yohannes pleaded with England in the 1870s for assistance in keeping Masawa under control. Even though Yohannes assisted them in rescuing English troops in Sudan who were being surrounded by Mahdists, England refused. Meles Zenawi voluntarily gave over Assab a century later.

This is a huge contradiction.

But the situation with Sudan is becoming increasingly complicated.

As long as the 1972 agreement is in force, it can be resolved. The issue is that the borderlands’ value has increased recently. Ethiopia’s biggest issue is the absence of a succession plan whenever a new regime takes power.

Haileselassie came to an accord and was about to draw the line with Sudan. Sadly, Derg surpassed Hailesselasie. Derg, however, started over after stumbling everything the emperor had begun.

No Ethiopian administration adds on the successes of the preceding administration. Whether it be with the legal system, politics, development, or anything else, this is the root of practically all of Ethiopia’s problems.

Others have suggested Ethiopia may be able to reach the Red Sea via Ras Dumera, a thin free line that runs between Eritrea and Djibouti border.

Africa is home to fourteen landlocked nations. There is no other nation, however, that is as big, and as populous, as Ethiopia. The thirteen African nations that were already landlocked begged the UN to intervene before Ethiopia became landlocked.

Aid couldn’t get to these landlocked African nations. Even when a machine is replaced by a different brand, spare parts still come in. Because perishable goods take longer to reach the landlocked countries, importing them was unimaginable.

In order to negotiate between the African states, the UN tasked Yusuf Ahmed, at the time Ethiopia’s transport minister. This occurred under the Derg, shortly after which Ethiopia became a landlocked country.

A Kenyan academic once stated that Africa shouldn’t have more than 20 ports-accessible nations. He claimed that because even tiny governments are permitted to be countries, landlocked nations are created, dividing Africa into 55 countries.

However, the AU is introducing a very efficient procedure to grant all African nations access to ports. This will become a reality once the African Continental Free Trade Area (AfCFTA) is completely operational.

Of course, until Ethiopia uses them, the ports in Djibouti, Eritrea, Somalia, and other countries on the horn of Africa stay inactive. Masawa Port was undoubtedly a crucial tactic in WWII, acting as a stepping stone for the allied troops’ advance into Eastern Europe.

Currently, Ethiopia is attempting to enter Berbera port, which is positive.

Haileselasie made every effort to integrate Eritrea into Ethiopia in order to get access to the port. Assab port is obviously useless if there is a blockade of any type at the Suez Canal or Babel Mandab. Ethiopia is better off using Berbera port. There is nothing anyone can do because Berbera is the gateway to the ocean.

How can Ethiopia’s efforts to secure ports be impacted by Somaliland’s de facto status and lack of recognition?

The issues in the Horn of Africa can only be solved by peace. The horn has a sizable population. The chaos persists if this force is not used to development. Countries in the Horn of Africa must work together for the benefit of all.

The fewer jobs we produce, the more unstable we become.

Why do young people join OLF-shene, TPLF, or other armed organizations when they could get a respectable job, a home, a car, and vacation packages? Everyone wants to see equal development because they want to see their own country prosper.

Progress can lead to peace.

Due to the absence of an independent African state at the time, Haileselasie was banished to England. For that matter, there was no state.

Many people agree that Africa’s instability stems from the distribution of the same ethnic groups among its various states. Can African countries redraw the borders that colonial forces drew and reestablish nation states?

Ethiopia was at the vanguard of African decolonization in 1963, when the Organization of African Unity was established in Cairo. The main issue when the UN decided to decolonize was how to recognize and define the borders of African states. War was imminent amongst Africans if they had to trace frontiers back in time.

The UN and OAU ultimately opted to keep things as they were. In other words, borders and states begin at the location of the colonial boundary.

Each nation in Africa has territorial claims. We can’t, however, go back in time and fix it.

Ethiopia once ruled a sizable region, including the modern-day nation of Yemen, during the administration of King Kaleb in the fourth century. But we can’t claim it now.

The answer is that by uniting Africa through the AfCFTA, the AU’s economic integration agenda can eliminate the need for political frontiers.

Of course, Ethiopia is the nation that will be most negatively impacted by the status quo. The Congo, a sizable nation abundant in natural resources, was about to become landlocked. However, they were able to enter the Atlantic Ocean by Kabinda that was incredibly small. By the way, Congo provided the uranium for the bomb dropped on Japan.

A little opening between Djibouti and the Eritrean border allowed Ethiopia to reach the Red Sea. However, nobody is willing.

A serious hunger broke out during the Derg, and Nordic nations wanted to send aid cargoes. However, there was no way for the supplies to reach Ethiopia. Nobody would have protested if the Derg had taken one of the ports in the Horn of Africa at the time by force.

Ethiopia’s survival will depend on how its ports are handled in the current context of rising import volumes and growing population. It will either receive a peaceful response or a harsh one. Ethiopia must have a port, if only to use the congested route between Eritrea and the port of Djibouti.

The Ethiopian government also has to improve diplomatic connections with the surrounding nations so that they will consent to us establishing our own port.

Do you believe that Ethiopia’s conflict and ongoing instability are a result of the country’s power structure?

Ethiopia’s primary issue is underdevelopment as a result of missing out on the Enlightenment, the Industrial Revolution, the Agrarian Revolution, and the Technical Productivity Periods of the middle Ages.

According to Gibbon, who lived two hundred years ago, “the Ethiopians slumbered for over a thousand years, oblivious of the world by which they were forgotten.”

Of course, since we remained closed, we were not colonized. The mountains of Ethiopia were impenetrable to any force. Due in part to the progress that colonizers sparked, several African nations outperformed us.

Ethiopia nevertheless continues to be rich in resources and treasures. The only nation in Africa with a written past and its own alphabet is Ethiopia. 80 percent of Ethiopia’s bibles were completed and authored in the sixth century. At the time, the western bible was still in its infancy.

Additionally, Ethiopia was crucial in the spread of Islam and Christianity. Ethiopia was the destination of the first Hijira, not to Meca and Medina.

Unfortunately, because we were isolated for a millennium in between, Ethiopia’s civilization did not maintain its early impetus. We woke up when the world is already way ahead of us. We were still plowing the ground with oxen and yolk when Ethiopia awoke once more.

Youth in rural communities no longer have access to land for farming as a result of the land policy. Therefore, everyone is moving to the cities. Not only are Ethiopian towns crowded, but the proportion of farmers is out of proportion to the country’s growing consumerism.

Unemployment is widespread. There is a shortage of farmland. Ethiopia’s current issue stems from this. For the first time, PM Abiy Ahmed is attempting to spread large-scale agriculture to lowland areas in addition to the rain-based, often small-scale farming in highland areas.

What do you think of the administrations ongoing judicial system reform?

We voluntarily submitted to Ethiopia’s complicated legal system. One institution cannot bring about justice system reform. Huge amounts of public resources are being used by the decentralized justice system.

Ethiopia cannot support a decentralized judiciary when dozens of regional entities each have their own legal framework. This has to be combined.

Abiy recently complained to the parliament about how corrupt the legal system and police are. A few judges have been furious. It is well known that some judges accept bribes. Even judges of the top court experience this.

It is incorrect to hold the PM responsible in a legal system as tainted as Ethiopia’s. Though it is a challenging undertaking, we must find solutions to fix the issue rather than pointing the finger at one another.

The Court has the most authority in any nation that wants to advance. The future of the nation, business, and daily life depend on the Court.

What big setback do you believe has occurred since PM Abiy came into power? Was the transition peaceful?

We must research the causes of our ups and downs. Ethiopia has not done a very good job at nation-building. There are distinct state borders in Europe. However, the societies are very interconnected and quite similar. They are similar in terms of culture, languages, and universities. But the Ethiopian society has been segregated from one another, living in separate cultural enclaves.

Social media is currently dividing our society even more and pitting everyone against one another. Nobody is accepting accountability. We have much work to do in order to build a civilized society.

Ethiopia’s unemployment and unrest don’t surprise me because I am aware of our incapacity to provide quality labor and excellent jobs.

Five years ago, nation-building and good governance were the social movement’s top demands. Today, the issue has expanded to include the state’s continued existence. The student movement during Haileselasie began with a “class struggle” and concluded with ethnic politics in a similar manner. Why do political groups in Ethiopia consistently fail to achieve their goals?

Due to the students’ limited exposure to other ideas and the “class struggles” popularity in Cold War-era politics, the students’ movement adopted it. However, the class battle diminished and gave way to an ethnic conflict, which Meles Zenawi pursued.

Many Ethiopian academics today, particularly those in the diaspora, believe that ethno-nationalism poses a threat to the state’s very survival.

This indicates that the nation-building process in the country has been derailed by ethnic identity politics, which is having an impact on both the nation-building process and the state’s very existence.

Nationalism is not necessary for Ethiopia. The United Kingdom, France, the Netherlands, and even Italy are examples of nation states. The US, however, is not a nation-state. Europeans make up half of the American population.

One hundred years ago, Ethiopia became a nation-state. However, due to a number of criteria not being met, Ethiopia was unable to become a nation-state.

Many academics, particularly those from Addis Ababa University, continue to vehemently inform the media that Ethiopia needs to become a nation-state.

Talking about nation states now is a farce. Instead of a nation state, Ethiopia needs to be a patriotic state. Everyone in their own ethnic group is patriotic. Every Ethiopian, including Oromo, Kembata, Amhara, and everyone else is a patriot. That is what the United States is.

Everybody is present in America, including Latinos, Chinese, Indians, French, and Blacks. However, they never give up on the United States, which is their nation. Although they are patriotic states, they are not nation-states. To advance a patriotic state, we must work together.

In Gojam, there is no such thing as a pure Amhara. Every ethnic group has ancestors from different ethnic groups. Only our names reflect our racial origins.

Ethno-nationalists and ethio-nationalists swing back and forth in Ethiopia’s politics all the time. This constantly sparks conflict and a struggle for dominance. How can we transform it into a nation of patriots?

The constitution may impose restrictions on it. It can be written into the constitution if everyone agrees to it. Otherwise, Ethiopia will experience civil conflicts and revolutions.

Many people concur that the majority of Ethiopia’s issues can be resolved if the present constitution is altered. Do you agree?

It should be altered, in my opinion. Both educated and uneducated individuals are condemning PM Abiy for sticking with the current constitution. The constitution is frequently compared to an Ark. If the public does not believe in the law, it is just a piece of paper.

Therefore, if a carefully considered constitution is substituted, Ethiopia’s issues can be resolved.

Human rights advocates and even government representatives claim Ethiopia’s judicial system, especially the court system, is unprepared to handle cases involving human rights violations. They advise Ethiopia to start accepting the jurisdiction of extra-national judicial systems as a result. This means that Ethiopia must recognize the authority of regional and international tribunals over any violations of human rights.

Does doing so undermine Ethiopia’s sovereignty?

Only when the executive, judicial, and legislative branches operate in accordance with the check and balance principle can Ethiopia’s justice system be said to be in operation.

Judges are only answerable to the law. Because I criticized the Derg’s military court system, I was removed from my court position. Since 1948, Ethiopia has fully embraced the rule of law. Judges must, however, exercise their authority.

Courts have full authority to resolve any dispute, with the exception of arbitration disputes. Ethiopian courts have the authority to adjudicate matters involving violations of human rights, particularly at the high courts and Supreme Court.

The establishment of a different type of court system in Ethiopia must be spelled out in the constitution. For human rights matters, we can set up special benches, but we cannot establish a separate court or division.

The UN human rights commission is currently requesting entry to the country in order to examine human rights abuses that occurred during the Tigray war. The agreements and treaties were approved by Ethiopia. What would happen if Ethiopia resisted?

We have observed that the west consciously wants to harm Ethiopia in numerous instances. Since the founding of the League of Nations, this has been the case. Sanctions are being imposed on Ethiopia.

Mussolini would not have been able to attack Ethiopia if only the US had imposed gasoline sanctions on Italy. Because the US continued to supply fuel to Italy at the time, Mussolini resumed the invasion.

Ethiopia was brought up thirteen times in UN Security Council discussions last year.

International law thus serves as a vehicle for both justice and abuse.

The US regularly uses the UN to impose sanctions on nations it wants to destroy.

Never should Ethiopia yield to outside pressure.

Ethiopia has ratified a number of international human rights accords and conventions. By the way, Theodore Roosevelt’s wife was the one who first proposed the 1948 Universal Declaration of Human Rights (UDHR).

It forbids the use of cruel or inhumane punishment. Ethiopia had a death penalty at the time. The emperor delayed ratifying the UDHR rather than repealing the death penalty law. Ethiopia, however, is the first country in Africa to sign the deal.

Politics is at play right now, not just a general worry about human rights abuses. Before authorizing foreign investigators and acknowledging their jurisdiction, it is imperative to exhaust all domestic options. Extra-national venues may be taken into consideration if there is no statute allowing human rights victims to appear in court or if the court is unable to uphold the law.

America commits to defending democracy. Democracy is the majority’s way of ruling. Therefore, by simply agreeing, the majority can flip the truth on its head.

Can the Chief Justice of the Supreme Court call the executive to inquire of him or her? How are checks and balances made?

The Chief Justice of the Supreme Court lacks any judicial or executive authority. The president only serves as the court’s speaker. The president only responds when asked.

By the way, a judge on the Supreme Court is distinct from a judge in a lower court. The author of ye’ ewunet Mirkuz, and a lawyer, Wondimu Ibsa was born in 1947 in Arsi. Having survived the 1969 revolution, he joined Wez League and then started teaching. In his career as a former politician, Wondimu had gone through several challenges as a former politician before becoming a lawyer. He survived the 1969 revolution in Ethiopia and was arrested in the famous Maekelawi for 150 days. When he decided to become a lawyer, his first task was serving political prisoners facing terrorism charges. Lately, he is more known for sharing his political views on main stream media outlets. The Reporter’s Selamawit Mengesha sat down with him, as he reflects on current affairs and his journey in politics of Ethiopia.

The Reporter: can you tell us a bit about yourself?

Wendemu Ibsa: I was born in what is considered a large family. I had 17 sisters and brothers and my father had 47 children from 3 different women. When I was growing up the schools in Arsi used to encourage us to learn Amharic. And some people associated it with racist remarks but it was purely to help us learn other languages.

I was amongst the students who survived the 1969 revolution, I was in ninth grade and I remember crying to my mom when soldiers would beat us senseless. When the ‘edget behibret’ campaign started, the Ethiopian People Revolutionary Party (EPRP), wez league (ወዝሊግ) and All Ethiopians Socialist Movement (AESP) were wreaking havoc across the country.

I joined senay leke’s party Wez League. Students whose average was above 90 were selected to give after class courses back then, for which I was selected. I started working as a teacher starting from 1969 to 1971 with a 180 birr salary. Through all of this, we were running the revolution on the side.

I’ve went from having my parent’s religion to having no beliefs but I eventually got baptized at 40 years of age and became an orthodox Christian. I then worked as a money collector at the church for four years.

I was also detained in the famous ‘Makelawi’ for 150 days, when EPDRF took power in 1983.

I’ve also worked as a supervisor and a director in Hawassa. As a lawyer in Adama, I joined the Oromo Federalist Congress in 1998–2002. In 2006, when more than half of OFC members, including Merara got arrested, I decided to give my services as a lawyer. Back then, lawyers used to charge more than 300,000 birr to represent people accused of terrorism, because representing people accused of terrorism could label them as terrorists as well. Knowing this, I offered my services at makelawi for free, and since then I have represented 600 people accused of terrorism.

When I was serving free of charge, I faced a lot of opposition from people including my family. I remember a judge telling me that I can’t defend people charged with terrorism anymore, but 17 of my colleagues had already decided to represent those accused of terrorism.

Prime Minister Abiy Ahmed (PhD) has said they will not arrest anyone without due diligence, yet we are seeing a lot of people arrested abruptly and detained for several days without cause. What do you think changed?

“We don’t arrest without due diligence,” is just a political way of speaking. Currently, the parties in Ethiopia including the incumbent follow a party politics system, meaning it is the top executive’s playground. A political party stands for justice for those that are with it or against it. The parties in America, the republicans and democrats, are political parties, while Prosperity Party, Ezema, ABEN, Enat, amongst others, look like they are trying to shift from party politics into political parties.

A lot of Ethiopians were involved in the green legacy campaign. But out of the 53 parties, not more than 10 were involved. Why weren’t the rest involved? The legacy is not for the PM but rather for generations to come. They could have contributed to something that made a difference but the only objective of party politics is to obtain power.

When Abiy said that, it was in the essence of party politics. To whom does the PP belong to? Is it for the prosperity of the city, the rural area or the farmers? It should have been called “Ethiopia’s prosperity political party.”

Political parties care about the country, its people, history and culture. Even if political parties try to gain power they still stand for the people. The Civil Code, which has been in action since 1952, says that people can be arrested based on suspicion with or without a court ruling. Back in the feudal days, it was only allowed to arrest suspects from 6 in the morning till the sun sets but not after even if they were guilty. Police can surround him but they can’t arrest him, no matter who the person is. If Abiy does not practice this law, then the EPRDF and Derg’s plague hasn’t quite left his system yet.

The practice that is becoming normal these days where they hold people in prison for eight or nine days is not acceptable by law. Statements like “We don’t arrest without due diligence” are said with a political intent. Politicians and political parties think about what to say to get more applause instead of thinking what would actually benefit the people.

What is the cause for the killings of innocent people in Ethiopia? Who do you think is responsible for these acts?

The instability in Ethiopia has its roots dating hundreds of years back, back when colonizers had their eyes on Africa. The victory at Adwa was not just a victory against Italy but against the whole of Europe. Ethiopians used to unite to defeat these outside forces. When the west found out the secrets to Ethiopia’s victory happened to be in our unity, they needed to dismantle this unity through civil wars and parties. These parties who have a budget from the west have the sole purpose of creating conflict and rift between ethnicities.

Controlling the source of income was also a measure used by the west since the country is dependent on donations. After the 1945 World War, Japan was forced to adopt a strong military system. Within 30 years, Japans capacity was just as good as the UK, after changing the policies they were forced into. The donations are an indirect attempt at colonization.

The crimes we’re witnessing today is a result of years of planning by the west. There is this thought process circulating where people think their ethnicity came first or that it is better.

Even banks organize themselves based on ethnic lines; they have the “divide” mentality. People that are losing their lives are Ethiopians and there is no need to classify them based on ethnicity. Being proud of your ethnicity only validates Ethiopia more, because our ethnicities are found within Ethiopia.

If we take the religious approach on how humans originated, it started with Adam and Eve. They were human beings and not Amhara or Oromo. We are Ethiopian’s first then ethnicity follows; so, to refer to the atrocities in Wollega as atrocities committed on Amhara women is accepting the narrative pushed by colonizers.

Amhara’s policy is Oromia’s policy and vice versa; we can only salvage Ethiopia when we stand all for one and one for all. Being Oromo, Amhara or any of the other 80 ethnicities is natural but claiming one is superior over the other is immoral.

How do you think this can be mitigated?

Parties and politicians that stand for terrorism should be dealt with to make way for the people to have an active role. The government feeds 1.7 million students in Addis Ababa and its surrounding. It provides books, uniforms and bags. The only thing families worry about is providing the dinners. This is not something to overlook. When I say this am not saying prosperity party or Dr. Abiy are without flaw, all governments have flaws.

The community’s outlook on laws and courts is relatively better than it was before. Do you think this has anything to do with the organizational change? If there is change since most organizations are individualistic, how can that be mitigated and continue long after the individuals have left?

Prosperity Party asks organizations to help it achieve democracy. A strong military can only be formed when there is a strong organization. Law enforcement is the government’s duty while respecting the law is everyone’s responsibility.

In a meeting amongst 1000 lawyers in Oromia held by the Oromia Lawyer’s Association, a lawyer said “there are no courthouses in Oromia, or judges. The only place where judges and courthouses exist is at the Oromia Supreme Court.” But there are Oromo judges and courts in Ethiopia. If we’re accounting for injustices, then every other supreme court could come into question. The acts of a few lawyers and judges that are deeply intertwined in ethnocentric beliefs do not dictate the profession as a whole. Even the PM has no right to misjudge the profession because there are honest judges and lawyers.

What should be done to promote accountability? Would people who have violated human rights be questioned in the court of law?

The current atrocities are due to terrorists, whether they are Oromo terrorists or Amhara terrorists. Both cultures have their own way of justice that involves forgiveness. The involvement of the elderly is needed.

Political parties are creating a better life for their children while condemning the innocent. Those responsible for these acts of terrorism shouldn’t be judged in court. All the region’s religious leaders and elders should judge and reconcile things themselves.

The newly formed National Dialogue Commission plays a vital role for this, but political parties have been skeptical since its inception. If all Ethiopians come together, it will help the national dialogue to be successful. As politicians put it, the dialogue is not one carried out between parties but one that involves farmers that make up 85 percent of the population. As of now racist politics and ethnocentric politics have spread.

The current problem will not go away easily. It will take several years of working together.

There is a noticeable change in courts after Meaza Ashenafi took power, but there are also a lot of problems at the same time. Just like how a teaspoon of poison could ruin a barrel of water, the acts of a few taint the entire institution.

How can we stop the problems in all the regions of Ethiopia? How can the region’s questions be answered while maintaining peace?

The people should give information as a way of solidarity with the government. The 547 representatives at the Parliament represent 120 million people. For a parliament member to talk about their own ethnicity alone is really shameful, they are not there to represent the Wereda that put them there but to represent the people of Ethiopia.

If there are people in Parliament that spread fake news, then prosperity party is negating its own progress. There are a few that are openly opposing the death of fellow citizens. When a citizen is hurt in wollega, there should at least be an opposing brief against it from the Parliament. If prosperity is leading the country, a region’s Special Forces should be able to help another region’s army. The defense force alone cannot save the country.

Rophnan Nuri, commonly known as Rophnan, is a prominent performing artist, musician, DJ, singer, songwriter and an audio engineer that blazed a trail for Ethio-infused electronic and house music. The Artist made a name for himself as DJ Rophi before releasing his first album, Reflection, in 2018. The album made him the first ever artist to release an electronic music LP in Ethiopia, becoming an influential figure locally and internationally.

Mixing traditional sounds with futuristic undertones and a powerful lyric, he dedicated his debut work as a voice for his generation. His work earned him multiple awards, featured with world famous groups like Major lazer, and collaborated with the Zambian rapper Chef 187 on the coke studio stage. He also held a successful country wide tour for a year and half.

His work and demeanor has earned him a feature on Forbes Africa’s 30 in the creative category, making him the first Ethiopian to feature on the list.

He recently released a successful album “3” earlier this year, which he followed up by “6” this past week. The two albums, which were released after his deal with Universal Records, offer incredibly produced music directed at the youth.

Rophnan announced the final album of the trilogy will be released before the end of 2022. Yosthena Aynalem of The Reporter sat down with Rophnan to talk about the mystery that is Rophnan Nuri.

The Reporter: let’s start from the beginning. Can you tell us about your upbringing and how you got into music?

Rophnan: Funny enough, it did not start out with music for me. Yes, I have known and loved music all my life but my journey did not start there. I am a singer but I am not just a singer, or just a writer. I am a recording artist that engineers and produces as well, but I am also a DJ. I think when you’re all of these things your journey must start with one thing. For me, it was recording.

I started recording sounds from a young age and little by little I went from recording to learning the guitar, DJ’ing and then singing. It all unfolded gradually to make me the artist I am today.

I remember I started recording my mom when I was 10 years old. That was my first experience of getting into music. Because to me it wasn’t just music, I thought everyone had the same relationship with sound and music as I did. Through time, I came to realize that not everyone was drawn to it the same way. At that age, I used to perform in front of students and they would love it, but I thought that was normal at the time.

I started recording my mom out of the love I had for her, I would use tape recorders that I make from scraps; I have always been a physics head because it helped me know the world better. I would always make things up from run down electronics or collect parts like dynamos; I have always been that kid.

I always wanted to keep a record of my mom’s voice in my tape recorder, so I’d play it on repeat until my battery dies and that was a 10-year-old me falling in love with sound and frequency. From then on, I started recording my little brothers, my neighbor’s kids, and my friends.

It became my way of keeping a photograph or picture of some frequency, those records painted pictures in my head that ensued emotions in me just like a picture would. I have recorded my mom till my last conversation with her, she is not here anymore, but I’ve kept her voice till our last conversation, so I have basically recorded my mom for 21 years.

So, how exactly do you experience sound?

I always see colors when I think of sounds, even when I am asked to do commercials. I will always ask them what their theme color is so I have a sound for that color. Every color in the way it’s painted or crafted has the same pattern in music because in order for something to exist it needs pattern. Music and creativity have a pattern of their own. A very good example for this is the project I did in Dorze in my first album, it was literally the pattern of their denguza (Welayeta Traditional Cloth) that inspired the music, and it is a mixture of black and red patterns.

So, the pattern on this attire is that when one color goes in, the other goes out, their song is the same way, so you can represent the color in different voicings and you have a pattern which is a harmony and the Dorze people are one of the most harmonious people and that is one of the things I learned from them.

Harmony is everything. It is embedded in their music, their day today life, culture; they know how to sing and be in sync within. That is how I see sound no different than pictures or any creative work.

What classes have you taken to master your craft?

Endless practice and my experiences were my lessons. I remember building my first studio with Abu-Walad biscuit box and Miyota DVD microphone when I was 13. I continued performing in class rooms and jamming, and I have also been listening to FM Addis 97.1 from the first day they opened. Eventually I started working there for three years later on in my life.

I think I was 10 or 11 when they started and from that moment on, my whole teenage time was spent listening to a lot of radio. Radio became a huge part of me, sound was everything because my experience is my mom’s voice but I started hearing her voice through other moms. Even when I travel and record, I know that tone, it has the same spirit.

A sound does not lie. That is why mostly my music is based on tone and notes. These are my inspiration when I make my music especially when I am trying to go deeper in the culture and get something out from it.

At what point did you start DJ’ing?

I started DJ’ing or I would say playing in mini media at the age of 15. I got introduced to computers at the same time and realized there is a thing called “software,” which allows me to record vocals and play with instruments that are already recorded, make patterns out of them and make music. So, I started doing that when I was 15.

What most people don’t understand is the reason my recordings are clear is because I’ve been recording for 21 years. I am more experienced than most people who are in my age group. I have been producing for 17 years now and I just turned thirty-two. So the reason why my production is this good and I am getting better every day is because I have been doing it for a long time. You have to understand that this recording, this clarity and this skill doesn’t come easily. You have to work on it and you really have to put your time.

When I turned 17, I actually started DJ’ing. I got introduced to a DJ mixer. I put out my first mixtape when I was 16, remixes of songs at that time, whether Amharic or English, I literally did what I used to do in the classroom and changed it into a record.

I already had recorded data in my head and the computer allowed me to turn that into a recording so I started DJ‘ing that music. It was a way to put my music out. It became the best platform for me instead of being a guitarist, a vocalist or anything else. DJ’ing was the first introduction for me to put my music out and then it goes on to working in Radio.

I used to play my mixtapes on the radio when I was 18, 19 or 20 and that gave me the platform to be famous. After that, I put out my second mixtape and then I continued producing even more, production has been there since I was 15 till now.

When I turned 21, I stopped putting out mixtapes after the third one because I wanted to do an album of my own. It took seven years of my life in the studio, worked day and night, 16 hours a day, every day, while DJ’ing at night and paying rent. That circle went on for seven years straight and then Netsebraq was born.

I went from 21 to 28 years old doing nothing but producing, learning how to write, learning to sing better, learning how to record, buying new better equipment, working on myself and my craft. It took everything out of me.

That is why Netsebraq sounds the way it does, it was crafted from scratch and I found a new sound for my generation the world has never heard of, a new sound for my country and for the industry and that took time.

I found myself in music, in a new way of writing, progression, of sounding, recording and all this took time. It was not just a project. Its impact can be seen through DJs coming into the mainstream, singers to find themselves. I hope I am not fooling myself when I say this but, I think Netsebraq proved to artist to be themselves and to sound like themselves. It brought free thinking to this industry but it didn’t happen overnight. It was something that was crafted for a long time.

When was the first time you Disk Jockeyed professionally?

I started doing my own Day Party’s after high school in college where I started throwing parties for people in my own age group and a lot of people came to my sessions. Back then, there was no platform you can use like Tik Tok so people just attended my parties using flyers and a lot of people showed up because of the mixtapes I used to release. At those parties’ attendees didn’t pay attention to the music, just how it made them feel, they don’t really understand the craft.

Out of the whole experience, what has been your favorite part?

Definitely my first album release party, because I had been working none stop before that and when reflection happened, I was famous in most cities as a DJ. I would go to Arba Minch and pack a place of 2000 people, as a DJ I was doing really well. I was making good money and had good exposure as well, especially on the last year before Netsebraq.

Netsebraq brought me to the stage as a singer, song-writer plus a DJ. The DJ part has been subtly following me. But my first album release party was a very special moment for me. It was three months after the album had dropped and the place was packed, people were at the gates lined-up because the place filled up early.

All of that happened within three months and it was very historic. An up-and-coming artist, who is a DJ, selling out a concert was not common; it was unheard of then. For me it was a moment I will never forget, because I remember the energy that night. I had never seen an energy like that in my life, that made me think to myself “oh wow, I have made it this far.” Seeing people sing along to songs that I wrote felt surreal, something I created spoke to them enough for them to know it by heart and that truly astounded me.

To answer the question, the release party truly stands out for me, especially when I was playing the piassa song. I remember time freezing, my friend and fellow DJ, who I grew up with, was back stage with tears in his eyes because of how amazing it was. We used to walk back home after DJ’ing because the first two years of my career, I didn’t have enough money to even pay for my taxi-fare home, so we walked to places instead. I dropped opportunities my family offered me to go to the US, I dropped out of Piloting school after completing almost everything, and I then joined computer school.

And were your family supportive through all this?

Well, my brother wanted me to go to Pilot School, he was ready to pay for it and arrange everything. I went and did everything, I didn’t think I would get in but then I ended up getting in. When I did, I went to my mom and told her that I made it in, that I could follow this path and that I didn’t think it was for me.

The only thing closer to music for me at that point was computers and I would rather go and study that. And she was very supportive, she said ok and that I should be careful. My family had always been supportive of my aspirations which I am forever grateful for.

I remember when I finally got the deal with Universal Records, the first thing I did was to tell my mom and record her in the process. She was always willing, she never turned me down. She was always there for me, had she said no to me backing out of pilot school back then, I would not be where I am today. Rophnan, as a musician would have never existed. I am forever indebted to them for that.

My father on the other hand used to always tell me “Whatever you do, sell it.” He never told me what to pursue or to stop music just that I should do what I love and whatever that is I should sell it. He raised all of us like that, if you love something learn how to sell it, so you’d learn to perfect it and love it even more. Selling it would give you the money, time and opportunity to grow it and polish it into something better.

If I never sold my first mix tape, even if my first salary was just 500 birr, I wouldn’t have had the resources to support my endeavors down the line. Money is money no matter how small it may seem; it will serve as a stepping stone. I am not saying to just do it for the money but you have to account for your time with something; gain something from it, no matter how small it may seem because your time is the most valuable thing you have.

You are currently amongst one of the top artists in the country, yet you are very private, not very active on traditional media but you’re also active on social media, why is that?

I wouldn’t say I am private, because I am always posting. People know what I eat, what the studio looks like, where I work out, when I’m working. If you ask an average person who follows me on social media what I do, they’ll tell you that “he eats healthy,” I go to gym at midnight.

But as for media, I usually don’t go out unto media because I don’t really have anything to say. I have been away from media for around two years now and that’s mostly because I didn’t believe I had anything substantial to say and I don’t want to come on and lie, so I chose not to say anything.

I am the kind of person who likes to understand people’s truth and delve in to it. I believe a lot of truth is subjective and I am open to hearing other people’s truth but I know that a lot of people don’t see it that way.

What I consider my truth might not be what people want to hear. So, if I were to come out on media and say what people want to hear and not my truth, it would be a lie. I never want to lie to my fans; that is disrespectful. I would rather communicate with my people through social media and show them what I hope would inspire them, show my craft and take them through my creative process. And when this album comes out, it wouldn’t be alien to them because they saw the work that went into it through my social media posts.

I would rather communicate through that because who am I to comment on things I don’t know and understand.

I know and understand that everyone also has their truth that they’re exposed to and I am nobody to negate or support that. Until we all find a common ground of saying I respect your truth as much as you respect mine, I don’t see the importance of going out in public and creating controversy instead of looking for a solution because we can see that nobody is listening to anybody anymore.

Everyone is looking for voices and opinions that confirm their truth instead of openly listening to everyone unbiased. So, of course I am private, because I have nothing to share that my fans don’t already know. I am just as confused as everybody else and if I can’t help, I would rather listen and try and learn about everyone’s pain and truth.

And to me, music helps me do that.

Interesting, steering a bit off topic, you’ve mentioned you regularly attend the gym at midnight, why do you do that?

For me, it’s more mental than physical, because I don’t want my studio to be the hardest thing that I do in my day. Because the hardest thing is always seen in comparison, the hardest part of your day is the most dreaded part no matter how much you love it.

To not lose the love, I thought I would create something more challenging for myself. Now for me, the studio will continue to be more exciting because it’s not as hard as getting up at midnight and going to the gym. Contrary to what most people would think being in the studio is very tiring. You sit there for hours and hours daily; the not knowing of what will come out of each session creates a lot of anxiety as well, so when I add the midnight gym on top of that, I would have a much harder thing to do, which pushes me to like the studio better.

I needed that push because I had to finish three albums in two and a half years. It took a lot out of me and not just me but it took a lot out of my management as well. To deliver three albums in this time frame was really hard. Normal working hours don’t quite cut it.

Back in the days, it was really hard for artists to make a living off of music but the tides are changing now and artists like you are making a difference in that. What do you think propelled that change from your part and your peers as well?

I know it is getting better comparatively but it is not on the trajectory it needs to be at. There are still artists that are not earning their fair share but I think YouTube democratized so many things. It gave the power to artists to some extent. What got better is not the payment but the exposure. Artists get to be discovered in a quicker, better way.

As for back in the day, if the person who worked at ‘hire treat’ did not like you personally no one would know your name. Now, we’re exposed to more artists because we have access on our own terms. Young artists have better platforms now and bigger exposure where their music gets the chance to be discovered by many.

For me personally, I am rooting for all of us. When I hear an artist getting paid a million birr or dollars for music, it makes me ecstatic whether I like the music or not. It makes me so happy because the industry is getting paid this much, which is a win for all of us. It would mean fewer artists who are unable to support themselves and their family through their craft.

At least they would set a standard of artists earning a good life. I think what is happening is there is the YouTube market that is supporting local artists. Even if the public isn’t directly paying for the music, they are exposed to it at least. There are platforms that would support artists even more like Awtar but people barely use them.

When people buy the music, the artists will directly benefit from that so I encourage listeners to get their music from platforms like that. I think that is the main market but for now, YouTube works wonders for the industry.

What are your thoughts on people saying Ethiopian music died after the golden age? Some might say today’s music is more diverse and the time for it is now. What is your input on that?

Whoever says the time for Ethiopian music is now, I just want to say that I appreciate you all. Because a lot of people discourage what the industry is right now, saying it could never amount to what it was back then. The way I see it, if you grow up listening to any type of music, even if it’s just whistling, you’re going to have an attachment to it because it would be nostalgic.

It is hard to compare today’s music to something that has been part of people’s memory for 40 plus years. There is a lot of memory attached to it that can’t be compared. It is like expecting a new born baby to win a race against a 40-year-old, if you were to give 20 more years to the new born they will definitely win against a 60-year-old.

So, if you give us time, we too will have that nostalgia factor that would make us amongst the classics in people’s mind. Every generation has a favorite and it mostly has to do with the memory attached to it. I think it has more to do with nostalgia rather than production, quality. The golden age music was well produced, very powerful and well written too but I don’t think they need to be compared with today’s music.

Today’s musicians are very creative. They too have things to say, they too are well written; the people making the comparison probably grew up with those songs and they might not understand today’s music. Not understanding something does not make it lesser.

Considering artists back then, even the greats, did not put out a lot of albums or singles when compared to today’s artists who put out music more often. Why do you think that is?

I think it was very hard to put out albums back then than these days. But artists suffer to put out albums these days as well. There are easier platforms to make and sell your music on but I think artists are still suffering in a sense that studios are not easy playgrounds to play on.

The industry still does not really pay creatives; studios, composers and writers are not paid the right way. So, until that day comes, don’t expect too much creativity because creativity is also run by the freedom of time that you can make music.

If I am not getting paid well, I’ll just do something to pay my rent. Something that is easier. That is why getting paid can make a difference. When I say this, people might automatically say in the 60s they were not paid but they did so many things, no they were hired by the government.

These writers were hired by the Ethiopian National Theatre, Ras theatre, Cinema Ethiopia, and all those bands in mazegaja were hired and they were workers who were paid a monthly salary especially during the time of Haile Selassie I. That’s their actual job. They were workers who went in at 2 o’clock and left at 8. Most of us are self-employed so that also has its own impact on what you’re going to do and what you’re going to deliver to the art because you can abuse that freedom as well.

In general, I don’t agree with the comparison and I don’t think it’s fair. My generation is putting out a lot of good stuff. Think about it, if you call your days the good days and things were so well in the 60s and everything was nice, then why you would expect better things from me then, while you understand I’m living in a worse time.

So, coming to the new album, you said earlier that you were into physics; does that have anything to do with the 3, 6, 9 and the universal numbers?

Yeah, I mean you have to understand the Orthodox Church has a big explanation over this because it has a lot of knowledge about the world and the universe and everything from ancient times, but also those teachings were spread throughout the world in different ways and one of the people who understood this in early times was tesla.

He brought this idea of these three numbers being the key to unlock the universe and to understand the whole thing. If you understand things from the perspective of frequency, vibration and energy, you’d understand the world in a much better perspective.

Instead of saying me, me, you will start to say us; instead of just boosting up your ego and saying, man is everything in this world. You will understand the relationship of man in the world. And then you will protect the world.

What I’m trying to put here is for my generation to see things from a bird’s eye view. Let me put it this way, everything that we use today, phones, computer, internet, technology, all these things that we kill each other for is made by the people who understood this, these higher understandings of the world. Because how can a person make a phone that can do miraculous things without understanding the world holistically. I think the perspective that we have about ourselves and the universe is distorted and that’s why we’re very tribal and biased.

The bottom line is, I think the understanding we have about ourselves and the world should change or should be in check.

So, what I try to do with this 3, 6, and 9 is to show people that there is a higher perspective of looking at yourself, the world, how it goes and how it functions. If you understand that, everything becomes lighter, everything becomes a shape that will be understandable by the next person.

The names are inspired from that. So, when people say, oh, it’s three, it’s six, it’s nine, it’s like you’re engaging with these numbers, raising curiosity amongst listeners to look into these numbers, which will hopefully raise a question in people’s head so that they can have a better understanding of the world.

It’s always much better to look at yourself within the world. What I mean by that is like, yes, you are you, but you are in the world so know the relationship you have with the world, and then you’ll have a healthy thought, instead of saying what did the world give me? You’ll understand and you’ll start to say, what did I give to the world, what are the things that I said this morning? Most of us we’re just living inside our head, we don’t really live.

How has the experience been with Universal Records?

Well, I’m learning a lot from how the world moves, how it works, how everything is intentional; intentional in a sense that the world is moving faster. It was like going from being a small fish in a tank into a small fish in an ocean, it’s so big and sometimes it’s challenging but exciting for the most part.

I’ve seen a lot of people working day and night to make things go the right way. For me, it starts from my management company, Dots, all the way to universal music Africa and the whole team who have worked tirelessly to make things go smoother for me. I am very thankful.

The one thing I’m most thankful for is getting to release 6 at this moment, because according to our deal with the record company, I wasn’t supposed to release it now but we demanded it because I felt my generation needed it. There are songs in the album I really want to put out at this moment because my generation needs it.

They’ve been willing to compromise on things for me and understand that I’m coming from a different side of the world that they never existed in. So, it’s been challenging for them and I can understand but they they’ve been nice to me, I feel like I’m in great hands to join the world.

Other artists like Aster and Gigi have signed to international companies and represented our country. Hopefully, I’ll be able to get to do that as well. I’m following in the footsteps of giants. I hope I deliver something worth a while. Honestly speaking, to join the international world has been a dream come true.

Do you still get to work on crafts that are still true to yourself?

Of course. They do not affect my craft, rather they just help. That’s what people don’t understand. People thought they’ll make me do things their way, if that was the case, I would have never signed anything.

They’re here because they loved what I do. So, why would they touch it? But they will help me delve in deeper. They want me to experiment in our cultural music more and they also allowed me to stay here. I’m still based here; I’m producing my music on our soil. I’m still intact with the people. I’m still a part of the community.

The future is exciting. I have a full control over my artistic freedom. They don’t bend my music into anything, they even provide me with more freedom and guide me through the lines, and present me with better opportunities.

What is the perspective of 6 and what does it mean?

Yeah. So 6 means a perspective of a six-year-old. When we were at that young and impressionable age, our intentions were clear and our ego was not built the way it is now. We were not stiff. We were eager to learn and we had a better understanding of the world.

I think in order to become a better generation, we have to learn how to become young and find our inner child. To tap into my inner child, I went to kids. I went to orphanages and just spent time with the kids, communicating with them, asking them to paint me stuff.

I’ll give them words and learn their perspective. For example, I’ll ask them for testify. Like, what do you think about the word testify? And they’ll just paint me stuff. Through the genius of my graphic designers Fanuel Leul and Tsegaw Tesfa, we were able to incorporate those paintings on the album art.

I also wanted for those six-year-olds to see themselves being represented, so that they can have better guts, that our traumas cannot hurt them, for them to have a thicker skin to say no to us, if we are ever to push our biases onto them.

I want my generation to be purposeful in not passing that trauma to the young. I am hopeful this would empower them both. We are alien to kids because our biases have molded us somehow. They don’t quite vibe with us that much. When they hear their voice in my album, they’re automatically engaged through the things that I say and to the songs that I put in there. It will eventually become theirs. So, when they grow up people will not manipulate them, the way we have been manipulated.

What can we expect going forward?

“9” is coming out in December and somewhere between then and now, we’re planning on having a festival celebrating all my music with fans.

It’s going to be a series of beautiful engaging events, and till then I hope everyone enjoys 6 and gets the message.

The TPLF is the enemy of Ethiopia and the people of Tigray point blank. The government says that it would make peace with the group but as Ethiopians we can’t forgive that party even if the government fulfils its diplomatic responsibilities. I did not say the people of Tigray, rather just TPLF.

The role of Ethiopia’s government should be identified; the election board should not be giving out certificates for parties that work with terrorists. If they get a certificate, then the TPLF would need one as well.

The country is on the precipice of prosperity now. Our current state could be depicted as a nine month pregnant women ready to give birth on any day. It is always darkest before dawn, Ethiopia’s people come together even stronger when there problems pile up.

We should be careful with parties that try and create the gap between ethnicities.

How can the government enforce a justice transition? What should be included?

Justice transition means the world did not get civilized through a revolution, but rather through reforms. Reform means averting the negative impacts and carrying on already started projects.

Justice transition implies those that refuse forgiveness and acceptance from the recently started national dialogue and the people that are being accused. Each one of the perpetrators will not be brought before court but instead will have to reconcile their differences in the regions customs, which is according to justice transition.

This is the outcome of the reforms. A new education law is now being drafted, in addition to changes to the education policy. These and other innovations in teacher education are greatly appreciated.

The Association applauds the improvements and supports the next developments.

In the last three years, for example, the panda bag arrived in Djibouti and stayed for more than a month, and we were required to pay tax. We would not pay that money if the Ethiopian government was facilitating faster. We occasionally lose bags or items in a warehouse where we keep the bags.

It’s pointless for me to go over what happened. It is all well known that we simply need to take our time and evaluate everything before coming up with a way to mediate it.

- ሪፖርተር ጋዜጣ -

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Ethiopian Reporter, Political, Kibir Minister, Editorial….

Ethiopia Country Report Context

Key changes and developments in the newspaper marketplace in the past five years

According to the Ministry of Information, there were 68 newspapers and magazines published and distributed in July 2006. This is an increase from five years ago (though figures for 2000 could not be found). There are 56 newspapers and 12 magazines. Most papers are weeklies, bi-weeklies and monthlies, with only three dailies, all national, in existence. Many of the new papers in recent years have been tabloid weeklies responding to news events, such as the 2005 elections. However, some of these papers disappear when there are no strong news events to cover.

Newspaper in Ethiopia

Daily

Twice a week Weekly

Every two weeks Monthly

Source: Ministry of Information, personal communication, August 2006

The newspaper sector is limited by the country’s low literacy rates, and most titles are said to have small print runs of only about 3,000 copies. At the time of writing this report, no data could be sourced on the percentage of the adult population that reads a newspaper.

At national level, there are three daily newspapers (see Figure 8). The three national dailies are Addis Zemen (Amharic), The Ethiopian Herald (English) and the Monitor (English). The Monitor is the only private-owned daily. There is no information available to distinguish whether the remaining 53 newspapers are national or regional papers.

There are 12 national magazines; 10 published monthly, two published every two months, and two published quarterly. Ten of these magazines are in the Amharic language, and two are published in English, a monthly and a bi-monthly (Ministry of Information, personal communication, August 2006).

7.2 Investment and growth in newspapers in the past five years

There has been a significant increase in the number of papers in the past five years, with new privately-owned papers leading this growth.

However it is difficult to comment on the exact size of the newspaper market, as there is no research available in this area. Anecdotally, however, there was evidence of high demand for private papers during the May 2005 election period, but with a contraction in the number of private papers after the election.

Only a few of the newspapers, such as The Reporter (with Amharic and English editions, owned by the Media Communication Centre) and Addis Admass (in Amharic) are backed by strong private investment. Some papers have folded after not being strong enough to withstand challenges pertaining to legal or other matters. Some complain about delays in getting permits due to delay in finalisation of the provisions of the new Press Law. Another barrier to newspaper sector growth, according to the International Press Institute (IPI, 2005), has been the banning of some newspapers and the detention of journalists following the unrest after the May 2005 elections.

There is a state-owned news agency, Ethiopian News Agency, and a private local one, Walta Information Centre, both of which mainly serve the state media. Walta Information Centre is owned by the ruling party (EPRDF), so is categorised as state-owned in Figure 9. The private media do not have arrangements with these news agencies to provide them with the content they require, and this remains a major challenge for the private media. The other five news agencies operating in the country, such as Reuters and AFP, are all international.

State or government-owned/backed

Plurality, ownership and control

The private newspaper sector in Ethiopia is still very young and, because of lack of transparency around ownership, it is not known whether ownership is diverse or concentrated in a few hands. However, Kifle Mulat, president of the EFJA, states that all newspapers are under censorship and all are pro-government and controlled by the government (directly or indirectly) (K. Mulat, private communication, 1 September 2006). There is strong opposition to this view, however, from one Ethiopian editor and publisher, Mr Amare Aregawi, who argues that there is no censorship in the country because it is unconstitutional and illegal for the government to practice it.

The Minister of Information states that of the 56 newspapers currently being published, six are government-owned and 32 are privately-owned. The remaining papers are owned by Religious Organisations (8), Associations (6), Political Parties (3) and NGOs (1).

Of the 12 magazines published, 11 are privately-owned, while one is owned by a religious organisation (Ministry of Information, personal communication, August 2006).

Figure 10 below lists the 10 most-read newspapers. These papers can be classified into state, private and party papers. Addis Zemen is a daily state paper. Netsanet, Addis Admas, Ethiop, Askual, Minilik and Ethiosport are private weeklies. Party weekly papers include Oromiya, Abyotawi Dimkrasi and Woyin.

The number of newspaper readers is generally thought to be quite low, and there could be several reasons for this. First, it is possible that the culture of reading has not been properly cultivated, despite the fact that literacy has been increasing over the past few years. Another possible reason is that, in the case of the private newspapers, they cannot afford to distribute beyond the capital Addis Ababa, due to both financial and infrastructural constraints.

Newspaper Netsanet Oromiya

Abiotawi Democracy

Addis Admas Ethiop Asmat Minilik

Addis Zemen Woyin Ethiosport

Percentage

Source: Ministry of Information, personal communication, August 2006

7.4 Diversity

The past five years has seen an increase in the plurality of ideas found in newspapers. For instance, there is frequent newspaper coverage of women’s and religious issues, with some papers even published by religious institutions. Private newspapers provide more entertainment coverage than the government ones do.

The majority of the newspapers are in the Amharic language (33), and the second most common language is English (14). There are also several bi-lingual newspapers, publishing in both Amharic and English (5), and there is one newspaper that publishes in Amharic, English and French. There are also newspapers written in Oromifa (2), Tigrinya (1) and Arabic (1). (Ministry of Information, personal communication, August 2006). One interviewee expressed the need for further objective research to obtain more accurate data on readership.

7.5 Quality of newspaper reporting

With the great increase in the number of papers, there has also been an increase in journalistic work. The quality of journalism is highly uneven. Whilst some commentators describe work as lacking in ethics, independence and professionalism, others assert that concerted efforts are being made by journalists to improve standards in the sector.

7.6 Specific challenges

Challenges faced by newspapers in Ethiopia include low reading levels, the high cost of distribution outside the capital Addis Ababa, and a lack of professional journalists.

Key findings

The past five years have seen increased private sector participation in the press sector, but many of the private papers are not financially strong.

The largest group of publications is the national weeklies.

The panoply of challenges facing Ethiopia and its people show no sign of respite. Though active hostilities in the northern part of the country, have almost stopped after the forces of Tigray People’s Liberation Front (TPLF) were pushed back to Tigray from most of the territories they had captured in the adjoining Amhara and Afar regions, the security situation in a number of areas of the nation is fragile owing to the interminable endless cycle of violence that has been racking them for years now. Aside from the death of tens of thousands and the displacement of millions frequent outbreaks of internecine conflicts have led to, the unchecked rise in extremist attitudes, the cost of living, corruption, and land grabbing, among others, have made life an ordeal for the vast majority of Ethiopians. It’s in this backdrop that an incident, whose fallout could potentially plunge Ethiopia into a crisis of catastrophic proportions, recently took place.

On March 29 at least 26 people were killed and several more injured in clashes between armed groups hailing from the Minjar Shenkora Woreda of North Shewa Zone, Amhara regional state, and local militia in the bordering Fentalle woreda, East Shewa Zone of Oromia regional state. The blame game began soon thereafter with both sides issuing conflicting a slew of contradicting statements regarding the incident. Amhara region officials lay the blame on “anti-peace groups” whom they accused of perpetrating the attack. Their counterparts from the Oromia region though disputed the accusation, blaming the attack on “extremist forces operating in the Amhara region”. They also took these forces to task for displacing people and looting property in other woredas of Oromia bordering the Amhara region. It’s surprising that both the federal government and the ruling Prosperity Party (PP) have not made any overt attempt to defuse the tension between the Amhara and Oromia regional administrations even as both escalate the war of words among them.

Ethiopia is a nation that continues to be on the wrong side of the global digital divide. Only a fifth of its over 110 million people have Internet access that is expensive and often unreliable. In cognizance of the imperative to tackle the multi-faceted challenges this poses the government has embarked on liberalizing the telecom sector and adopted Digital Ethiopia 2025— a digital transformation strategy described by the government as a visionary strategy that serves as a blueprint for different sectors and institutions—as it tries to position the country competitive in the brave new digital world. Efforts to open up the telecom industry have had limited success with one international consortium awarded a license to operate telecom services in the country so far while plans to sell 45 percent of the state-owned telecoms monopoly to international buyers have been repeatedly pushed back. Meanwhile, a number of public services have begun to benefit from Digital 2025 through developments like e-government, digital ID, the national payment system, online trade registration and licensing system, electronic single-window customs clearance and electronic tax filing.

As the government ramps up its roll out of various services aligned with the digital transformation strategy, the suspension by the National Bank of Ethiopia (NBE) of digital remittance platforms, namely CashGo and MamaPay, the Bank of Abyssinia (BoA) uses has caused a furore, leading many to question whether the central bank is on the same page as the government in the latter’s quest to create an inclusive digital economy through the national digital strategy. CashGo is an international money transfer system which allows anyone abroad to transfer funds in the local currency to accounts maintained at BoA while MamaPays allows users to request payment from remitters or payment to be settled on behalf of a third party. The reasons cited by NBE to justify its decision are varied. It says both BoA and the developers of the applications behind the platforms do not possess a valid license permitting them to provide remittance services. It also alleges that the applications enable BoA to avail travelers foreign exchange through credit cards in disregard of its regulatory mandate over currency management. The regulator further raised the need to address safety and security concerns, particularly relating to privacy breaches, and ensure that local fintech companies survive the inevitable competition from foreign rivals via a major initiative currently in the works.

The developers of the applications, however, refute the points mentioned by the central bank. They argue that they are authorized fintech companies engaged in developing applications and as such do not require to have a remittance license, adding the applications were vetted by the NBE and the Information Network Security Agency before they were integrated into BoA’s system. They also suspect that foul play may be involved, saying some of the remittance companies active in the Ethiopian market probably conspired with regulators at NBE to close them down because the country would save up to USD 800 million it annually lost to them through steep service charges and redirection of the forex they receive to informal channels. Moreover, they point out that NBE’s compliance and safety concerns could have been worked out while the applications were still running.

While NBE may have grounds it deems legitimate and warrants the suspension of the operation of the digital remittance platforms, its decision is heavy-handed and lacks foresight. In the first place, it did not hold formal consultations on the matter with all the stakeholders involved. If it had demonstrated the willingness to engage them constructively, the dispute between the parties could have been amicably solved. The decision also discourages fintech companies from investing in the development of platforms that help Ethiopia bridge the digital divide. The Digital 2025 strategy aspires to transform Ethiopia’s digital landscape to accomplish such lofty goals as playing a vital role for inclusive prosperity; innovating and applying the culture, practices, processes and technologies of the digital era to respond to citizens raised expectations. The realization of the strategy requires, among others, the collaboration and commitment of everyone including government, non-governmental, development partners and societies as well as a robust commitment to increase infrastructure and put in place an enabling ecosystem. If the government is to succeed in pushing the country through digitalization and making it a viable investment depends on its dedication to reforming the bureaucracy, implementing the right regulation and creating credible institutions. As Prime Minister Abiy Ahmed (PhD) once said leveraging digital opportunities demands a new mindset and leadership style. Leaders at the central bank must take this advice to heart and adapt to the new digital environment.

The feuding between officials heading two branches of the ruling party cannot be confined to them given the party is still ethno-centric despite claiming to be a national party. In fact it has led to spats among major opposition parties active in the respective regions and social media activists, which are spewing a hateful rhetoric that could very well pit the Oromo and Amhara people, the two largest ethnic groups in Ethiopia, in a bloody conflict. The consequences of such a conflict are too horrible to contemplate. From a protracted and destructive civil war in which no side emerges victorious to a total state collapse all the scenarios facing the nation are lose-lose not only for its citizens, but also the Horn of Africa and beyond. It’s not entirely clear whether the protagonists to the ongoing verbal warfare realize that their actions are liable to lead to Ethiopia’s unraveling or are indifferent to the ensuing heavy price.

With three decades of experience in the banking industry, Mulugeta Asmare is known for his successful years at the Bank of Abyssinia. During his five year tenure as the president of the Bank until 2019, the Bank’s profit doubled to over half a billion birr, while its paid-up capital skyrocketed from a little less than one billion birr to 2.5 billion birr.

Last year, he was appointed as the president of Goh Bank, the first self-proclaimed mortgage bank in Ethiopia. The Reporter’s Selamawit Mengesha sat down with Mulugeta to learn about his new journey at Goh and his insights in the banking industry. Excerpts:

The Reporter: Tell us about your experience in the banking industry.

Mulugeta Asmare: I have been working in the bank industry for the past 31 years. I have an all-round experience in the banking industry, meaning I had started work in the banking sector as a clerk and have now reached the position of general manager. I have worked as deputy president of Abyssinia Bank for four years-and-a-half until 2019. I believe that I was able to make a lot of reforms and changes while working at Abyssinia Bank. I was faced with a lot of challenges while working at this bank, since it had a lot of shortcomings at the time.

I believe that I have contributed a lot towards the betterment of the banking system at Abyssinia Bank, for it to get to the stage that it is in now. We started off by inviting global market leaders like Deloitte, PWC, KPMG, and Ernest & Young to participate in a bid to frame a five-year strategy for the bank. Winning the bid, Ernest & Young have done a remarkable job in improving our system-wide operations. We used to have such work done by in-house experts. So, this is the first time that we enlisted the services of a globally renowned company. We have focused on manpower development and raising pay, measures that have surely contributed to the development of the bank.

Following my previous stint with Abyssinia Bank, I used to focus on private contractual jobs here and there. I was informed of this new concept of establishing a mortgage bank system which was unique and different, and it got my attention. After establishing the bank and selling the shares and raising enough capital to establish the bank, we couldn’t find the right person to run it. The 11 founding members are well-known business professionals that have worked for years in the banking system, and they wanted me to take the role. I couldn’t say no to such noted personalities as former National Bank President Getahun Nana.

Before delving into the mortgage bank, I would like to raise a question regarding saving. Most people open bank accounts for saving purposes while few dare to ask for loans. Why do you think that is the case?

The major mission of a bank is to help develop the culture of saving. It is evident that once there is a saving, the next step is to provide a loan. Without savings, there are no loans. Customers can resort to saving for they have some future plans to invest or to purchase something, or it can just be a leftover from their monthly expenses. This saving is directly forwarded to producers and service providers who are planning to expand a business, or who are looking forward to enter into new business ventures. The main job of a bank is to act as an intermediary between the depositor and the borrower.

Banks have advanced and sophisticated role nowadays compared to the old times. I believe that low-scale savings at the banks is the main reason for the small number of loans. The loans are mostly provided to customers that have a convincing project idea with a guaranteed profit. You don’t find such projects every day, not everyone can be a producer, a service provider or a farmer. Banks have a limited access to capital and deposit, which is the reason for setting strict criteria. These are some of the reasons for having more savings while there are less loans being provided.

The last three years have seen a remarkable change in the banking sector. The number of private banks has increased to 23, including Goh Betoch Bank, which is managed by you, and an interesting enterprise at that. Why do you think private banks are increasing at such a pace? Is it because the banking industry is profitable?

It is obvious that the banking industry is becoming more profitable today than ever. All banks are recording a profit since the market demands such service. Even though our economy is underdeveloped, the banking sector is essential to reach the population that is not getting access to the service. Until recently, only 25 percent of the population was banked. But that is changing thanks to the increasing number of banks and the opening of branches in the regions. This shows that the market is still untapped. That being said, the capital requirement to establish a bank is also increasing drastically. The set of criteria laid down by the National Bank is complex. Therefore, I don’t believe that we have banks mushrooming left and right. For a population of 110 million, the number of banks we have is far from enough. I think the main challenge for potential new banks forming is the rules set by the central bank. Allowing specialized banks to open branches in the country is not yet a trend but it’s a must. We have paved the way as a mortgage bank but there can be many others that specialize in farming, industry, housing, import and export, etc.

Goh Bank specializes in the housing sector. I’m sure you’ve conducted a thorough research before establishing the bank, including the case of the then Construction and Business Bank. What is the sustainability plan?

The Construction and Business Bank has its own flaws. During the reign of the Derg, it was taken over by the government and it was functioning under the name of Housing and Savings Bank, the only service provider specializing in mortgage banking. It was later on transformed into a commercial banking system and was named as “Construction and Business Bank.” Keep in mind that both the Constriction and Business Bank and Commercial Bank were providing the same traditional banking service under a different name. The bank didn’t have enough capital. Therefore, it has struggled to keep in the same pace as private banks. The Construction and Business Bank later on merged with the Commercial Bank since it couldn’t stand on its own. This has caused a gap in the mortgage banking system. It provides a service that is in high demand. That is the main reason for establishing the Goh Betoch Bank with a view to addressing the problem. A lot of customers have savings in their account that is not enough to purchase a house without bank financing. These people can opt to switch funds used to rent a house in favor of mortgage payments.

Does the bank provide mortgage service or does it focus on commercial services?

The bank purely provides mortgage services. It is also registered with the national bank as a provider of mortgage services. We are the first bank in Ethiopia to offer this service. We have done rigorous feasibility studies. We haven’t provided any commercial loans to businesses. We only give loans to customers who want to buy a house.

Is there a push from the government to make the service partially commercial?

Actually, we are the ones pushing. That is since the country doesn’t have laws regulating such a specialized banking system. According to the law in the books, all banks are treated equally, be they private or government. But we are demanding a special treatment, and the national bank has lately been cognizant of this fact.

Do you cater to folks lower in the socio-economic ladder, and can you also reflect on the high cost of housing in Ethiopia?

It would take days to discuss issues regarding housing. In Ethiopia, there are many programs that were drafted in order to provide solution to these problems. For instance, the Integrated Housing Development Program was developed by the government in 1997. This condominium-housing project was later on developed into the ‘40/60’ housing. The idea was to construct a lot of housing units and help the general public own their house. A mere 400,000 housing units have so far been built. Many Ethiopians have been into the culture of housing saving schemes for years now. There is a study indicating that 400,000 housing units needed to be built every year in order to meet demand in Ethiopia. Specifically, 100,000 housing units should be constructed in Addis Ababa every year, but a tenth of that is being accomplished.

What is more, the already existing houses in Ethiopia do not meet habitat standards established by the United Nations. Based on this requirement, around 74 percent of the housing units in Addis Ababa need to be reconstructed since they do not meet the standard. The main reason for the soaring price of houses is the ever rising cost of land as well as construction materials. The paucity of hard currency coupled with unbridled inflation has worsened the situation. The current going rate for a housing unit is beyond the reach of middle and lower income citizens.

According to our study, medium income is 30,000 and up, way below the threshold to afford buying a new house. We should also look into our construction system that is backward and traditional. It takes two to three years to build a house. Time is essential; we should be able to construct houses in one year. If we want housing to be affordable, we should look into ways of cutting down the price of land and construction inputs as well as employing modern technology. Financing should also be factored in, and this is where we come in.

Apart from huge outlays by private banks, the government is also spending 50 to 60 million birr to construct condominiums. These houses are designed to be affordable to low-income people, but that’s not the case. How does your bank intend to make housing affordable to middle- or low-income citizens?

The housing problem can’t be solved only by private banks. The main role should be played by the government since having shelter is a human right. The government being a responsible body should provide land at a lower price or for free to the lower and medium income people. What’s more, the government should regulate the price of construction materials besides encouraging their ample supply. Banks as financers should also expedite provision of capital in the form of loans.

Most banks are reluctant to engage in mortgage banking. How come you chose it?

We dared to join the banking sector, especially mortgage financing, because of the need for one on the market. Our shareholders took the initiative to establish a huge institution that can support the country’s economy. The realty on the ground in Ethiopia is such that a 40-year-old individual lives with his or her parents. This is so due to the dearth of financing schemes to own one’s house. Therefore, we are trying to help individuals with limited means.

What is the plan this year as regards providing mortgage loans for customers?

We have started business since October 25. We haven’t provided much service because we just launched our bank a few months ago. But we are planning to provide one billion birr in loans until the end of the year. Based on the outlook of the economy, this might not be attainable, but that’s the plan.

How much would that be per client?

It depends on the customer. Some might take a 10 million-birr loan while others ask for more. Anyways, we are planning to provide 1 billion birr in loans until the end of this year. While framing this plan, we were under the impression that we can go around the country and find deposits, but there were many unforeseen events such as the war that disrupted the economy. Therefore, we might not be able to meet the target.

So there is no plan to provide this service to other regions?

We will cover other regions as well. We might not have many branches like other banks but being a mortgage bank, we are going to employ technology to scale up services. The main branch is in Addis Ababa while the second branch is in Dire Dawa and the third branch is around Lebu. The fourth branch in the CMC area goes online this month. We serve cities that have a high housing demand such as Hawassa, Adama, Bahir Dar,Gonder and Mekelle.

What do you think of foreign banks establishing mortgage banks in Ethiopia? How would they affect the already existing mortgage market?

Although I’m aware that foreign banks are joining, the timeline is not yet announced. A healthy competition is not bad; I don’t believe that they will take over the banking business instantly. The government will surely have some sort of plan in order to institute a gradual change. Some requirements might also be in order such as a fixed amount of capital. They should purchase shares to be able to establish a bank in Ethiopia. For instance, if a foreign bank buys 30 to 40 percent share from a private bank, then it will be perfect since they can invest in human-resource development and bring in capital for the existing bank.

Mortgage bank is no different from other private banks; I believe that foreign banks can help a lot since there is an untapped market. We can assist them in expediting the process of setting up shop. If foreign banks buy shares from us, then they can avoid that hustle. We would like the competition, although we are not sure when they can come to the market; we are preparing psychologically to work with them.

Can you briefly explain what it takes to get mortgage?

Those who seek loan at our bank, we welcome them all. We have started giving service for most customers now. It is required for the customer to save a minimum of 20 percent of the selling price of the house at our bank. And then, we can provide the remainder 80 percent. The other unique system is that we will provide 30 years grace period for paying the loan back to the bank. Our interest rate is lower than other banks’. For instance, Commercial Bank provides loans at 15 to 26 percent rate while we can provide loans for less. Our interest rate is flexible depending on the currency and frequency that a customer would return the loan. This makes us unique.

Customers can’t knock on any private bank and ask for a loan to purchase a house. Most banks provide a mortgage service to their employees, or for selected VIP customers that pay in foreign currency such as embassies, NGOs and exporting companies. We only require that a customer has a fixed monthly salary and that he or she can pay the loan back at the provided timeline. There’s also no need for any collateral since we use the house that will be purchased as collateral by itself. We are trying to reach the public with this information to mitigate the housing problem.

Since the public is very eager to get this service, what can we expect from your bank?

We would like to pass the message that any customer that has the financial means and the interest to purchase or construct a house, we are eager to help. Come to our bank, open a bank account and save the minimum amount of money required for purchasing the house that you want to have. We will advise you on the best option. We are also planning to construct houses by ourselves.

With three decades of experience in the banking industry, Mulugeta Asmare is known for his successful years at the Bank of Abyssinia. During his five year tenure as the president of the Bank until 2019, the Bank’s profit doubled to over half a billion birr, while its paid-up capital skyrocketed from a little less than one billion birr to 2.5 billion birr.

Last year, he was appointed as the president of Goh Bank, the first self-proclaimed mortgage bank in Ethiopia. The Reporter’s Selamawit Mengesha sat down with Mulugeta to learn about his new journey at Goh and his insights in the banking industry. Excerpts:

The Reporter: Tell us about your experience in the banking industry.

Mulugeta Asmare: I have been working in the bank industry for the past 31 years. I have an all-round experience in the banking industry, meaning I had started work in the banking sector as a clerk and have now reached the position of general manager. I have worked as deputy president of Abyssinia Bank for four years-and-a-half until 2019. I believe that I was able to make a lot of reforms and changes while working at Abyssinia Bank. I was faced with a lot of challenges while working at this bank, since it had a lot of shortcomings at the time.

I believe that I have contributed a lot towards the betterment of the banking system at Abyssinia Bank, for it to get to the stage that it is in now. We started off by inviting global market leaders like Deloitte, PWC, KPMG, and Ernest & Young to participate in a bid to frame a five-year strategy for the bank. Winning the bid, Ernest & Young have done a remarkable job in improving our system-wide operations. We used to have such work done by in-house experts. So, this is the first time that we enlisted the services of a globally renowned company. We have focused on manpower development and raising pay, measures that have surely contributed to the development of the bank.

Following my previous stint with Abyssinia Bank, I used to focus on private contractual jobs here and there. I was informed of this new concept of establishing a mortgage bank system which was unique and different, and it got my attention. After establishing the bank and selling the shares and raising enough capital to establish the bank, we couldn’t find the right person to run it. The 11 founding members are well-known business professionals that have worked for years in the banking system, and they wanted me to take the role. I couldn’t say no to such noted personalities as former National Bank President Getahun Nana.

Before delving into the mortgage bank, I would like to raise a question regarding saving. Most people open bank accounts for saving purposes while few dare to ask for loans. Why do you think that is the case?

The major mission of a bank is to help develop the culture of saving. It is evident that once there is a saving, the next step is to provide a loan. Without savings, there are no loans. Customers can resort to saving for they have some future plans to invest or to purchase something, or it can just be a leftover from their monthly expenses. This saving is directly forwarded to producers and service providers who are planning to expand a business, or who are looking forward to enter into new business ventures. The main job of a bank is to act as an intermediary between the depositor and the borrower.

Banks have advanced and sophisticated role nowadays compared to the old times. I believe that low-scale savings at the banks is the main reason for the small number of loans. The loans are mostly provided to customers that have a convincing project idea with a guaranteed profit. You don’t find such projects every day, not everyone can be a producer, a service provider or a farmer. Banks have a limited access to capital and deposit, which is the reason for setting strict criteria. These are some of the reasons for having more savings while there are less loans being provided.

The last three years have seen a remarkable change in the banking sector. The number of private banks has increased to 23, including Goh Betoch Bank, which is managed by you, and an interesting enterprise at that. Why do you think private banks are increasing at such a pace? Is it because the banking industry is profitable?

It is obvious that the banking industry is becoming more profitable today than ever. All banks are recording a profit since the market demands such service. Even though our economy is underdeveloped, the banking sector is essential to reach the population that is not getting access to the service. Until recently, only 25 percent of the population was banked. But that is changing thanks to the increasing number of banks and the opening of branches in the regions. This shows that the market is still untapped. That being said, the capital requirement to establish a bank is also increasing drastically. The set of criteria laid down by the National Bank is complex. Therefore, I don’t believe that we have banks mushrooming left and right. For a population of 110 million, the number of banks we have is far from enough. I think the main challenge for potential new banks forming is the rules set by the central bank. Allowing specialized banks to open branches in the country is not yet a trend but it’s a must. We have paved the way as a mortgage bank but there can be many others that specialize in farming, industry, housing, import and export, etc.

Goh Bank specializes in the housing sector. I’m sure you’ve conducted a thorough research before establishing the bank, including the case of the then Construction and Business Bank. What is the sustainability plan?

The Construction and Business Bank has its own flaws. During the reign of the Derg, it was taken over by the government and it was functioning under the name of Housing and Savings Bank, the only service provider specializing in mortgage banking. It was later on transformed into a commercial banking system and was named as “Construction and Business Bank.” Keep in mind that both the Constriction and Business Bank and Commercial Bank were providing the same traditional banking service under a different name. The bank didn’t have enough capital. Therefore, it has struggled to keep in the same pace as private banks. The Construction and Business Bank later on merged with the Commercial Bank since it couldn’t stand on its own. This has caused a gap in the mortgage banking system. It provides a service that is in high demand. That is the main reason for establishing the Goh Betoch Bank with a view to addressing the problem. A lot of customers have savings in their account that is not enough to purchase a house without bank financing. These people can opt to switch funds used to rent a house in favor of mortgage payments.

Does the bank provide mortgage service or does it focus on commercial services?

The bank purely provides mortgage services. It is also registered with the national bank as a provider of mortgage services. We are the first bank in Ethiopia to offer this service. We have done rigorous feasibility studies. We haven’t provided any commercial loans to businesses. We only give loans to customers who want to buy a house.

Is there a push from the government to make the service partially commercial?

Actually, we are the ones pushing. That is since the country doesn’t have laws regulating such a specialized banking system. According to the law in the books, all banks are treated equally, be they private or government. But we are demanding a special treatment, and the national bank has lately been cognizant of this fact.

Do you cater to folks lower in the socio-economic ladder, and can you also reflect on the high cost of housing in Ethiopia?

It would take days to discuss issues regarding housing. In Ethiopia, there are many programs that were drafted in order to provide solution to these problems. For instance, the Integrated Housing Development Program was developed by the government in 1997. This condominium-housing project was later on developed into the ‘40/60’ housing. The idea was to construct a lot of housing units and help the general public own their house. A mere 400,000 housing units have so far been built. Many Ethiopians have been into the culture of housing saving schemes for years now. There is a study indicating that 400,000 housing units needed to be built every year in order to meet demand in Ethiopia. Specifically, 100,000 housing units should be constructed in Addis Ababa every year, but a tenth of that is being accomplished.

What is more, the already existing houses in Ethiopia do not meet habitat standards established by the United Nations. Based on this requirement, around 74 percent of the housing units in Addis Ababa need to be reconstructed since they do not meet the standard. The main reason for the soaring price of houses is the ever rising cost of land as well as construction materials. The paucity of hard currency coupled with unbridled inflation has worsened the situation. The current going rate for a housing unit is beyond the reach of middle and lower income citizens.

According to our study, medium income is 30,000 and up, way below the threshold to afford buying a new house. We should also look into our construction system that is backward and traditional. It takes two to three years to build a house. Time is essential; we should be able to construct houses in one year. If we want housing to be affordable, we should look into ways of cutting down the price of land and construction inputs as well as employing modern technology. Financing should also be factored in, and this is where we come in.

Apart from huge outlays by private banks, the government is also spending 50 to 60 million birr to construct condominiums. These houses are designed to be affordable to low-income people, but that’s not the case. How does your bank intend to make housing affordable to middle- or low-income citizens?

The housing problem can’t be solved only by private banks. The main role should be played by the government since having shelter is a human right. The government being a responsible body should provide land at a lower price or for free to the lower and medium income people. What’s more, the government should regulate the price of construction materials besides encouraging their ample supply. Banks as financers should also expedite provision of capital in the form of loans.

Most banks are reluctant to engage in mortgage banking. How come you chose it?

We dared to join the banking sector, especially mortgage financing, because of the need for one on the market. Our shareholders took the initiative to establish a huge institution that can support the country’s economy. The realty on the ground in Ethiopia is such that a 40-year-old individual lives with his or her parents. This is so due to the dearth of financing schemes to own one’s house. Therefore, we are trying to help individuals with limited means.

What is the plan this year as regards providing mortgage loans for customers?

We have started business since October 25. We haven’t provided much service because we just launched our bank a few months ago. But we are planning to provide one billion birr in loans until the end of the year. Based on the outlook of the economy, this might not be attainable, but that’s the plan.

How much would that be per client?

It depends on the customer. Some might take a 10 million-birr loan while others ask for more. Anyways, we are planning to provide 1 billion birr in loans until the end of this year. While framing this plan, we were under the impression that we can go around the country and find deposits, but there were many unforeseen events such as the war that disrupted the economy. Therefore, we might not be able to meet the target.

So there is no plan to provide this service to other regions?

We will cover other regions as well. We might not have many branches like other banks but being a mortgage bank, we are going to employ technology to scale up services. The main branch is in Addis Ababa while the second branch is in Dire Dawa and the third branch is around Lebu. The fourth branch in the CMC area goes online this month. We serve cities that have a high housing demand such as Hawassa, Adama, Bahir Dar,Gonder and Mekelle.

What do you think of foreign banks establishing mortgage banks in Ethiopia? How would they affect the already existing mortgage market?

Although I’m aware that foreign banks are joining, the timeline is not yet announced. A healthy competition is not bad; I don’t believe that they will take over the banking business instantly. The government will surely have some sort of plan in order to institute a gradual change. Some requirements might also be in order such as a fixed amount of capital. They should purchase shares to be able to establish a bank in Ethiopia. For instance, if a foreign bank buys 30 to 40 percent share from a private bank, then it will be perfect since they can invest in human-resource development and bring in capital for the existing bank.

Mortgage bank is no different from other private banks; I believe that foreign banks can help a lot since there is an untapped market. We can assist them in expediting the process of setting up shop. If foreign banks buy shares from us, then they can avoid that hustle. We would like the competition, although we are not sure when they can come to the market; we are preparing psychologically to work with them.

Can you briefly explain what it takes to get mortgage?

Those who seek loan at our bank, we welcome them all. We have started giving service for most customers now. It is required for the customer to save a minimum of 20 percent of the selling price of the house at our bank. And then, we can provide the remainder 80 percent. The other unique system is that we will provide 30 years grace period for paying the loan back to the bank. Our interest rate is lower than other banks’. For instance, Commercial Bank provides loans at 15 to 26 percent rate while we can provide loans for less. Our interest rate is flexible depending on the currency and frequency that a customer would return the loan. This makes us unique.

Customers can’t knock on any private bank and ask for a loan to purchase a house. Most banks provide a mortgage service to their employees, or for selected VIP customers that pay in foreign currency such as embassies, NGOs and exporting companies. We only require that a customer has a fixed monthly salary and that he or she can pay the loan back at the provided timeline. There’s also no need for any collateral since we use the house that will be purchased as collateral by itself. We are trying to reach the public with this information to mitigate the housing problem.

Since the public is very eager to get this service, what can we expect from your bank?

We would like to pass the message that any customer that has the financial means and the interest to purchase or construct a house, we are eager to help. Come to our bank, open a bank account and save the minimum amount of money required for purchasing the house that you want to have. We will advise you on the best option. We are also planning to construct houses by ourselves.

Shewit Emanuel is the current country director of Farm Africa, an international NGO established 35 years ago. It started out in Kenya but has branched out to Ethiopia, Uganda, Tanzania and the DRC.

Active in majority of eastern African countries, it is a specialized NGO focusing on natural resource management and business development linked to agriculture including livestock. Yosthena Aynalem of The Reporter sat down with Shewit to discuss smart agriculture in Ethiopia. Excerpts:

The Reporter: In a country where agriculture dominates, what would you say you have achieved thus far?

Shewit Emanuel: In a nutshell, one of the biggest achievements so far is that we exclusively work with smallholder farmers. What we are trying to do is to ultimately enable them to move out from poverty and become a commercial farmer who is self-sufficient.

Developing methodologies that are sustainable, inclusive and impactful is also one of our achievements. That’s our own target at the end of the day, when we leave, we want to make sure the work continues and the farmers continue to thrive with the support that we have started.

We operate all over Ethiopia. Unfortunately, some of the projects have ended in some regions, but we have footprints across all the regions within Ethiopia. The biggest achievement starts from increasing the income of the smallholder farmers we supported to reducing deforestation as well as supporting Ethiopia sell carbon credit to the international market. That is actually the newest achievement. We have also supported farmers to sell coffee directly to international markets.

Since vertical intégration is allowed now, farmers don’t have to go to the Ethiopian Ccommodities Exchange (ECX) anymore. If you can connect them with exporters, they can directly sell to the international market. The whole point is to reduce the middle men for the farmers and get the fairest prices for them.

Food insecurity is a recurring problem in Ethiopia and Africa. Many approaches have been applied to reduce food insecurity but nothing seems to avert it thus far. Is there any approach you have tried that is poised to be successful?

Nowadays, everybody’s moving into climate smart agriculture and unless all your interventions are becoming climate smart, you are bound to go back to that vicious cycle of droughts and flooding; which is both damaging to farmers. So, making sure farmers practice climate smart agriculture is the number one thing that we are working on.

One of the things that Farm Africa is actually pioneering and becoming innovative and a champion of is the use of integrated landscape management. This means to look at the challenge holistically, you cannot talk about conservation of land without talking about the livelihood of the people.

The majority of past projects, if you look at them, are about conservation without addressing why the community is damaging the environment? Unless you tackle that, you are not going to sustain it and all your efforts will be for nothing.

It also has to be inclusive of everybody. Most of the time, when a project starts, they focus on the direct beneficiaries. Let me give you a good example. One of our biggest projects is in Bale Eco region, where we’ve been operating since 2016. Initially, we were focusing on the regions communities and when the current drought occurred, the lowland communities came looking for water and resources towards the forest. So, all the conservation that we made, all the protection of the forest become under threat.

So, what we tried to do is expand our support, with the support from the Norwegians and other likeminded donors. It is not just the highland communities, but the lowlands are also included now. We have somewhat built resilience so that they don’t have to come to the forest.

And to be fair, even though 1.6 million people live within Bale, as direct beneficiaries, 12 million people depend directly on the forest. So, to address their need, everything from livestock fodder and irrigation is being provided, moving them into climate smart agriculture to become sustainable. They then become the protectors of the forest themselves, becoming part of the solution.

The approach we advocate for is an integrated landscape management where you can make your intervention impactful, sustainable and more importantly, inclusive of everybody, including women, pastoralists and nomads.

Does Farm Africa give lessons to these people or just resources?

Not exactly. When I say climate smart agriculture, there are different kinds of approaches that we use. Starting from the training itself such as when to plant, how to plant and what type to plant, and everything that has to do with linking farmers is included.

It could be providing improved seeds or making sure that they move to organic fertilizers or connect them to the local market. The majority of farmers’ problem is linkage; they just need to be connected with the agro-dealers so they can get the seed, fertilizers, and safe deliver of their harvests to the market. And once they produce, they can aggregate it and sell it at a good price.

We also support the enabling environment, which means working with the government to make sure that the necessary policies and protection are there. At the end of the day, we need to build the capacity of the government. They are the ones we are making sure we align with, since they will take it forward. We can show it on a small scale for the government to expand it at a larger scale.

The climate smart market systems project in Amhara region that we piloted, is now being rolled out to all over Ethiopia, modified depending on the region and soil conditions. The value chain may be different, but in terms of supporting the full spectrum of the value chain, that’s what we do, so that farmers have the right tools and information on a timely basis.

Urban farming is something that is said will reduce food insecurity and that you are doing something along those lines. Can you tell me more about those projects?

Sure. When Farm Africa was actually set up, our attention was exclusively focused on rural farmers, but what has become very clear is that you cannot address the rural challenges if you are not addressing urban challenges.

Urban poverty is on the rise and food insecurity is becoming as critical as those in rural areas.

The government requested us to support them on how to improve urban agriculture. With that, we started to pilot a project in the Ministery of Planning and Development’s compound because they have the space. We have started testing out the pilot phase, trying to look at what urban agriculture looks like, if it is sustainable, and how the farming methodology works.

We are now actually setting up; the clearing has been done and the design has been finalized. We are left with the planting processes, and we hope in the next couple of months to have the first produce available. It’s not just crops we are producing. We are also piloting fish as well as poultry so that everybody can practice it.

If you were to go to rural areas, there is space, you can do horizontal farming, but in urban areas, we don’t have that space. However, vertical agriculture is the answer. We are coming up with new kinds of innovative ways to produce food at a scale that is required to feed the local community. We are working with around 105 households for now, including women and unemployed youth. We just started that this year. So, it’s still at the early stages.

So what can urban settlers do? Like you said, these projects will encourage them, but considering there’s inflation now, there’s even more food insecurity, which is compounded by the war.

That’s why we encourage the use of your back backyard or whatever space you have. It does not require space. What we are trying to show is that you can do this vertical farming. Within a limited space, you can actually produce enough, to feed your family at a lower cost because inflation is becoming an issue. Families are barely feeding themselves, so at least it supplements their food intake and more importantly ensures nutritional balance.

Scholars suggest encouraging farmers to diversify their source of income to fight food insecurity. One of the options is to promote off-farming activities. Is that being implemented? If so, is it working?

Unfortunately, this concerns the lack of knowledge. The diversity is not as much as you would expect it to be. As part of the business development, we exclusively focus on income generating activities that you can do beyond agriculture. You need to diversify.

The coffee producers used to only produce coffee and farm forests. So, instead of farming the forest and cutting down trees, we showed them they can do forest honey, forest coffee, incense and other products, helping them to diversify their income stream.

A lot of the evaluation reports can be shared on, for instance, income. We increased their income by 143 percent. Not only were they able to increase the volume but also the quality. Now, almost all our projects, be it in Bale or Illu Aba Bora, all of them are now 100 percent export quality standard. And by supporting them change into a cooperative, they could buy better machines and so on, to aid in the quality of the product, instead of using traditional means and do less damage to the product. The coffee they produce now has scaled from grade six to grade one.

But you need to provide them the option and training, ranging from the know-how, all the way to even financial literacy. We do a lot of voluntary saving and loans, by setting them up with associations so that they are able to save money and get loans to buy better inputs and be able to negotiate better with dealers.

Ethiopia has been hit by a drought recently and many cattle have died as a result. There are other east African countries going through the same thing, probably in countries Farm Africa is involved in. So why do you think countries like Ethiopia are being affected by these things more often than the rest of the world?

Unfortunately, we are still rainfall dependent and one of the biggest impacts of climate change is making this cycle of drought more frequent than ever before. It used to occur every 10 years or so but now it happens every two or three years.

So, unless we equip both the highland and the lowlands with the necessary climate smart interventions, they will still suffer. We have a huge project in Borena and mobilized fodder to be delivered as an emergency, because the animals are crucial for their livelihoods. I think it was reported to cost more than five million birr.

The second one was to make sure the ecosystem is protected because that generates the water that goes to the lowlands. The intervention here has a huge impact at the lower catchments. That is why you need to make sure your interventions are holistic. Just by protecting the Bale eco region, you protect 12 million people’s livelihood, livestock and food.

The support is not only in providing materials, but to improve small–scale irrigation, pound point constructions and watershed management, to become drought resilient.

Several projects have been implemented by donors and other NGOs that work on resilience, capacity building and the like. But soon after their launch and brief success, they dwindle out. What do you think is happening in the middle? Why does the impact subside quickly?

The problem lies in the projects design. You have to plan to make it sustainable. When we set up a project, we have to prioritize carefully. If you don’t do that, then what happens is you’ll just be replacing one challenge with another and the impact would be temporary.

Our intervention should be as a facilitator, not actors. If you become an actor, then you are disrupting the market. What we are trying to do is to become the catalytic process, by working clearly with the government, like the Ministry of Agriculture and other stakeholders, so that policies do not contradict.

When we set up the project initially, deforestation was very high. Awareness raising and capacity building campaigns were held not only with the government, but also the communities, on why they need the forest, and understanding why the forest was damaged was very critical.

By introducing a specific blend of coffee, which grows under a shade, to farmers, which fetches a higher market price, the community has started to protect the forest by themselves. By giving them ownership and accountability, when you leave, it will not stop.

That is why you have to be very careful and make sure you have addressed the challenges that surround it.

You mentioned traders usually get more money than farmers, and Farm Africa is doing things to help in this aspect. Could you elaborate more on that?

First, you have to improve their yield per hectare because they usually sell it to the local market due to the low yield of crops they harvest. So, increasing the yield per hectare and then the quality is crucial. Empowering and connecting them with the market also helps them know the market value of their products.

women are paid less in the coffee sector, even though they do just as much, if not more. Is there anything done to empower women into joining the sector?

We assessed where women were involved in the value chain of coffee. The majority of women were found at production sites, such as planting or coffee picking, but you see them less involved as you go higher in the value chain. That is why they earn less because they’re at the lower end of the value chain.

We are trying to build the capacity, knowledge and their participation at the higher end of the value chain and make sure they’re involved outside of the production itself. They must have the power and skills to take their matters to the union and get better prices. And in parallel, find them the necessary financing. That is why around 80 percent of our beneficiaries are woman.

Do you get resistance from the community while doing this?

Not so much. We undertook awareness raising campaigns before we started, to make sure they understand why not everybody had to be part of the growth, but nobody should be left behind at the end of the day either. That’s our principle.

Since the demand for coffee is so high, they don’t see it as competition, they just need more support. It is usually competition that makes you push each other a lot of the time, but now the demand is so much, especially for forest coffee, what’s available is not enough.

Unfortunately, the drought has affected us this season and the amount of coffee we are selling this year is going to be less than last year.

Is there any forecasts as to what the effects of the drought will look like in the coming few months?

No, we have not done that per say, but I know FAO is working around the forecast. We’re coordinating, collaborating and sharing our lessons, not just with likeminded NGOs, but with the government and donors, so that our aggregated knowledge can be able to solve the problem. We are also coordinating with the Disaster Risk Management Commission right now, chaired by the FAO.

Another major problem in Ethiopia’s farming sector is landlessness. Authorities would like to hear recommendations to avert problems arising due to landlessness. What would you like to recommend in this regard?

So, we are not going to solve the issue of land, but what we can do is to come up with ways that we can use the land efficiently and effectively. Once the farmers understand how to increase their yield per hectare, they can increase their labor input as well.

For example, when one of our coffee farmers started working with us, he could barely feed his kids or even send them to hospital. Now, from the coffee sales, he has not only generated substantial income, but has also diversified and is setting up stores in Bale. He also managed to employ 24 youth to help him in the coffee production.

So that’s how we address it by making sure you are climate smart and generating the number of jobs needed to absorb landless youth. Otherwise, you cannot solve the land issue, what you can do is only give access to it.

There are a lot of mechanisms you can do to address the issue. But from Farm Africa’s point of view, what we’re trying to do is to increase the yield per hectare and capabilities of farmers, so that they can hire more people.

From your experience, what has been the hardest thing to overcome in Ethiopia?

We haven’t been able to address or mitigate the impacts of climate change. For me, it’s always been three steps forward and three steps backwards, but we are going in the right direction. Until we address and minimize those impacts and make sure that the farmers move from rain–fed agriculture to a more sustainable climate smart agriculture, it will be difficult.

Access to information and inputs is crucial. We are doing a lot of studies on value chains, different crops and fruits and pulses, and are we disseminating enough information to everybody to make an informed decision, so that they can produce what the market wants.

If you go to speak to most of the farmers in rural areas, they produce using traditional practices. If they do not wait for rain anymore, then they can produce more harvest per year.

Does Farm Africa work on logistics as well?

No, not on logistics, but we try. What we are trying to do is to connect them with the dealers so they can come. The dealers will only come if they can find value. That is why we want to make sure the farmers are organized in cooperatives, so that when they come for the coffee, they can get 40 tons to 50 tons. The volume will make it interesting for the private sector. But, the private sector has to be part of the solution as well.

Do you have any comments regarding the crisis that is going on in the country right now and how it’s affecting the agricultural sector?

As an NGO, we are not allowed to talk about it. We are not allowed to talk about rights. But, Farm Africa is committed to support the reconciliation and recovery process. That’s where we can come in because we are not even a humanitarian organization. So, we can’t even support these kinds of interventions.

What we can do is once stability and security is established, we can quickly go in and support farmers to quickly recover and catch up with the coming harvest season. So, through the post conflict recovery, we have a lot we can contribute, but beyond that, not so much.

Is there anything you’d like to add that would help authorities, individuals or farmers?

Working with farmers is still the solution. They have the knowledge and know-how; you just have to be the catalyst to help them and enable them achieve their goals. We want to make sure the economy thrives.

We need to improve our productivity and production. Everyone including the government, NGOs, beneficiary communities themselves have a role to play to contribute to this. If we do that, we are able to not only feed our own society, but be able to export and help others.

Eskinder Nega is a household name in Ethiopia. Known for publishing newspapers with articles critical of the government, Eskinder has been in the media industry for over 25 years. In 2019, he established Balderas Political Party.

Though he lost the last election to the ruling party, he is still actively participating in political matters. He was among the people arrested in the aftermath of the killing of Hachalu Hundessa and was released a year and a half later on January 2022.

The Reporter’s Amanuel Yilkal and Samson Berhane sat down with Eskinder to understand his journey in the media industry and politics. Excerpts:

The Reporter: Let me take you back to the 90s when you started publishing Ethiopis after your return from the US. How were you attracted to the media world?

Eskinder Nega: I lived in the US for many years. When I returned to Ethiopia, the country was in the midst of changes. There were many magazines, while the only privately-owned newspaper was Eyita. The magazines were not assertive and they feared criticizing the government and its policies. They used to beat around the bush.

I was able to learn a lot from the media environment in the US, which is free to criticize the government without being censored. It is not because I am a daredevil (Jebdegna) as some see me but since I was aware of the media landscape in the US, I wanted to try a new thing.

Then I started publishing Ethiopis, a publication that was ardently challenging the ruling government back then. It continued till October 2006. Ever since I started publishing the paper, I was a target of the Tigray People Liberation Front (TPLF). I was in custody for over 10 years in the period of the TPLF-led government and another one and half years after the then Oromia People Democratic Party (OPDO) started to lead the country.

You were arrested for the first time due to a column dubbed “Fascism in Tigray” that appeared on Ethiopis.

“Facism in Tigray” appeared in the second edition of Ethiopis. The first edition’s cover story was the “killings at Sidst Kilo.” It was initiated after the death of students who opposed the secession of Eritrea from Ethiopia. It was a story that made officials angry. And when we published “fascism in Tigray” in the second edition, we became a target. May his soul rest in peace; Tesfaye Asmare was the Editor-in-Chief of the paper, while I was a publisher back then.

We did the “Fascism in Tigray” story because people in Tigray were not allowed to be a member of a party other than the TPLF back then. Those who did not become a member of the TPLF back then were not only being arrested but were also being isolated from Idir and other social institutions.

Many were isolated just because they didn’t want to be a member of TPLF. We opposed this in our article. The situation in Tigray was no different from totalitarianism, while what was happening in Addis was authoritarianism. The TPLF was controlling every step of the people in Tigray, where there was no freedom of press. In Addis, there was a freedom of press, though it was limited and was a show to create an image that the media landscape is improving after the fall of the Derg Regime.

You are saying the “Fascism in Tigray” column intended to voice the concerns of people in Tigray. However, this goes against what another newspaper of yours was publishing in a column dubbed “Wegid Yihuda”, authored by Tadios Tantu. Articles written under this column were for long criticized for belittling ethnic Tigrayan’s.

Whenever you criticize dictators, they always give you a name. When we were publishing Wegid Yihuda, there was always another article that argues against what was written in it. The column always revolved around the history of Ethiopia. It discusses about King Yohannes IV.

When the British Empire invaded Ethiopia, it was him who received their army at Hamassien. This led to the death of King Tewodros. Tadios Tantu argued this is a betrayal and TPLF is born from such a history.

Do you consider this story as a common history of Ethiopians? Or are you blaming one ethnic group for it?

When Yohannes IV allowed the British to enter Ethiopia, he was not alone. He was assisted by King Teklegiorgis (also known as Wagshum Gobeze) who allowed the British to go through his territory to Mekedella. All of these are a part of our history. Yet I believe we did not learn from it. That is why I allowed the column to be published.

However, I have not gone through each of the words of the articles appearing on Wegid Yihuda. At that time, I was editing stories appearing on three publications with a scarce resource and professionals. We used to call it guerrilla journalism. While fighting the government, we were facing critical shortage of resources. In the midst of such challenges, there were several points that were published, though they were not supposed to be printed.

However, the aim of the article was not to disparage the image of Tigrayans. I never have been an enemy to Tigrayans and I will never be. The same goes with Oromos, even though many accuse me of being an enemy to the Oromo people. We were accountable to the contents appearing on the newspaper. We may have made some mistakes.

I cannot say mistakes were never made when we were publishing articles under the column. I apologize if we made a mistake and for the error. Yet, one thing is for sure, it was never our intention to portray the people of Tigray as our enemy.

You have been given several awards while you were in the media sector. Many also say you have paid a big price for journalism, while some claim that you are an activist rather than a journalist. For you, what are the things you have contributed for the development of journalism in Ethiopia?

Journalism can only prevail in a country where democracy exists. When you try to practice pure journalism in an undemocratic state of affairs, you face several challenges. Undemocratic elements of state target you not because you do not follow the ethics of journalism; rather it is because they don’t want to accept the truth or the reality on the ground.

It is the lack of objectivity that strains your relationship with the government. It is because a dictatorial government doesn’t accept the ethics of journalism. Under such a state, you cannot practice your journalistic profession and when you fail to do so, what you do is fight for your rights. You will also be forced to be an activist, a reality that you must accept because of the situation on the ground. The press in Ethiopia passed through such challenges. Our first aim was to practice journalism.

However, in our second edition, after we published the “fascism in Tigray” story, I was arrested and tortured at Meakelawi Prison. Since then, I was fighting for my rights. On one hand, I was practicing journalism. On the other, I was practicing activism.

We were not able to bring the experiences of the west and practice it here. That happened because we were operating in an undemocratic state, while the opposite is true in the western countries. Of course, when we build a democratic state, it will be the right time to talk about journalism.

Why did you become a politician before exercising what you called “pure journalism?”

In 2006, the TPLF suspended licensing of media outlets. When we got out of prison in 2007, we were hoping everything would go back to what it was and we will be allowed to reopen our media houses.

However, the TPLF-led government refused to give us a license. I then decided to become a human rights activist. I was arrested again in 2012 and remained behind bars until 2018. I then started publishing Ethiopis.

Soon after, the issues of special interest on Addis Ababa became a public agenda. To respond to this, I became an advocate and founded a civil society organization. However, we were not able to get a political party that pushed for the implementation of what we were advocating as a CSO. That forced us to transform the CSO into a political party and I became a full-time politician afterwards.

When you founded the party, you were saying your goal was to fight for the rights of residents of Addis Ababa and even Balderas is registered as a regional party of the capital city.

However, after your release from prison recently, you claimed that your plan from the beginning was to establish a national party. Is that not contradictory?

The problem of Addis Ababa is an outcome of nation-wide problems. Addis Ababa is not facing a challenge of its own. Its current problems are born from a dictatorial form of government. When we founded the CSO, our aim was to avert problems faced by the city and its residents.

We were hopeful that EZEMA [Ethiopian Citizens for Social Justice] will achieve what we wanted for the city, but that failed to happen. When we were opposing against special interest of Oromia in Addis Ababa, we went to the public to sell our ideas. Beyond that, we picked EZEMA to make our objectives a reality.

EZEMA’s closeness to the ruling party did not comfort us. In fact, EZEMA was the flip side of the coin when it comes to the ruling party. As we were not able to get a replacement, the public started to ask how we are going to implement what we wanted at a policy level. As a response, we established the party. However, as there were only four months left for the election, there was no time to establish a national party. That is why we were limited to Addis Ababa.

But as I said earlier, the problems faced by Addis Ababa can only be solved if national problems are solved too.

As a party that claims to fight for the rights of the residents of Addis Ababa, for you, what are the major problems faced by the city’s residents.

Residents of Addis Ababa want to see a democratic Ethiopia, a country with no risk of disintegration. They want a united country. Secondly, what they want is a universal democracy.

It is not a system of government that we create together as the current Prime Minister does. They want a universal democracy that is being practiced in the US, West Europe, India, South Africa, Japan and many other countries. That is what Ethiopians want. It is no different for Addis Ababa, who has the same vision for their country as other Ethiopians do. There are many problems born from a dictatorial government. The issue of special interest in Addis Ababa is also an outcome of such a system.

As home to several ethnic groups, there is a need for the introduction of more working languages in Addis Ababa.

After Prime Minister Abiy Ahmed (PhD) came to power, a new policy has been put in place that aims to increase the working languages of the federal government to five.

That did not follow the right procedure. It needs a legal amendment. The law works for everyone. Especially the government, it has the responsibility to uphold the law. At the national level, we all agree on the need for more working languages.

However, in Addis Ababa, there is no need to add more working languages. Amharic is enough. I never heard the people of Addis Ababa demanding for more working languages.

But there are ethnic Oromos demanding for the addition of Afan Oromo as a working language of the capital, along with the Amharic language. Have you ever conducted a survey to reach to such a conclusion that there is no demand?

I never encountered such a claim. Let alone in Addis Ababa, there was no such a demand even in cities surrounding the capital. Even in rural parts of these cities, residents speak two local languages, including Amharic.

We have not conducted a study. But we did not come across such a demand. I will apologize if I encounter anyone asking for the introduction of more working languages.

Critics say your party focuses on fueling violence. Your party is present wherever there are protests or riots. And you are rarely seen coming up with policy recommendations and solutions for problems faced by citizens. How are you going to address this criticism?

Some say we focus on issues of little importance to the public. That comes from two directions. The first is a concern coming out of kindness. The second is an attempt to silence us. And it is also an action taken to imprison us again.

There are people who believe things that we are giving an emphasis, like demolition of houses, can be solved by taking administrative measures. We have to awaken the public by publicizing and following each problem. We want to make the public aware that a problem that compromises the existence of Ethiopia as a country is happening and they must debate on it.

Supporters of ethnic federalism argue that regions should continue to have the right to secede. However, you argue that secession should not be allowed. Is that not against democracy?

Take India as an example. It is a model of democracy. But it does not allow secession. See the case of Kashmir. The Muslim majority living in the city want to secede from India and be part of Pakistan. That was why they were fighting an armed struggle for the last 80 years. There are also Indian states that want to secede but the law of the country prohibits them from doing so. The same is true in other democratic states, including South Africa and Nigeria.

In Nigeria, the attempt to secede Biafra failed, while the country’s law bans any federal state from doing so. Yet this does not make Nigeria an undemocratic state. The issue of the Catalan’s is no different. The administrators of Catalonia held a referendum and declared independence from Spain. But where are they now? They are in exile in Belgium. So does that mean Spain is not a democratic country? No!

To ensure the existence of Ethiopia and avoid of the risk of disintegration, secession must be prohibited. It is not Balderas that came up with such a rule for the first time. It is based on the experience of many countries across the world.

Agriculture is still the main driver of the economy, whether we like it or not. And we have to make sure it contributes to the GDP as its intended. I think we just have to keep our eyes on the ball.

We have collaborated with other organizations in order to increase our capital as well. Upon our establishment, our bank had one billion and fifty six million birr. Next year, we are planning to raise two billion birr by selling two million shares. We will give first opportunity to buy shares to existing share-holders and then it will be open to the public. The government has set out a rule whereby private banks have to have seven billion birr in capital in the seven years. We have six years to raise the other five billion birr.

We have collaborated with other organizations in order to increase our capital as well. Upon our establishment, our bank had one billion and fifty six million birr. Next year, we are planning to raise two billion birr by selling two million shares. We will give first opportunity to buy shares to existing share-holders and then it will be open to the public. The government has set out a rule whereby private banks have to have seven billion birr in capital in the seven years. We have six years to raise the other five billion birr.

Ethiopians have demonstrated on ample occasions that they will never tolerate anyone bent on advancing their selfish political agendas by sowing instability and thereby jeopardize Ethiopia’s very survival. All political actors need to abide by the notion that each and everything they do must be guided by the vital interests of the country. They also ought to realize that Ethiopia is much more about than the trappings of power, bankrupt ideologies belonging to the dustbins of history, manufactured historical narratives, ethnic and religious identities, and obsession with flags and emblems. It’s then that its citizens can embark on the journey to building a democratic nation that is the epitome of strong unity, durable peace, and sustained economic growth.

The panoply of challenges facing Ethiopia and its people show no sign of respite. Though active hostilities in the northern part of the country, have almost stopped after the forces of Tigray People’s Liberation Front (TPLF) were pushed back to Tigray from most of the territories they had captured in the adjoining Amhara and Afar regions, the security situation in a number of areas of the nation is fragile owing to the interminable endless cycle of violence that has been racking them for years now. Aside from the death of tens of thousands and the displacement of millions frequent outbreaks of internecine conflicts have led to, the unchecked rise in extremist attitudes, the cost of living, corruption, and land grabbing, among others, have made life an ordeal for the vast majority of Ethiopians. It’s in this backdrop that an incident, whose fallout could potentially plunge Ethiopia into a crisis of catastrophic proportions, recently took place.

On March 29 at least 26 people were killed and several more injured in clashes between armed groups hailing from the Minjar Shenkora Woreda of North Shewa Zone, Amhara regional state, and local militia in the bordering Fentalle woreda, East Shewa Zone of Oromia regional state. The blame game began soon thereafter with both sides issuing conflicting a slew of contradicting statements regarding the incident. Amhara region officials lay the blame on “anti-peace groups” whom they accused of perpetrating the attack. Their counterparts from the Oromia region though disputed the accusation, blaming the attack on “extremist forces operating in the Amhara region”. They also took these forces to task for displacing people and looting property in other woredas of Oromia bordering the Amhara region. It’s surprising that both the federal government and the ruling Prosperity Party (PP) have not made any overt attempt to defuse the tension between the Amhara and Oromia regional administrations even as both escalate the war of words among them.

The feuding between officials heading two branches of the ruling party cannot be confined to them given the party is still ethno-centric despite claiming to be a national party. In fact it has led to spats among major opposition parties active in the respective regions and social media activists, which are spewing a hateful rhetoric that could very well pit the Oromo and Amhara people, the two largest ethnic groups in Ethiopia, in a bloody conflict. The consequences of such a conflict are too horrible to contemplate. From a protracted and destructive civil war in which no side emerges victorious to a total state collapse all the scenarios facing the nation are lose-lose not only for its citizens, but also the Horn of Africa and beyond. It’s not entirely clear whether the protagonists to the ongoing verbal warfare realize that their actions are liable to lead to Ethiopia’s unraveling or are indifferent to the ensuing heavy price.

Ethiopians have demonstrated on ample occasions that they will never tolerate anyone bent on advancing their selfish political agendas by sowing instability and thereby jeopardize Ethiopia’s very survival. All political actors need to abide by the notion that each and everything they do must be guided by the vital interests of the country. They also ought to realize that Ethiopia is much more about than the trappings of power, bankrupt ideologies belonging to the dustbins of history, manufactured historical narratives, ethnic and religious identities, and obsession with flags and emblems. It’s then that its citizens can embark on the journey to building a democratic nation that is the epitome of strong unity, durable peace, and sustained economic growth.

Two pieces of legislation entailing catastrophic consequences for Ethiopia and its people are meandering through the United States Congress. The first, whose official moniker is H.R. 6600: Ethiopia Stabilization, Peace, and Democracy Act, is pending before House floor after it moved out House Foreign Relations Committee in mid-February. Entitled S. 3199: the Ethiopia Peace and Stabilization Act, the second was approved this week by the Senate Foreign Relations Committee for consideration by the full Senate. The bills require the President of the U.S. to impose sanctions on foreign persons the Administration determines to have “threatened peace and stability, undermined progress toward a ceasefire, obstructed humanitarian assistance, or violated human rights in Ethiopia.” They would also would suspend certain U.S. foreign assistance to Ethiopia and authorize the Administration to help entities investigate and seek accountability for war crimes, crimes against humanity, and genocide in that country. Furthermore, the bill would require the Administration to “develop and implement a strategy to promote peace, reconciliation, and human rights in Ethiopia and to report to the Congress on its actions under the bill and on other related matters.”

Ever since the forces of the Tigray People’s Revolutionary Democratic Front (TPLF) launched an unprovoked attack on the Northern Command of the Ethiopian National Defence Forces (ENDF), the bilateral relationship between Ethiopia and U.S. have broken down following the U.S.’ adoption a series of measures intended to arm-twist Ethiopia into choosing its side over China in the new cold war. Although the two countries have recently shown signs of improvements in their relations with the allocation of additional U.S. funds in support of different regional states and institutions in Ethiopia, the U.S. is still bent on applying more sticks than carrots to accomplish its strategic goal in Ethiopia and the wider region. The passage of these blatantly biased bills is sure to negatively impact Ethio-U.S. relations for they erode the trust, predictability and mutual cooperation on which they should be based.

What makes the contents of H.R. 6600 and S. 3199 more galling is the fact that they place no sanctions or threats of one against the TPLF despite its instigation, expansion and prolonging of the civil war as well as the commission of crimes of atrocities. In addition they fail to give due recognition to the steps the Ethiopian government has taken to bring a peaceful resolution to the civil war. Chief among these measures are the withdrawal of the ENDF from the Tigray region in June 2021 following the unilateral declaration of a ceasefire; the streamlining of aid delivery to the regions affected by the war; ordering the ENDF to not cross into Tigray after TPLF forces were routed from the positions they held in the adjoining regions they had invaded in December 2021; releasing several politicians, including TPLF leaders, from prison in January; lifting the six-month State of Emergency declared after three months; and declaring a humanitarian truce to facilitate the delivery of aid to the conflict-affected people of Tigray. Such inequity only serves to deepen Ethiopians’ distrust of the U.S. and its allies.

Punitive sanctions do more harm than good and seldom achieve their intended outcome. The US has not secured democracy, peace and stability by imposing debilitating sanctions on any country in the world. It is the poorest of the poor, low- and middle-income Ethiopians who will suffer the most by the passage of H.R. 6600 and S. 3199, not the government officials they target. The sanctions will adversely affect regions which have already been hit very hard by the war, including Tigray, Afar and Amhara given they make it very difficult to source the materials needed to reconstruct the health, educational infrastructure the war has ravaged as well as the resumption of other critical services. Moreover, by calling for an independent investigation into conflict-related human rights violations, the bills signal lack of confidence in the Ethiopian Human Rights Commission, whose report on a joint investigation undertaken with the U.N. Human Rights Commission on the war in Tigray, was endorsed and applauded. The debilitating impacts of the bills on a poor nation like Ethiopia will be devastating and apt to linger for years. This would lead to the very instability and fragility of Ethiopia that the U.S. ostensibly wants to prevent.

In a rare foray into engaging Ethiopians in candid dialogues since the advent to power of Prime Minister Abiy Ahmed (PhD) in April 2018, senior officials of the ruling Prosperity Party (PP) have fanned out across Ethiopia to hold dialogues with citizens from all walks of life. The discussions come on the heels of the premier’s pledge at the conclusion of last week’s meeting of the party’s executive committee that party officials would soon be dispatched throughout the country with a view to seek durable solutions to multi-pronged challenges in collaboration with the public. The party said the dialogue has two underlying objectives: informing the public about the decisions of the party’s first Congress held at a fortnight ago and reaching a consensus on the respective roles of the public and the government in the search for solutions. By most accounts the participants were apparently able to voice their views without any inhibition. Time will tell if the party is committed to heeding them.

The topics raised at the discussions largely coincided with the areas of focus PP’s congress vowed to tackle. Chief among these are the deteriorating security situation in large swathes of the country; the debilitating hike in the cost of living; the rise of extremism and exclusionism; and the proliferation of corruption and other forms of bad governance. The crux of the impassioned and sometimes angry views expressed by the public was that the blame for the current state of things squarely lay with the government. While some acknowledged that the plethora of problems besetting the nation and its people predate the government and thus absolve it of some degree of culpability, most did not buy into this line of reasoning saying that the government lacked both the desire and capacity to put paid to them. In fact, they argued, the rank of the government has been infiltrated by duplicitous elements intent on advancing their selfish interest or the sinister agendas of domestic and foreign enemies. The government would do well to take immediate corrective actions for the extent to which it genuinely responds to the demands of citizens will determine if and how long it may remain in office.

The gravest of the grievances voiced by everyone participating in the discussion forums is the cycle of violence that has been rocking Ethiopia for some years now. From the frequent outbreak of internecine conflicts and targeted attacks to the war in the Tigray, Amhara and Afar regions thousands of innocent citizens including children and the elderly have been butchered and injured with millions more displaced from their homes. Though the public has demanded time and again that the government protect its safety and security and bring the perpetrators of acts endangering its welfare, the latter has been found wanting when it comes to ending the recurrence of senseless carnage. The government’s predictable response to the calls for it to guarantee the fundamental rights of citizens to lead a secure life anywhere within the territory of Ethiopia has been to vow that it’s committed to upholding the rule of law. It must stop paying lip service to a matter of grave importance and back up its promise with action.

The second and equally pressing matter that arose during the course of the discussions was the backbreaking cost of living. The interminable escalation of the headline inflation rate has meant that life has become a living hell for the vast majority of Ethiopians and pushed a significant chunk of the population into poverty. There are a host of reasons driving inflation. One of them is the inability of the government to formulate and implement monetary policies instrumental to contain if not bring down the phenomenon. Its failure to allocate sufficient foreign currency to importers of basic necessities and eliminate the predatory behavior of unscrupulous market actors have further contributed to exacerbating the inflationary pressure. Although the government can do nothing to halt a significant contributing factor—the rise in the price of fuel and imported food items—it is incumbent on it to seek both short- and long-term solutions through meaningful consultations with the general public. Undertaking a course of action that does not take into consideration the views of everyone who has a stake is bound to fail miserably and worsen the problem. The serious ramifications of the spiraling inflation, namely stirring widespread public discontent that triggers political and social unrest, is something the government needs to wise up to and take appropriate steps to neutralize them.

As much as the government bears the primary obligation of easing the suffering Ethiopians are undergoing, it cannot succeed if it tries to go it alone. Aside from empowering political parties, religious organizations, educational institutions, civic and professional associations, elders, the youth and women to play an active role in the search for informed solutions, the government is duty-bound to clean its house and purge officials and functionaries in its structures who are complicit in the very problem they are supposed to fix. Important as organizing dialogue forums may be in garnering the views of the public, it’s paramount to ensure that they are inclusive. It’s only then that the government can effectively respond to the demands expressed by the public in the recent discussions.

As some U.S. lawmakers and lobbyists engage in a concerted endeavor to force Ethiopia into kowtowing to the demands of the West, it is incumbent on the government, people and friends of Ethiopia to do everything possible to foil their sinister design. While efforts are underway both at home and in the U.S. to stop H.R. 6600 and S. 3199 from seeing the light of day, they should be ramped up until the bills are defeated. It’s disheartening though to see some citizens and members of the diaspora community side with the sponsors of the bills. Ethiopians should not despair just because the bills have advanced to the House and Senate floors. In order for them to become law they will need a full vote of both chambers and the signature of President Joe Biden. There are several things that can be done in the meantime to ensure that even if the bills pass they are defanged and unrecognizable from their current form. It’s imperative that we keep up the fight to the death and resolutely defend our national interest.

The inability of the political class to resolve differences through discussions and negotiations has for far too long been a hallmark of Ethiopian politics. There is no disagreement under Ethiopian skies, however deep-seated it may be, that cannot be addressed through genuine dialogue. Politicians that truly have the interest of Ethiopia and its people at heart owe the duty to ensure that they comport themselves in a manner that advances the interests of the nation, not their selfish motives or the agendas of adversaries intent on doing the country harm. They need to work together to facilitate Ethiopia’s smooth transition to a democratic order, uphold the rule of law, and enable citizens to have access to justice. Furthermore, it’s incumbent on them to play an exemplary role in terms of, among others, rejecting discriminatory attitudes and practices, creating a mutually respectful relationship amongst themselves, and forging a culture of constructive dialogue. It’s then that the calamitous ramifications of the war of words between members of Prosperity Party can be averted.

The inability of the political class to resolve differences through discussions and negotiations has for far too long been a hallmark of Ethiopian politics. There is no disagreement under Ethiopian skies, however deep-seated it may be, that cannot be addressed through genuine dialogue. Politicians that truly have the interest of Ethiopia and its people at heart owe the duty to ensure that they comport themselves in a manner that advances the interests of the nation, not their selfish motives or the agendas of adversaries intent on doing the country harm. They need to work together to facilitate Ethiopia’s smooth transition to a democratic order, uphold the rule of law, and enable citizens to have access to justice. Furthermore, it’s incumbent on them to play an exemplary role in terms of, among others, rejecting discriminatory attitudes and practices, creating a mutually respectful relationship amongst themselves, and forging a culture of constructive dialogue. It’s then that the calamitous ramifications of the war of words between members of Prosperity Party can be averted.

Best known for playing a big role in establishing the Association of Chartered Certified Accountant Ethiopia (ACCA), Hikmet Abdella is currently the Director-General of Accounting & Audit Board of Ethiopia (AABE). She has been holding the position since 2019 after replacing Gashe Yemane, the founding DG of the Board.

Hikmet has been tasked to complete the path to full implementation of International Financial Reporting Standard (IFRS) in the next three years.

The Reporter’s Ashenafi Endale sat down with the Director General as she reflects on the path taken to make Ethiopia’s audit and accounting standard comply with internationally accepted principles and rules. Excerpts:

The Reporter: How is the progress of Accounting & Audit Board of Ethiopia (AABE) in professionalizing Ethiopia’s auditing system?

Hikmet Abdella: Financial statement is the cornerstone of any institution, whether they are business entities or NGOs. But Ethiopia had no financial statement standards for a long time and there were also no standards for professionals.

The Accounting and Auditing Board of Ethiopia (AABE) was established under such context. Before the AABE, the Auditor General (AG) used to provide licenses and undertake supreme audits for public institutions. So licensing auditors, accounts and firms was an additional job for the AG, at that time. It gave the licenses but had no capacity to control and regulate them.

A World Bank study in 2007 indicated that Ethiopia’s economy was growing faster and there is no accounting and auditing professionals that matched the growing businesses. The AABE was established based on this recommendation.

The AABE’s task is to license accountants, auditors, firms and regulate them. We also adopt and implement internationally accepted auditing standards in Ethiopia. These professionals undertake audits and submit documents to the AABE. We have a library of firms’ files.

Which companies are difficult to control? Which company structures are more complicated in Ethiopia?

Our prime priorities are Public Interest Entities (PIE) and the AABE is basically established to protect these entities from failing. If a company fails, it might not have much impact on the whole economy but if PIE fail it will have a wider economic impact.

Different countries have varying definitions for PIE.

PIE is defined qualitatively and quantitatively. For instance, financial institutions are PIE with huge numbers of shareholder’s with interests. They collect savings and give loans. So they must be protected from failing. Secondly, SOEs are protected because they are the highest taxpayers.

MFIs and share companies are our next priorities, while PLCs are our last priority. We don’t have to control vendors since they have absolutely no impact on the economy.

Every jurisdiction has its own definition. The AABE is currently developing its own definition for PIE and other business entities but we have to align with international standards.

Currently, a similar international definition for PIE is being debated and we have been participating in such debates virtually, due to the COVID-19. Probably by next year, we will have a new definition for PIEs. But there will not be much deviation from what we are using now.

The AABE’s task also relates to domestic resource mobilization. Big companies have to generate big taxes and the AABE controls big business entities strictly, than small businesses.

Ethiopia’s private sector is very new. It has only been 30 years since the communist regime changed and the only big players are financial institutions, followed by other share companies.

Generational companies, that have passed from generation to generation, have also a big role to play and we must be able to maintain family owned enterprises. They usually lie in the middle, between small and big companies.

Family owned enterprises, if well nurtured, can contribute up to 50 percent of the tax revenue. So they should be considered as PIE. But in Ethiopia, family owned enterprises are dying out currently, due to various reasons.

Scholars argue that the tax base should be diversified in Ethiopia. Is it big companies or small businesses that pay more taxes currently?

It is a matter of context. Large taxpayers have to get incentives in different mechanisms, so they can grow more robustly. A country cannot grow without diversifying its tax base at a small business level.

The number of taxpayers in Ethiopia must grow. Many small companies, pooled together, bring huge sums of tax revenues. But the tax authorities must be careful not to squeeze small businesses through stringent taxes. Small businesses must be relieved from stringent of taxes, so they can grow.

What is the AABE’s capacity in controlling and regulating Foreign Direct Investments since Ethiopia’s economy is integrating into the global economy?

The Prime Minister recently stated that the financial sector will open up. And the ongoing liberalization and privatization, as well as the World Trade Organization accession, need ultimate caution. It is good that big foreign players are coming to Ethiopia. But all regulatory institutions in Ethiopia, including the AABE, must sit down, and discuss whether we can handle it or not.

Ethiopia’s economy and regulatory institutions have been closed for a long time. Even neighboring countries have more capacity when it comes to regulatory capacity. There are also differences but we cannot remain closed. We must look for methods to bridge the regulatory limitations.

The east African block including Rwanda, Uganda, Kenya, have a system in which accounting and auditing professionals can move freely from one country to the other.

When Ethiopia opens up, they will bring their own systems and professionals. Ethiopia must produce its own professionals to control foreign firms. Currently, Ethiopia has no sufficient accounting and auditing professionals to support the economy.

We are currently preparing to establish the Ethiopian Institute of Certified Public Accountancy (EICPA). Hopefully, it will be operational this year and start to produce professionals. If you go to Kenya, there are close to 40,000 professional accountants but Ethiopia has around 250 professionals. We cannot support or handle the opening-up of the economy with such meager figures.

The Capital Market is nearing realization in Ethiopia, which requires precise and highly trained professionals. PIE will be affected if we launch a stock market without skilled professionals. In some countries, only firms listed on stock markets are considered PIE.

As soon as the stock market is opened, banks will be the first to be listed. These institutions must be valuated every three months, instead of annually as before.

Unless we have professionals to value the Initial Public Offerings, public interest will always be affected. Even statements made by politicians can affect the value of an IPO; so the listed firm must be valuated frequently. This is impossible without qualified accounting and auditing professionals.

Officials at the National Bank of Ethiopia are saying it will take three years to create a fully-fledged stock market ecosystem. Can we reach that with the absence of professionals?

Big things can be done in three years. With the EICPA established now, and is backed with a sufficient budget, we can generate 5,000 professionals annually.

There are already many graduates but there is much to be done to create the right stock market ecosystem. Public interest must not be affected, until we try to fill the gap in lack of professionals.

There are many distortions in the commodity value chain and malpractices in the corporate world in Ethiopia. Even recently, importers and wholesalers have been blamed for hoarding edible oil, which has caused a crisis. Do you think the AABE has created a good corporate culture in Ethiopia?

We did not achieve much progress. There is no responsibility. Do you think money laundering is done without the knowledge of accountants? Is the accountant responsible to the public, government, or the company owner?

Ethics is the biggest problem. Accountants can build or destroy a country. The demand for accountants is always up, even at war times. Accountants can change small money into big, or vice versa.

Currently, Ethiopia is negotiating to start the Africa Continental Free Trade Area (AfCFTA) and also the WTO. It should be accountants that represent Ethiopia on the negotiation table. Accountants know what the agreement articles mean. They can tell you what it means ten years from now.

Does the AABE work with the auditor general? Do you have the capacity to take action on accounting misbehaviors?

The Auditor General audits institutions and we produce the professionals. We do not audit public institutions. We do SOEs, private companies and NGOs and the Ministry of Finance reviews the financial statements. Currently, we are reviewing SOEs parastatal financial statements. We will discuss with the PEHA, the MoF and the AG next week.

Ethiopia embarked on the road to privatization and liberalization three years ago to shift the economy from state-led to the private sector. But currently, regional states are building their own conglomerates, while the federal government also establishes the Ethiopian Investment Holding. Do you think this can create productive and efficient firms in the economy?

That is a difficult question. What is for sure is less is done concerning financial statements. Many SOEs, endowments and other firms vanished, or merged, without any consultations with the AABE.

There is a huge problem on this issue. There is no procedure at all in cases of shutting down SOEs, mergers or creating a holding company. Assets, liabilities and other complexities go without proper accounting, especially in mergers. Firms usually close or merge in the middle of the year, before the fiscal year ends and a financial statement is compiled. This is a big problem.

Usually, the Cabinet of Ministers decides on the formation, closure or merger of SOEs.

I have no knowledge on why the government is making changes when it comes to its role in the economy. But strengthening parastatals is common in many countries. We are also seeing progress to accede to the WTO.

Is there capacity to regulate foreign firms like MPESA and are foreign banks allowed? Do you think banks can survive foreign competition?

Ethiopia’s financial institutions are better than where they were ten years ago. If a single foreign bank had come ten years ago, local banks would have never survived, even if they merged into one.

But now, local banks are stronger. The problem is, local banks cannot grow more than they have now. They cannot diversify their products anymore and are very similar. If foreign banks or MPESA come, more products can come with them and support the economy.

But the banking sector will not be opened at once and will be gradual and managed. Unless the regulatory capacity grows parallel and equally, Ethiopia will be in danger.

What do you think is the competitive edge of local banks?

There is not much but their organic growth is very appealing. But the quest for access to finance in Ethiopia is beyond the capacity of existing banks. The economy grew very fast but the access to finance did not.

Even now, we are facing a liquidity problem, which has affected the construction industry due to the lack of credit. The construction industry massively contributes to the economy. But it depends on finances.

The return on shares also remains very positive. But some banks are reaching their ceilings. Many people bought shares because there were no other alternative investment areas at the time. And once the stock market is opened, there will be more opportunities, even for the layman.

Did the new Commercial Code, which was amended after 62 years, bring changes to company structures and accounting systems?

Allowing the creation of a holding company, one person PLC and other minor changes have occurred. The code also allowed foreign accounting firms to come to Ethiopia. The big four, which include KPMG and PWDC, are allowed to operate in Ethiopia.

But these international financial institutions can only partner with local companies. They are allowed to have a 49 percent stake. They are currently requesting us for a license. This is one of the signs that the economy is opening.

The big four will have a big role in capacity building but are very unhappy with the 49/51 proportion. But for me, it is perfect.

So auditing is allowed for foreigners now?

Yes, but this was only made possible after the commercial code was amended.

Recently Ethio telecom’s CEO, Frehiwot Tamiru rejected the 80 billion birr asset valuation of the company. Some say the low valuation is intentional, and conspiracy concerning the valuator has been raised.

I am very concerned of the valuation issue in Ethiopia. Valuation is one input for accounting. In the old days, the value of vehicles dropped every year and on the tenth year, the value gets to zero. The Tax Law also states it must depreciate by ten percent annually. The IFRS states an assets value must be stated in its current market value, which shows the true value of a company.

In Ethiopia, the value of vehicles keeps appreciating. A Toyota bought with 200,000 birr ten years ago is now 2,000,000 million birr. So according to IFRS, the vehicle is worth 2,000,000 birr. But the tax system does not demand depreciation.

Who is the right valuator in Ethiopia? There are only three certified valuators in Ethiopia.

The conspiracy issue when it comes to foreign valuators is not a new issue. That is why I say the opening up of the country must be cautious. Ethiopia has been closed for so long that the process must be done step by step. The reasons why the big four hate the 49/51 ratio is because they want to come at once and manipulate the weak regulatory system.

Whatever your background, you care about your country. But foreign firms care only about their profit. The loyalty of their accountants and auditors is not to the Ethiopian public or the government. It is for their parent company abroad. This is why we must produce our own professionals, to maintain the balance.

Which institutions have shown progress in implementing IFRS?

That would be financial institutions. They have the money and IFRS is expensive. If a company can afford the expensive professionals, it is simple to implement IFRS. There is a huge demand for the professionals, but there are very few. The demand shot-up since the AABE came.

Financial institutions are implementing IFRS because they have the money and managed to engage international financial consultants, but SOEs are the first to bring an IFRS report four years ago.

Banks are blamed for engaging in informal financing including the black market, and informal Hawala services. Do you think IFRS brought transparency to the banking system?

Every time an economic system is closed, informal doors are opened, including corruption. Many problems will be solved, if the economy is opened but as long as it remains closed, it creates many loopholes.

New banks have come into the picture in the past three years. But lately, the PM has said the sector will open up soon. When should it be opened?

When foreign competition comes, it will be all about survival of the fittest. How long will it take for our banks to be fit? If they have to merge to be competitive, let it be. Mergers should be encouraged. It is better to have a few strong, internationally competitive banks than many banks.

So far, Ethiopian banks are not even going into regional states, because they did not even satisfy the urban clients while Kenyan and Nigerian banks are working at continental levels. That should be our direction.

What would be your expectations of the upcoming stock market?

It will engage the ordinary people. Only few have been able to buy bank shares. But in a capital market, people can have a stake in the stock market. Anybody can invest in profitable businesses, in a stock market.

Will the EICPA produce professionals for the stock market?

Yes. The institute will generate mainly certified public accountants, to address the diversified demand of professionals from different institutions.

Various institutions want to install their own institute to produce such professionals. But that would be unaffordable. So it should be the EICPA that branches-out and addresses these diversified interests.

Who will be listed on the IPO first?

Financial institutions, then SOEs, share companies, and family owned enterprises. The last one may need discussions on whether they want to go public.

Cross listing is also possible. For instance, companies like Coca Cola, which are listed in other countries and also operating in Ethiopia, can be listed in Ethiopia.

Why is it still difficult to solve under-invoicing and over-invoicing challenges in Ethiopia’s import-export business?

Our concern is how to address it through a transparent accounting system. But there are varying scholarly debates on this issue.

Lately, the Ethiopian Investment Holding company has been formed to be an umbrella company for SOEs. Do you think such a mammoth holding company, run by a government, can be efficient given that SOEs are known for wasting resource?

I believe such trend of creating holding companies is a good start. If there is a strong accounting and valuations system, SOEs and holding companies can be efficient.

Liability and asset management company (LAMC) was also recently formed to soak up SOEs’ debts. Credit default swaps, or trading credit derivatives, is common in other countries. In Ethiopia too, some banks are buying defaulted debts from prospective enterprises. Do you think the trend is recognized by the AABE in Ethiopia?

This area should be researched. Many new trends are emerging in Ethiopia’s economy and its contribution must be analyzed.

Before the Ukraine war and COVID-19, scholars were saying globalization is invincible. Now, self-sufficiency is becoming irreplaceable. We have been dependent on FDIs, but they abandon industrial parks when they want. Yet, Ethiopia is pushing for privatization and more integration in the international economic system.

Don’t you think it is time to focus on economic sovereignty, including import substitution? I am not talking about closing the economy, but where should be the boundary?

No country is economically self-sufficient, including the US. Their economy was stuck when Chinese supply declined during COVID-19. Many companies closed in the US, because the supply chain was disrupted. Ethiopia cannot think of self-sufficiency with a nascent manufacturing industry.

But I believe it is time to re-prioritize our policies. Especially, our negotiation skills on international economic activities must grow. The level of our negotiation skill determines the level of external debt stress on our economy.

Many countries have long term plans, up to a century. We must be clear and have a realistic plan on where we want to go in the long term, regarding self-sufficiency, import substitution, even on Chinese imports. For instance, we export oilseed and import edible oil at expensive prices. This can be replaced locally.

Many investments were damaged due to the conflict in northern Ethiopia and COVID-19 pandemic before that. Can they be compensated rightly?

Knowing their accurate accounting is critical, to determine their losses and compensations. We also need to produce professionals on investment insurance policies.

How man licensed auditing firms are there?

Basically, the AABE gives two kinds of licenses. Authorized accountants prepare financial statements. There are around 2,000 authorized accountants, at federal and regional levels and there are 162 independent auditors.

What are its challenges?

There are many challenges. The AABE is a regulatory body. We are expected to have much more capacity than those we control. One of the challenges relates to professionals earning more money if they operate privately, than work for the AABE.

Professionals in regulatory institutions, have less incentive. If the professionals have more power than the regulator, it is difficult to regulate. For the time being, the board is using consultants who are paid by the World Bank, with approval from the Ministry of Finance.

ACCA supported us too. Currently, the AABE is in good position. We know how to review audit reports, and control licensed professionals. Some companies take up to four years to finalize financial statements, but we always begin to review from the first year.

The world is celebrating March 8th. Do you think the affirmative actions provided in Ethiopia have really empowered women?

I do not know what incentives are provided. March 8th is good to highlight the challenges women face. But nobody cares about the details on normal days. Those women like us, who have succeeded, should share our experiences and become role models to young people. We have much homework ahead.

The statistics of women in higher corporate and leadership positions, is alarming. I think there is only one bank president currently and this is not because women lack capacity. If you look at the boards of banks, women constitute less than 10 percent. It is the same in SOEs.

Our definition of democracy is distorted. Ethiopians think ideological semblance comes from similar people. That is wrong. Successful women must nurture the young.

Some European banks which survived the 2008 financial crisis, were banks led by women. Do you think making women CEOs is a guaranteed success?

Women have different management philosophy than men. Women lead with humility. It is not because we have more capacity but because we have intense concern for humanity.

Usually women empowerment issues are used or raised during March 8th or elections. When will equal opportunity become embedded in the publics thought?

We live in a man’s world. The existing trend must change completely, to accommodate women. A new world and country that equally accommodates women and men must be created.

Radical feminists argue a new social order should be created from scratch.

That would be good, if it is possible.

But other groups argue the existing world can accommodate women, with some adjustments.

I agree with this one. But I do not think we should try everything foreigners tell us, especially on feminism. Context and culture are very important. Ethiopia has a different context from the west. We can create an indigenous system for Ethiopia.

First, we have to reconfigure what the education system, society and the media tells about equality. The narrations and practice must be seamless, while extremist views on gender issues only harms the efforts.

If completely erasing the existing system and creating a new order is possible, it should have been simple to reshape the country.

For instance, there are some jobs where women earn less for the same position. Can it be solved by policy actions?

There are various challenges posed on women, some to be solved by the government, some by the private sector, or the society. For instance, board compositions can be solved only by policy. Chambers can also do more work to bridge the inequality gap. And some challenges are inherently solved through time.

There is this discussion over equal opportunity versus equal outcome. There is opportunity for all. Both boys and girls go to school. But that equal opportunity does not continue. Women give birth and then must take care of children.

The inequality will change as more women come into leadership roles. No challenge can be solved overnight, through policies or campaigns. For instance, the AABE can play a role in board compositions because corporate governance is one of its tasks.

Sewagegn Chane is director of the Public Financial Institutions supervisory department at the Public Enterprise Holding and Administration (PEHA), which regulates state-owned enterprises. Sewagegn is currently responsible for directly supervising the Development Bank of Ethiopia (DBE) and the Liability and Asset Management Corporation (LAMC). The Commercial Bank of Ethiopia (CBE), Ethiopian Insurance Corporation (EIC), and the National Lottery were also under his supervision, until they are transferred to Ethiopian Investment Holding (EIH) past May.

Working in public financial institutions for 30 years, Sewagegn initiated the establishment of the stock market in Ethiopia, which is bearing fruit eleven years after the first feasibility study. He was also vocal and key in rescuing the DBE, initiating Ethiopia’s first reinsurance company, Takaful (Islamic insurance), among others.

Sewagegn is also researcher at i-Capital Institute and organizer of the East African Finance Summit. Currently, he is leading two teams formed at the institute, studying the establishment of an investment and agricultural development banks in Ethiopia. Although he has been advocating ending state protection over the financial sector for years, he has currently changed his mind, just as Prime Minister Abiy Ahmed (PhD) authorized a policy that envisages opening up Ethiopia’s financial sector to foreign competition. Sewagegn believes the banking sector should remain closed at least for the next few years. The Reporter’s Ashenafi Endale sat down with the public finance guru. The excerpts, does not necessarily reflect PEHA’s position.

The Reporter: What is the progress in reforming public financial institutions, which commenced after Abiy came to power?

Sewagegn Chane: The biggest reform we undertook is in the DBE. In 2018/19, the House of Peoples’ Representatives (HPR) decided DBE cannot continue as a financial institution and debated on how to dismantle it. That year, the bank reported 765 million birr loss so the HPR decided that the bank is not supporting itself, let alone the economy.

Myself, Haileyesus Bekele, the president at the time, and Yohannes Ayalew (PhD) DBE board president at the time, were called by the HPR to explain the issue. At that time, Public Finance Institutions Agency was a separate entity outside PEHA. The agency was led by Sintayehu Hailemichael (PhD) and I was the deputy director for operations. When some 36 SOEs were put under PEHA in 2018/19, the agency was included under PEHA, as a directorate.

The Budget and Finance Standing Committee at the Parliament insisted the DBE must be dismantled, because it was reporting a loss consecutively. The three of us were called to give our final comments on the committee’s decision. The committee was told that the fundamental problem of the bank was the lack of institutional independence.

Everybody was intervening in the bank, and it was unable to operate as a bank. The PM, other ministers, sectorial institutions, and even individuals have been meddling in DBE’s operation. Secondly, the bank gives loans but does not collect. Those who took DBE loans view it as the government’s budget, not as a client. Most of them had the “developmental investors” plate.

They take a loan and divert it to other businesses. Commercial farming in Gambella and Benishangul are good examples. I was in Gambllea for a year and half, to study why DBE’s loans failed there. There are so many rain-fed projects there. Particularly, six of those that took loans completely diverted the money to other businesses, instead of the commercial farming.

I stood before the standing committee, and pledged to give the DBE additional time. I told them if institutional freedom is restored, relationships with clients will be straightforward, and the bank’s loan collection capacity rebuilt, bringing DBE on track. So I asked the standing committee to give us just one year, and if we fail to rescue the bank in that year, then the committee can dismantle it.

Yohannes on his behalf explained how the IMF and the World Bank are happy to see the DBE dismantled because they do not want development banks in developing economies. He also elaborated how important a development bank is for Ethiopia. After a brief tea brake discussions, the standing committee announced it granted the one year time.

Immediately, we embarked on the reform agenda, introducing seven reform pillars. One of the biggest reform pillars was reducing DBE’s Non Performing Loans, which was over 40 percent at the time. If the bank cannot collect the loans, it cannot disburse loans the next time.

DBE’s NPL at the time was weighed in rain-fed agriculture and textile. So, we stopped any further loans for rain-fed agriculture. In textile, many foreign investors took loans in billions but did not pay, so we decided to take over all the projects that are not paying back their loans, and transferred them to other investors.

We also took the contract management of non-performing projects. For instance, the DBE took over the management of Elsi Addis, Etur and other textile factories, for the time being. Except Etur, most of these projects have been transferred to new investors, without reaching the foreclosure stage.

The major project left on our hands to date is Ayka Addis.

The other serious measurements we took were barring any officials from intervening in any loan appraisals and disbursement processes. Before the reform, orders for some loan approvals were given from the Office of the PM. Officials from the Industry, trade, agriculture, and many other ministries used to give such informal orders to the bank. Now, even the DBE board cannot involve in loan disbursement cases, except on strategic issues.

We managed to reduce DBE’s NPL to 30 percent this year, including Tigray loans. It is actually 17 percent, if loans in Tigray are excluded, which are affected by the war in northern Ethiopia. Profit comes from loan interest. If the loan is not collected, there can be no profit.

We managed to generate 1.2 million in 2019/20; just a year after the reform was launched. This year, the bank generated 3.9 billion birr in profit. If we did not put aside 4.1 billion birr provision for the Tigray loans, DBE’s profit this year could have been 7.8 billion birr. The DBE is rescued now and everybody is acting as a client now.

DBE’s source of finance is the guarantees from the Ministry of Finance and the National Bank of Ethiopia (NBE). The capital has increased from five million to one billion. The macroeconomic committee approved a study to allow new DBE bond, effective since January. This is apart from the GERD bond, which is the DBEs source of finance.

Before the reform, all the financial indicators of the bank were negative, and unhealthy. We completely reversed all of that, except for the NPL. Before the reform, there were only expenses and disbursement, but now there is income.

Out of the 31 strategic measurements we stipulated under the seven reform pillars, 21 are aggressively implemented and ten are in the process. Only one measurement has not started, which is the digital technology and modernization initiative.

The PEHA and DBE’s board has contributed for the success of DBEs management. One of the positive factors is the steel-serious discipline of Tegegnework Getu (PhD), the board chair of DBE. As a board chair, he is opaque to any external influence or favor. He never took stipends and incentives allocated for board chairs annually. Even he uses his own car for DBE activities.

Yohannes was the chief economist at the NBE for a long time. How did you believe in him, that he could rescue the bank?

Under past presidents, the bank had many deviations and exceptions. Instead of going through loan approval and disbursement procedures, loan seekers directly contact the president and get the loans, informally.

For instance, after we banned DBE loans for rain-fed agriculture in 2018/19, the bank gave 120 million for rain-fed agriculture project. The president at the time said he was forced because certain officials at the Ministry of Agriculture managed to give the order via the Office of the PM.

Surprisingly, the board chair does not know about the loan. The bank was bleeding. We had to be brutal to stop the bleeding. Most of the bad loans were given during Isayas Bahre’s time. Both Haileyesus and Getahun Nana were unable to save the bank. Our biggest worry was that Yohannes might decline the role to lead the DBE.

Over 200 large scale agricultural projects, and a number of foreign textile investors took loans from the bank and failed to pay. Are you pursuing them legally?

We are trying to acquire the lands currently. Our biggest problem now is with the regional governments of Benishangul and Gambella. The land is the key asset the investors provide as collateral to take the loan from the bank.

After the investors fled without paying the loans they took, the DBE has to acquire the lands, since it is the collateral. Once we finalize acquiring the lands, we will transfer it to other investors. Then we will recover the previous loans.

I heard the Benishangul and Gambella regional governments are demanding it pays taxes on the lands?

We reached agreements on some of the lands in Benishangul. There are ongoing debates on the amount. The bank agreed to pay the tax, if it agreed on the amount. The regional governments usually give one plot for multiple investors, so one certificate is given to multiple investors. The regional agriculture bureau has been reporting to us that the lands were being cultivated by the investors, which was false.

In general, rain-fed agriculture and textile investments have bled DBE.

For instance, Ayka Addis’s investor used informal channels to get the loans, instead of going directly through the bank. It either goes through the PMO or other officials. Solving all this was not simple.

Most of DBE’s clients were unruly. They had the right to take the loan, and the right not to pay. So we disciplined the clients first, and reversed the bank’s practice of negligence. All this was done in three years.

How much is the land leased for the rain-fed projects?

The rate depends on the regions. Basically, tax, lease and anything related to the land is handled by the investors. But since the investors went bankrupt, and the DBE took the lands, now the bank has to pay them. This is the reason why the regional states are asking DBE for the taxes, because it is under the bank now.

The investors who took the land in regional states for commercial farming, left, and the tax holiday period is over. So regional states are now claiming the taxes and the DBE agreed to pay. This is the game.

Did the Gambella commercial farms failed by design?

The loan was supported by policy. The policy of initiating commercial farming and modernizing the agriculture was not wrong. So the DBE prepared policy and procedures.

The major factor for the failure at that point, was the decision to give loans for rain-fed agriculture. This was a mistake because the investors knew the loopholes and abused the loans and failed to return it.

The DBE is on the right track now but business continuity is more critical.

What are DBE’s sources of funds, after the NBE’s 27 percent T-bill is replenished?

The NBE introduced another bond this year, in which banks channel one percent of their loan portfolio to the DBE. In the past six months, a bit more than 10 billion birr has been channeled to the bank from this new scheme. Once we start from insurances, these two schemes will become our biggest source of funds.

The GERD bond and loans from international banks also generate finance. It also accesses external funds like SME loans, through the MoF. DBE’s T-bill is almost zero currently.

How much is the loan interest the DBE is paying currently, when will the rest mature?

The DBE pays interests by adding two percent on the saving interest, which means nine percent. On the other hand, DBE’s interest rate is between 11 percent and 12 percent, the least being for import substituting projects. The margin covers its administrative cost. So the bank is able to pay all its interests duly.

DBE requested to put Tigray NPL’s off its balance sheet. But NBE officials told The Reporter that it is not going to take it off its balance sheet.

If Tigray’s NPL is put-off DBE’s balance sheet, DBE’s NPL could be 12.5 percent. But including the Tigray NPL, which is 10 billion birr, the NPL stands at 30.4 percent. What we are saying is this 10 billion birr in NPL happened by factors out of DBE’s control. We are not asking the NBE to cancel the Tigray loan.

We undertook a detailed study on how the NPLs could be taken off the balance sheet, and presented to the NBE. We do not know why NBE is silent on the issue. The CBE also requested the NBE to take off two billion birr off CBE’s balance sheet. This was also studied and presented to the NBE.

The NBE first said the request should be processed by the Bankers Association but the issue is still in the process. It is illogical to keep inactive numbers on banks’ balance sheet. When unrest occurred in Oromia over the past few years, the NBE allowed loans of affected investors in the region to stay off banks’ balance sheet. The same can be done for Tigray. It is not a big deal. It is NBE’s decision but I do not know why it is reluctant when it comes to Tigray NPLs. Tigray NPL does not represent DBE’s actual performance, which is outstanding.

DBE’s outstanding loan is 63.4 billion birr. Total NPLs stood at 19 billion, of which 10.1 billion birr is created in Tigray since the war. The president of DBE requested to exclude the Tigray NPL but PEHA does not agree, unless the NBE approves it.

Another investor is negotiating to buy Ayka Addis. Will this be the last negotiation?

A number of potential buyers have been trying to buy Ayka Addis in the past but failed. Especially a Chinese investor was very eager to acquire Ayka Addis. Any potential buyer is expected to contribute 50 percent of Ayka Addis’s portfolio. For instance, the initial investment loan was USD 1.7 billion so the buyer is expected to contribute half of it. But the Chinese lacked capital so it requested to contribute only 10 percent of it, which means around USD 200 million, so we refused because we cannot breach the 50 percent law.

If Ayka Addis is sold, DBE’s NPL will drop to around 15 percent, from the current 30.4 percent. Ayka Addis is holding a huge loan. The principal loan is 1.7 billion, a decade ago. Including the interest, probably it is around USD three billion by now. The value of the machines, factory building, raw materials when the DBE received Ayka Addis, is valued at USD 1.79 billion.

By the way, we are still paying the salary of 4,500 employees of Ayka Addis, though it has not operated for years now. It is between 13 million birr and 14 million birr every month. We cannot abandon the employees, after the Turkish investor left. We are carrying all this cost.

There were also other alternatives for Ayka Addis, other than selling it.

There were three major options tabled. The first is selling to a capable investor or buyer. The second is operating Ayka Addis under a management contract, just like Elsi Addis and the third was repurposing Ayka Addis into an Industrial Park. Some three potential investors have been negotiating. The Chinese came last.

Currently, another negotiation is underway. We hope this will be the last one. It is a consortium of local and foreign investors. We will disclose it when it materializes. Ayka Addis’s operation ranges from cultivating cotton to sewing the clothes. It pins the cotton, dyes it, and makes the clothes. It is an end-to-end project. So the potential buyer is expected to specialize in all these value chains.

Will the new buyer pay Ayka Addis’s accumulated tax?

Under Ethiopia’s law, a company does not pay taxes if it declares bankruptcy. After the DBE took over Ayka Addis, the tax authorities are saying Ayka Addis must pay tax, since it did not undergo liquidation. Ayka Addis was not operating for the past eleven years. So, the tax authority is asking for back-taxes for all these years, stating the project did not declare liquidation. So we are arguing with the tax authority.

But the DBE declared foreclosure?

When the Turkish investors left and the DBE started managing Ayka Addis, the tax authority started asking for tax.

Amazingly, Bmet cables, one of the Turkish investments abandoned after taking huge loan from the bank is a good example of how much Turkish investor’s exploited us. Under the Turkish investor, Bmet cables utilized 40 percent of operational capacity but they were not paying their loan.

Now, the local buyer, Tadesse Admasu of Red Star Trading, is operating at 12 percent of its capacity due to different reasons. The buyer acquired Bmet paying 890 million birr. Now, it has paid all the loans owed to Bmet.

How much has Ethiopia lost because Turkish investors left the country without paying DBE loans?

Before, their equity contribution was 30 percent. This means the DBE contributes 70 percent of the investment. Under the previous ratio, a Foreign Direct Investment comes with USD 30 million, and takes 70 million. The foreign investors left without paying the 70 percent loan they took from the DBE. But now, we adjusted the equity contribution to fifty percent, for foreign investors. Local investors pay 20 percent.

FDI is needed to bring technology, capital, forex, and create jobs. It did not meet any of these targets.

One of the other loopholes FDIs has been exploiting is that they highly under invoice export price. They usually have subsidiaries or a mother company operating abroad. So they export the clothes to them, with fake price documents. These investors also import raw materials only from those mother companies or subsidiaries abroad. The FDIs operating in Ethiopia do not want to use local inputs. They export t-shirts with USD 60 cents from Ethiopia. But the buyer abroad, which is affiliated to the FDI, resells it at a much higher price. So the FDIs generate meager forex for Ethiopia. Their bank statements also indicate loss, always. Especially the expats brought by FDI are highly abusive. Bmet’s former CEO has been paid 500,000 birr in salary monthly. This is excluding housing, vehicle and other accommodations. Now we decided to reduce expats inflow.

That is why, just when we started being strict on Ayka Addis that the Turkish investor’s fled Ethiopia immediately, without handing over the project’s properly. I think they left for Burkina Faso.

Are there new public financial institutions planned to be established, particularly to finance long term development projects?

Four years ago when the bank was in deep trouble, we conducted a study to determine its fate. One of our alternative recommendations in the study was to breakdown DBE into three different policy banks; into an industry bank, agricultural bank and an SME bank. Finally, a decision to reorganize and reform DBE as it is was made. In the meantime, we conducted a study to renovate the bank; the ATA was also making moves to initiate the establishment of an agricultural bank.

The initiative to establish a stock market was also conducted by us. We have been trying to convince the government to establish a stock market for the past eight years. It is only realized under Abiy.

Now, the importance of an independent agricultural bank and investment banks is imperative for Ethiopia. In line with the agricultural bank, agricultural insurance and micro-insurance firms are necessitated equally. These firms protect the loans provided by the agricultural bank to farmers.

We conducted the “Proposal of restructuring public banks” in 2014. The proposal included the recommendation to determine the fate of the former Construction and Business bank (CBB). We did not just demolish CBB without a proper study.

The same studies have later been modified for the DBE. The modified study also recommended the vitality of Agricultural Development Bank, and mortgage bank (construction bank). The plan is for the CBE to stop mortgage financing, and transfer the role to the new Construction Bank (CB). In fact, the proposed CB partly takes on the role of the now defunct CBB.

Currently, we have established two working groups at i-Capital Institute, studying on investment bank and the agricultural development bank each. PEHA has the mandate to give birth to new public enterprises, apart from managing the existing ones. It can also decide on mergers, and dismantling of SOEs.

As long as Ethiopia is progressing from an agrarian economy to manufacturing, a stock market is very essential. If we need more robust manufacturing companies, we must build a robust stock market, where the companies are listed, float shares, and mobilize capital. A manufacturing industry cannot grow without a stock market.

The banking sector fears to give loans to manufacturing industries because the banks fear losing their saving capital. Once the stock market is active, the interest in banks will drop. But the stock market will grow faster, hand in hand with manufacturing.

I hope the establishment of an agricultural bank is realized soon. Ethiopia has an agrarian economy. But the economy is currently distorted, as the service sector constitutes the largest portion of the GDP. In a bid to transform Ethiopia’s economy from an agricultural to a manufacturing industry, agricultural development bank cannot be an alternative. Agriculture is not developing due to lack of finance, fundamentally.

The agricultural bank also needs an insurance firm, to cover the risks of the loans. The bank finances tractors for the farmer, and then the insurance firm insures the machines as well as the harvest. It is highly imperative that agricultural development bank and investment banks are essential for this country.

A secondary market cannot operate without an investment bank. Since we are nearing the establishment of a stock market, we also need to establish an investment bank.

For instance, banks are planned to be listed on the stock market. The investment banks will study the banks, as well as other IPOs, inside out. So, the investment banks determine the exact value of shares, and securities. This means IPOs, including commercial banks, cannot determine the price of their shares by themselves, unlike now.

The underwriter preserves the interest of every stakeholder, investor, IPOs, and others. It sets standard but the investment bank cannot be listed on the stock market itself.

Once the two working groups wrap up their studies, the documents will be reviewed by stakeholders. Then, we will present the final documents to the government to decide on whether to drop or implement the study’s recommendations.

A few years back, we travelled to Nigeria to visit their central bank and development bank and took three months of training. I was amazed by their Islamic insurance. We extracted lessons and brought it to Ethiopia.

The government is saying the banking industry will be opened for foreign competition very soon. What is your take on this?

Before, we have been asking the government to open the banking industry. But recently, we have changed our perspective. We prefer the government to delay the opening up for now. I precisely know the exact capacity of each local banking institution.

Before, our assumption was that local banks will merge, at the face of an open up. So we have been advocating for it to open, at each meeting and financial summits.

Basically, banking and insurance businesses in Ethiopia is a captive business. The banks are formed either under religious, ethnic, political sentiments or other bands. So, Ethiopian banks and insurance companies lack the business mentality. If they had a business mentality, they will work with anyone who has a viable business idea. So I believe the government must delay the sectors opening up.

The NBE recently said mandatory merger and acquisitions will be forced on local banks, when the sector is opened up.

That is inevitable once the industry is opened up. Of course mergers can happen even before the opening up. For instance, the NBE raised the paid up capital to five billion. Those who failed to meet will have no option but merge. The NBE can also raise the reserve let’s say to 25 percent, from the 10 percent currently. Many banks could have merged. This way, competitive banks could be created.

Western banks, especially Europeans, strongly pushed Malaysia, Korea, South Korea, and Thailand to open up their financial sector. Once these Asian countries opened their financial industries, the western banks withdrew after joining the sector. The Asian economies were hit by financial crisis as a result.

But eventually the Asian tigers avenged the western banks. The 2007 financial crisis hit western banks, because the Asian tigers suddenly raised their banking capital. They intentionally gave more loans to American banks. Then the American and European banks disbursed those loans to mortgage, and small businesses. The western banks failed to pay their loans to the Asian tigers, taking revenge twenty years after the western banks played foul.

We do not need such turf wars.

The only reason Ethiopia’s economy is doing well after the war in the past two years, is because our financial industry is closed off. Our economy survived because the banking sector is not open.

If banking was opened to foreign competition, the economy could collapse, under this war. And had it been opened before the war, the economy would have collapsed by now. Foreign banks simply close and leave, when there is a war.

Many people say the banking industry should be opened. That is wrong. They do not know the exact capacity of local banks in surviving foreign competition. I have no confidence even in the CBE.

The CBE has a huge NPL owed by the government. The government owes over half a trillion birr. Unless it is fully paid, CBE will face many challenges.

So, I insist the banking industry should not be opened at least in the next three to four years. Local banks need up to four years to prepare. Mandatory merger is simple.

When the Home Grown Economic Reform was launched in 2019, the government promised to reduce the states hand in the economy, and reduce the pressure on CBE and domestic credit. Is there any progress?

The CBE is not giving loans to the government now. State pressure is reduced. The CBE has studied new organizational structure, and is implementing new business strategies. Before, especially during the previous regime, state banks give loans as if it is a budget. They do not collect the loan.

Do you follow up on CBE’s branches abroad?

We evaluate them during reporting. The bank has branches in Juba and Djibouti. The Juba branch is performing very well but the Khartoum branch was suspended while in the pipeline.

Did the CBE move from PEHA’s supervision, after it is placed under the EIH?

Currently, the CBE is in transition process, from PEHA to the EIH.

I heard SOEs will be categorized under three supervisory institutions according to their performance. These are the EIH, PEHA, and the LAMC. Is that true?

What I know is that there are SOEs going to the EIH, and the rest will remain under PEHA. The LAMC by itself is an SOE and is under PEHA’s supervisory. LAMC is under my supervision. The CBE, DBE, EIH, LAMC and national lottery, are under my directorate.

The EIH has recently on-boarded 27 SOEs, out of the 36 SOEs under PEHA. Does that mean they are completely out of PEHA?

The investment part of SOEs goes to the EIH, while the enterprise management aspect remains under PEHA. But so far, there is no definite decision on whether the selected SOEs completely move to the EIH, or partially. This is decided by the macroeconomic team of the PM.

Will all SOEs be listed on the stock market?

The plan was for the SOEs to list a certain percent of their value on the stock market. If SOEs like ET, ethio telecom and others trade 10 percent of their portion on the stock market, it builds the public’s confidence. But SOEs must meet stringent financial reporting systems.

I also hear that five percent of ethio telecom’s share will be sold on the stock market. SOEs that meet the right financial reporting system will be able to float shares on the stock market.

People are facing difficulties acquiring houses because real estate companies collect money from house seekers and disappear. The stock market will also solve this. Everything will take shape under the secondary market.

The government is allowing the establishment of new banks in the last two years. But lately it confirmed the opening up of the banking sector for foreigners. Isn’t this sending mixed signal?

Mergers can be done at any time. Then local banks can consolidate and ready for competition. PEHA is exemplary in merging CBB with the CBE six years ago. Private Banks must follow suit.

Local banks are in a comfort zone, registering lump profit, not because they are providing a class service. They are profiting because they are protected. Under state protection, they do not have to improve service. They survive at the expense of the client. Millions are saving in bank but only a few thousand get loans. All of this will change, once foreign banks come.

Yesuf Ibrahim is a founding member of the National Movement of Amhara (NaMA). He worked as the head of the strategic sector in the earlier stages of NaMA’s establishment. After its establishment, he worked as the head of the strategic sector for two years. After serving the organization as a vice chairman, he is currently working as the head of the party’s legal and ethical regulations and as a manager of the government’s property management authority. He received his LLM degree in law from Addis Ababa University and has worked as a law lecturer at a university. The Reporter’s Selamawit Mengesha sat down with Yesuf on issues concerning the party, region and the country at large.

The Reporter: How would you describe your participation from the time you first started working with the government as an opposition party, and the process until you became the manager of the government’s property management authority?

Yusuf Ibrahim: I have been heavily involved since the establishment of NaMA until its present stage. NaMA’s ideology is not an organization that paints itself as a liberator. It is synchronized with the people and the country.

Because the Amhara people have special problems and are being attacked by the constitution and narrative, protecting the people is one of the political targets. However, we have come to the historical notion that the attack on Amhara people is not something that has a special historical origin but an effort to destroy the country by making the community a victim.

The movement is one that could be traced back to colonialism. Weakening the beliefs, values, and social status of this community can be a way to destroy the country. Its origin is a colonial idea. Because of this ideology, a number of internal anarchist institutions were created.

By establishing such organizations, a political party based on identity has been established over time to save the Amhara people, who have suffered a lot. When the government moves into the phase of “change”, it is important to try because “change” has not yet been seen. When we look at the power alignment in Ethiopia, it is not a place where NaMA makes friends easily. In the course of time, after studying the intricate web of power, we analyzed the power that could become the friend of the enemy.

Compared to that, even if we can’t get along with everyone, we can work with anyone. As for figuring out to what extent and with whom, there are those who are known for backstabbing, so that’s a start. It was a timely analysis that was not particularly favorable to the Amhara. Therefore, it was established to fight anti-Amhara organizations.

Currently, even though it is an institution with many problems, we have an organizational position supported by a strategic document that we must work on together with the government. In general, it is necessary to work together with the government. When elections were planned to be held during COVID, there was pressure from many political organizations. Working together with the government was our own initiative.

We asked ourselves how we could safeguard the long-term interests of our country and people. We are a political organization and we take a position based on who we believe will betray us. We do this within the bounds of the law. It is necessary to work together with the government. They did not try to make it as big as NaMA, but there was pressure from other parties to make NaMA a part of the government, but the government did not want that. Regarding this, we explained to them that Prosperity is a traditional government.

This showed that the government was not proactive and did not identify its partners. As a party, it contributes greatly to the work of saving the country. We believe that we have especially united the people.

During this process, there was a conflict in the nature of misunderstandings between various issues, and because the problems of the parties and the government were not resolved quickly, it started to turn into a war.

With all of that happening, it was important to work with the government during that period. But keep in mind that working together with the government does not mean that we are the government but, in some cases, groundwork needs to be done. We had the idea that politics based on cooperation, not competition, was best suited for the landscape of the country.

Since the NaMA did not have a clear idea about working with the government (that is, we joined the government while the country was at war), we discussed it twice with the government when the issue was raised.

The matter has been tabled at the executive level. But it was fundamentally ignored by NaMA.

When the authority was given, I was called on the phone. I arrived in Gondar at 5 o’clock in the morning and was told that the appointment would be at 7:30. They have their own reasons for doing so. Since the appointment process was during the war, it was completed in secret until the end so as not to overwhelm the government.

On the side of the Prosperity Party, there was a bit of a misunderstanding because I received a call from the Addis Ababa city administration and then, on the same day, I received a call saying that they were looking for you for an appointment in the Amhara region; I made my own decision and chose Addis Ababa.

There is no problem with opposition parties working with the government. In Ethiopia, the process of democracy should gradually develop over time. Democracy needs to be improved by learning to work together.

In fact, it would be great if NaMA worked with the government. It would have been helpful if the lower level of government was more involved in areas such as kebeles and districts.

I made a proposal that if the government does not give us authority on the lower structure, we should give up big authority positions. But the party was not unified and could not consider the proposal.

NaMA is a party established to represent the people of Amhara. The Amhara people want you to be the voice of your party in any way. Working with the government means leading a multi-ethnic population, and haven’t you faced challenges in the middle?

This is also an issue of the reform process that the party intends to follow. The reform will work to clarify which level and which concept we are working on. There might be some changes in concept with the change of leadership.

It is about continuing to explore our strengths and solving our problems. The government does not exist only through the executive branch. The government has three branches and includes Parliament in the constitution.

We have representatives in the federal parliament in the state. The relationship between the party and its members at the top should be defined. As a party leader, when we work with the government, it must be based on the party’s principles. If I am going to move in that way, we should either leave the party or leave the leadership of the government.

There should be a strict procedure. In the current state of affairs, the federal structure that our party and the country are led by all is based on ethnic lines.

The constitution itself rarely even uses the word “citizen.” We want this to be liberal over time. We follow the philosophy that individual citizens should be the foundation of democracy. We want our organization to be a center for correcting the many mistakes made by extremists.

It should not be restricted only to Amhara. It should also be connected with other communities. Once this is fixed, the Ethiopian status will be announced. We believe that when we work as a party and as Amhara, we are operating as Ethiopia.

The Amhara community is the Ethiopian community. It has been pushed by many things. We are not saying it should be paid by revenge. We only remember the past to be able to fix the future. We do not believe that our people would be harmed if equality and freedom prevailed in Ethiopia. This is a modern principle. I do not believe that I am an advocate for the politics of a community at any time. As a company, we believe that we work for all Ethiopians.

It is one of the pillars of our society that it should not be affected by special circumstances. We want to be seen from the Ethiopian perspective. We do not want to separate Amhara. We want it to be governed by justice along with its fellow citizens. Amhara is affected in the same way that the rest of society is, but the incorrect narrative that has developed over time must be corrected. The question of who is the representative of political philosophy is bound to arise. Since NaMA is of Amhara origin, it is organized accordingly.

It is necessary to adapt to solve this problem for the time being. I think NaMA can adapt to all the parties. While working here, I am color-blind. I have neither the capacity nor the desire to take sides by saying who belongs to which nation. I also do not share such political views. We think that the perceptions created on us by the TPLF is in conflict with the people of Tigray. This is because the TPLF has been equating itself with the people of Tigray. But we still see their segregation. We believe that the TPLF is a criminal group. During the century, narcissistic institutions were created to hold back society and live for profit.

A while ago, it was tiring to find the issues that separate the people of Tigray and the people of Amhara. It was bound by various social, geographic, religious, and economic ties. We have to solve the existing problems with different justifiable methods. As it is known in Ethiopia, we do not accept ethnic politics. Therefore, I am running the people’s question in alignment with the government’s work.

Is there a division between the leadership of the government and other members of the party? What kind of situation is NaMA in right now?

Currently, changes are made every time political dynamism changes. The struggle is that when more energy is needed, society needs change. We have gone through many problems in our struggle for organization and society.

As the country’s problems continue to expand, members of the family are always at war. Therefore, leaders and members do not meet regularly. NaMA’s children are dying on the war fronts.

Don’t ask me how a peaceful party can fight with weapons. Since the declaration of seclusion, there has been a call to participate in the war. War has been waged on the Amhara people directly.

There are NaMA members in Raya, Wolkait, and in all the districts where there were members that were killed while in command of the brigade. There are several fighters in the structure. Therefore, the central one, the one at the top of each leadership, and the one at the bottom are not formally connected; we are connected informally.

During the second round of fighting, the party did not have a central committee or executive meeting for four months. Many gaps were created during that time, and it is not possible to update regularly. Politics brings the change of opinion closer to you when you meet and update regularly.

However, the more it is separated, the more the case is defined. So far, we’ve been supporting the idea that had majority support in debates. I have never seen a decision made without the approval of NaMA members.

Because we do not meet regularly, we have lost the opportunity to make decisions through debate and consensus. There were talks of NaMA coming into government appointments without the party’s consent, but in the process, although there were violations of discipline, the matter was adopted at the central committee level and this concept of working together will hopefully continue in the future.

The forces that wanted change were created in NaMA. First, there was a question that you should not lead the party part-time while in government, as the party requires a full-time dedication.

We will restructure. The party is a movement, and a movement needs to open up. It is not just a random party in power. Until the struggle reaches a certain level, the movement will open its doors and attract new talents, and it is not feasible to say that I will remain on the throne of the establishment once it is over. It is not correct, and it is not the principle of our struggle either.

People feel worried if there is no open discussion. There will be people who want to make the party a powerhouse. But in the end, the contradictions could not be easily reconciled.

On the other hand, it has shown differences in the way we see politics. But it is only in the top management that the difference should be noted. A certain difference was created between the Central Committee and the Executive Committee with only 10 to 20 people. There is no difference in the bottom structure of the broad members.

Due to Bahir Dar’s protest, I resigned on my own accord and changed from the position of vice chairman to the law department. What the party wants is not the change of one person or two. They say the movement wants to change from top to bottom. And this is their right.

An inquiring generation should be encouraged. There were misunderstandings with the top management. It deviated from NaMA and the general concept of democracy, which did not accept the reform and were going through a process that did not encourage internal democracy.

It is not a question of whether we like or hate individuals; it is a matter of history. It is the struggle of our people. It doesn’t define division for me. It is fundamentally settled by law. The structure is not split.

The main foundation is structure. I don’t think that the creation of division in the leadership of two or three people will divide the structure. We intend to hold a general assembly by October, which will hopefully restore NaMA.

Will the party become more organized by resolving the controversy within NaMA?

NaMA will come prepared. This happens at any party because it is a massive collection. The party needs time. The fight will then go into negotiations. The negotiation will be based on the concept of transitional justice from our point of view. There are a lot of processes that go through both material and human life. All of that should be resolved.

Politically, where are we going? Where are we going as a country and what is our collective ambition? NaMA must be prepared for this soon.

There are those who have applied what we brought as an idea to Ethiopian politics, which shows NaMa’s power to exert great pressure. After many pushes, debating and explaining to the people of Ethiopia, if politics is about to bear fruit, it will not happen unless the party exists.

There may be individuals with egos within the party leaders. They should be dealt with on the inside first. We were hoping that it wouldn’t show on the outside.

Most of the leadership and central committee members have petitioned the General Assembly’s request. A petition has been filed for reform. Yet undisciplined work is being done against the will of the people and the structure of the organization. That should be corrected. They are all being looked at from every angle.

Let us come to the current national issues. We have been at war for the past two years. Various efforts have been made to resolve the war peacefully, but another war broke out. Can you explain to us the whole political process and what Ethiopia’s politics should be in the future?

NaMA wants Ethiopian politics to be based on citizenship. Ethnic politics means a gathering of extremists where everyone who is offended hides. The TPLF and ONG should be held accountable for the Ethiopian-ism they attacked. It is a country known for caring and living together. Politicians must engage in a certain strategy. The structure should not be manipulated as intended.

NaMA will always cooperate with forces that can weaken the TPLF. As the TPLF has been in politics for a long time and has led the country, it must correct the mistakes of the past by deciding which is the most viable path for the future. They could not think of a way that would benefit the people of Tigray, whom they think they represent.

I do not think that the separation of the Amhara and Tigray peoples, a society that has lived together for many centuries and is bound by religion and culture, will achieve the goal. The people of Tigray must show that they are not enemies to the Amhara community.

During the war process, NaMA has been doing many other things by standing with the defense force, delivering food and coordinating with the diaspora. When the Amhara region was in battle, it gave studies on why they should fight for a purpose. It was heavily involved throughout the war.

How and under what conditions do you think the negotiations should be conducted?

Conflict always ends in negotiation. Even if the TPLF itself thinks that we should be divided, it knows that they will lack both resources and manpower. The TPLF should not go any further on the path of brutality and revenge. Ethiopia should follow the liberal approach and solve its problems. The war against the TPLF was not for revenge but was brought on by themselves.

In my view, I want transitional justice to happen. It is not because I believe transitional justice would calm everything down, but because it is an option. Justice is being served now, not for revenge but to bring harmony and move forward.

Negotiations should be conducted for the sake of peace and justice, with the decision that it will not happen again in the future and that what happened in the past was not right.

But in Ethiopia, it is seen that negotiations are used as a plot resource. It has been observed that only if the power to be negotiated is dangerous and one party wants to survive, is the proposal submitted for negotiation.

That is why I am afraid that the proposal presented by the TPLF might be some sort of treason. The deal requires a genuine broker. Since the war will inevitably end in negotiations, it all depends on who comes up with the better negotiating package. There is a risk that the negotiator who believes in violence may resort to violence at the negotiating table.

The TPLF should not exist as a political force. It is difficult to say that the TPLF is deceiving all these people with mobilization. I think most of them believe it. While the party was scattered, the individuals in the party lined up, reorganized, and attacked the defense force.

Such regeneration should not be ignored. The security guarantees should be adjusted and then they can enter into negotiations. A ceasefire is one way it can be done. But beyond that, there must be other stakeholders. The negotiations that should have been entered into after the collapse of the Derg left us in the situation we are in now. I believe that the Amhara region should have a negotiator on their behalf.

In the end, it should be known what level our politics should be at. Any person should be able to go and live in the area they want without being displaced from place to place because of ethnicity.

The TPLF has the capacity to rebel, not organize and re-enter. War itself should not be based on ethnicity. Who will benefit from this war?

There is no need to pretend like there is a war between two different countries. Both must work together. The negotiations must be conducted in moderation. Negotiations range from a ceasefire to a new proposal.

Although the African Union has little experience, it must mediate. They should all enter into the negotiation with good intentions. The very idea of secession is unethical.

To allow foreign banks, the banking proclamation, banking service code and the investment regulations must be revised. Especially, the code must allow banking for foreigners. The existing commercial code allows banking and insurance only for Ethiopians. Non Ethiopians cannot be investors, or operators.

Do you think the financial sector will be opened before five years?

I think so but I prefer it being delayed. All banks are giving loans to the service sector. Manufacturing and agriculture cannot grow unless we have banks that can give loans for long term projects. There are no consumer loans too.

Insurance companies complained over NBE’s order to direct 15 percent of their profit to DBE bond.

The rate has been reduced lately and the insurance companies agreed.

We must draw lessons from countries that have bridged the gender gap successfully. In some institutions, they say there are no women qualified to be board members. That is wrong.

Circulation of privately-owned papers is small and usually limited to Addis Ababa. Readership numbers are low.

A number of newspapers are now available online.

Ethiopian Reporter Business Page

MEDIA AND COMMINICATIONS CENTER (Ethiopian Reporter)

Media and Communication Center (MCC) a private limited media company established in 1995. Headquartered in Addis Ababa, Ethiopia MCC is the publisher of “Reporter” a bi-weekly Amharic, “The Reporter” a weekly English newspaper, a monthly Amharic and English magazines in both print and electronic versions.

Staff

MCC employs 137 permanent and part-time staff and has a sister company called the Horn of Africa Press Institute, which does research on Media related issues.

Mission and Vision

The Reporter’s motto “Free Press, Free Speech, Free Spirit” expresses the ideal of freedom that, journalists and editors, hope to enjoy and promote professional journalism.

MCC believes that it has responsibility to readers, the public, the people in and outside Ethiopia who rely on Reporter for news.

Each week we bring to the public critical stories without fear or favor and guarantee that our editorial choices about what to print are based on the importance and relevance of the topic to our country along with journalistic qualities. We refrain from any political, economic, or other unethical motivations.

We dedicate ourselves to help our readers in their effort to become an informed citizenry by giving as much information as possible.

We serve as a platform for the public’s thoughts, opinions and ideas by soliciting, accepting, reviewing and publishing letters and comments.

We intend to make our newspaper a model for those in our profession, a guide for novices.

Circulations and Reach

MCC distributes the newspapers and magazines to all business companies, governmental offices and non-governmental offices in Addis Ababa and all regional cities through subscription as well as street vendors.

Readers can access our news on our websites www.ethiopianreporter.com and www.thereporterethiopia.com and Reporter Tender Website www.reportertenders.com can download our apps from iTunes store and Google play to use on their android and IOS devices.

ሪፖርተር ዜና Media and Communication Center (MCC) a private limited media company established in 1995. Headquartered in Addis Ababa, Ethiopia MCC is the publisher of “Reporter” a bi-weekly Amharic, “The Reporter” a weekly English newspaper, a monthly Amharic and English magazines in both print and electronic versions.

Mission and Vision

The Reporter’s motto “Free Press, Free Speech, Free Spirit” expresses the ideal of freedom that, journalists and editors, hope to enjoy and promote professional journalism.

MCC believes that it has responsibility to readers, the public, the people in and outside Ethiopia who rely on Reporter for news.

Each week we bring to the public critical stories without fear or favor and guarantee that our editorial choices about what to print are based on the importance and relevance of the topic to our country along with journalistic qualities. We refrain from any political, economic, or other unethical motivations.

We dedicate ourselves to help our readers in their effort to become an informed citizenry by giving as much information as possible.

We serve as a platform for the public’s thoughts, opinions and ideas by soliciting, accepting, reviewing and publishing letters and comments.

We intend to make our newspaper a model for those in our profession, a guide for novices.

Circulations and Reach

MCC distributes the newspapers and magazines to all business companies, governmental offices and non-governmental offices in Addis Ababa and all regional cities through subscription as well as street vendors.

Readers can access our news on our websites www.ethiopianreporter.com and www.thereporterethiopia.com

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Policy caps foreigners’ acquisition in local banks to 40 percent

Local banks have less than one year to prepare

With an additional five percent stake allowed each for foreign individuals and foreign non-bank investors, the maximum stake local bank can sell to foreigners is capped at 40 percent.

Nigeria has confirmed that Ethiopian Airlines has been chosen as the core investor and partner for the country’s new flag carrier. Nigeria Air has been in the works for a while now and has slowly been approaching a full launch, pending support from partners. Ethiopian is Africa’s largest carrier and has shown a willingness to invest in new startups recently.

Foreign banks are allowed to acquire up to a 30 percent stake in local banks, according to a policy document approved by the Council of Ministers last month and obtained by The Reporter.

With an additional five percent stake allowed each for foreign individuals and foreign non-bank investors, the maximum stake local bank can sell to foreigners is capped at 40 percent.

Licensing foreign banks and implementation of the policy is slated to kick off in one year’s time from the ratification of the Banking Business Proclamation, whose amendment is already underway.

The highly confidential policy document has been off limits. The policy also excludes insurance and microfinance from the open-up initiative. It allows foreign banks to open a subsidiary firm and open branches in Ethiopia, besides giving an option to buy shares in local banks.

An NBE official that spoke to The Reporter confidentially stated that the window period for local banks until the liberalization takes off might not necessarily be one year.

“The Amendment to the Banking Business Proclamation is finalized and ready to be sent to the Council of Ministers. Most certainly, the proclamation will be approved in the current 2022/23 Ethiopian fiscal year. The licensing of foreign banks will start after the amendment of the banking business proclamation is finalized,” the official said.

The official believes that once the proclamation is amended, regulations and directives will follow, which can take six months or a year.

“We cannot say definitely that a bank will be opened up one year after the proclamation is finalized. It depends on our pace of finalizing the proclamation and the regulations and directives required to implement it,” the official added.

Foreign banks are also authorized to open a commercial representative branch in Ethiopia, a permit that was already given to some multinational lenders like Standard Bank, Egypt’s Commercial International Bank (CIB) and KCB Group.

The opening-up policy document was not revised after the Council ratified it. Comments forwarded by the Council are also not included, according to The Reporter’s sources.

The NBE will decide on the majority of the details regarding the implementation of the opening-up policy with the details to be stated in the upcoming proclamation, regulations, and directives, according to the NBE official.

“The policy is more of a broad perspective. Foreign banks, individuals, and strategic investors are allowed, but the exact ratio will be determined. Changes to investment regulations are not always necessary. The banking proclamation is sufficient by itself,” added the official.

Local banks are already in hot water since the Council of Ministers disclosed the approval of the open-up policy last month. Presidents of local banks The Reporter talked to, who did not have access to the policy documents so far, argued most of the decisions stated in the policy document.

“Of the four modalities, subsidiary and branch will have no benefit for Ethiopia. They are the biggest lunacy of Ethiopian government decisions. They will neither bring foreign currency nor improve the efficiency of Ethiopia’s banking industry. The government is wrong to assume local banks lack corporate culture and skills. I am sure if academicians and banking practitioners see the policy document, they will not approve it,” said a private bank president with two decades of experience.

He says the government committed two major breaches. “First, the government did not identify what it was really seeking to do to open the banking industry. Is it foreign exchange revenue, access to finance, efficiency, technology, or others? Then the government should have done intensive studies to determine which venue is suitable for that objective,” the bank president said.

“Secondly, the government did not discuss it with local banks and other stakeholders. The NBE did not discuss anything with us. The policy document is still kept a secret even after the Council approved it. It must be posted on the council’s website as soon as possible,” the president added.

Another bank president appreciated the decision to cap foreign bankers’ acquisitions. “Capping maximum equity local banks can sell to foreigners to minority shareholding ratios is very good. It will protect local shareholders and maintain the rights of local bankers. The issue with this equity acquisition is that there is no system in place to assess the value of local bank shares.”

“Since there is no stock market in Ethiopia, valuation of local banks is done traditionally. None of the local banks are listed on any stock market. The existing share market valuation system is traditional. Currently, shares of each of the local banks do not reflect the exact values. So there must be a new valuation system,” said the bank president.

On the other hand, he contends that valuing local banks at a time of peak birr depreciation will be detrimental to Ethiopia but beneficial to foreign banks and investors.

“The valuation will be high in terms of birr attributable to the devaluation. But in terms of dollars, the value is not large. Therefore, foreign banks and investors can acquire the stakes at a cheaper price in dollars. The injection of foreign banks into local banks will escalate inflation in Ethiopia because foreign investors will buy the shares with forex. But that forex is injected into the economy in birr, which is high in number. So the immediate impact of the banking opening-up will be higher inflation. I do not understand why Ethiopia keeps devaluing Birr,” he added.

The bank president also appreciated the one-year window period for preparation but questioned why private local banks have to work with the NBE to devise their competition strategy.

However, all the bank presidents rejected the government’s decision to ratify the open-up policy document without consulting them.

“The NBE did not even discuss with us the Banking Business Proclamation amendment underway, let alone the new policy. Many laws were introduced without consultation with bankers and have proved harmful to us. I understand the political and diplomatic benefits of this policy, which is why the Council hurried to ratify it without consulting us,” added the banker with two decades of experience.

For him, the policy is made to appease western countries, which are pressuring the government.

“Banking opening up is not as simple as opening up telecom, aviation, or any other sector. Ghana and Kenya sold their banks and became poor, overtaken by India, Pakistan, the UK and other countries’ banks. Many other countries, including in Africa, opened their banks after intensively deliberating on it and preparing a detailed catalogue of the modalities,” said the banker. “Nigeria, Ghana, Kenya, South Africa, Morocco, and Egypt all opened their banking sectors after much deliberation. Not all of these countries were successful after opening their banks. Unless wisely managed, this opening up will also make Ethiopia poor,” he added.

Ethiopia has canceled its contract with a Chinese company exploring oil and gas in the country since 2013, the government announced on Wednesday.

Takele Uma, Ethiopia’s minister of mines and petroleum, said the deal with Chinese firm Poly-GCL was called off because of its “financial and organizational inability” to develop gas in the Ogaden Basin, a resource-rich area in eastern Ethiopia, according to state-affiliated news agency Walta.

The report said Poly-GCL was issued a letter of ultimatum in March that listed several conditions for the company to fulfill.

“In accordance with the successive notices the Ministry has issued in the past and in full compliance with the PPSAs and the laws of the land, the termination has now been fully effected,” Takele said on Twitter.

“As long as the financing that would enable to develop the oil and gas fields the Ministry is open for mutual and expeditious settlement,” he added.

Takele had previously hinted that Poly-CGL’s contract would be terminated, saying that Ethiopia was actively searching for international companies that could develop the Ogaden’s confirmed reserves of 7 trillion cubic feet of natural gas.

Nigeria has confirmed that Ethiopian Airlines has been chosen as the core investor and partner for the country’s new flag carrier. Nigeria Air has been in the works for a while now and has slowly been approaching a full launch, pending support from partners. Ethiopian is Africa’s largest carrier and has shown a willingness to invest in new startups recently.

Ready to take off?

According to ThisDay, Nigeria’s federal government has formally chosen Ethiopian Airlines (Ethiopian) as a partner for the long-awaited Nigeria Air. The deal includes a 49% equity share for the airline, joined by 5% from the government since the project is set to be private-public. Notably, Ethiopian is sticking to its policy of not investing cash into a new business.

Instead, the airline will leverage its technical prowess, an abundance of aircraft, and management skills to establish Nigeria’s first flag carrier in years. While yet to be formally confirmed, an initial pool of pilots is set to arrive in Addis Ababa for basic training for certification on the Boeing 737NG.

Nigeria has confirmed that Ethiopian Airlines has been chosen as the core investor and partner for the country’s new flag carrier. Nigeria Air has been in the works for a while now and has slowly been approaching a full launch, pending support from partners. Ethiopian is Africa’s largest carrier and has shown a willingness to invest in new startups recently.

Ready to take off?

According to ThisDay, Nigeria’s federal government has formally chosen Ethiopian Airlines (Ethiopian) as a partner for the long-awaited Nigeria Air. The deal includes a 49% equity share for the airline, joined by 5% from the government since the project is set to be private-public. Notably, Ethiopian is sticking to its policy of not investing cash into a new business.

Instead, the airline will leverage its technical prowess, an abundance of aircraft, and management skills to establish Nigeria’s first flag carrier in years. While yet to be formally confirmed, an initial pool of pilots is set to arrive in Addis Ababa for basic training for certification on the Boeing 737NG.

The next few months will tell us more in terms of the airline’s timeline for takeoff. With a fleet of Boeing 737s and Dash 8s, we can expect a domestic and regional focus in the initial months, a market that has no shortage of travelers in Nigeria. Keep an eye out for this up-and-coming carrier in the near future.

Mesenbet Shenkute Re-elected to Lead Addis Chamber for Second Term

The one and only mortgage bank, Goh Betoch Bank, concludes the financial year with bright books, meanwhile it in fact operated for few months.
The bank which officially opened its doors on October 25, 2021 disclosed that the financial year that ended on June 30, 2022 was primarily used to finalize the formation process and create operational capacities like recruiting personnel, providing trainings, emplace core banking and data center facilities and others.
In the first months, the mortgage bank was also fully working on a five year strategy that was conducted in collaboration with HST Consulting PLC, a prominent consultancy firm.

Mulugeta Asmare, founding President of Goh Betoch Bank, said, adding, “We have also provided services to customers and have been able to mobilize deposits, provide loans, as well as facilitating some other operations like forex.”

The bank that has four branches including the one in Dire Dawa began providing loans in the fourth quarter of the financial year and disbursed over 300 million birr in this short period, while the deposit mobilization was about 260 million birr.
62 percent of Goh’s deposit mobilization is tending to savings for mortgage, which is its specialization even though it provides other basic commercial banking services.

In the financial year under review, the bank was able to conclude under a positive balance sheet, which is not common in the sector, “Compared with the period where we commenced our real operations, such types of success is quite rare.”
“We have been working to manage our expense. Thus for the closed period, we have attained to cover our costs including organizational expenses that were incurred starting from the under-formational processes, which started in 2019,” the President said.

“Despite working for a few months under limited scale, our income has surpassed the expenses, reeling in profits of 6.3 million birr,” he explained.
As a mortgage firm, the bank may not have a priority to run extraordinary ways of opening branches and in the current financial year it has targeted to double its branch number to including major cities like Hawassa and Bahir Dar.
Currently, the bank that has 127 staffs has four branches in Addis Ababa and Dire Dawa.

The Reporter Ethiopia

Patrick Hicks is a born-and-bred Texan from Waco. Fasicka Hicks is from Addis Ababa, the capital of Ethiopia. They met in 1997 after she immigrated to Texas.

Both of them liked to cook, and Patrick’s barbecue became a favorite of Fasicka’s Ethiopian family. Seeing her family’s delight gave Fasicka an idea.

The idea soon blossomed into Smoke N Ash, but it remained traditional Texas BBQ until 2019 when Fasicka decided to add Ethiopian options to the menu — and they soon became popular items.

With customers enjoying the two tastes together, the couple decided just having the meal share the same plate wasn’t enough. They decided to combine the flavors in the same recipe.

“And I was tellin’ him, ‘Hey, you know what? We can make money sellin’ this food.’ So we bought a trailer and made some extra money on the weekends. Before we know it, we start forming lines because people look forward to our cooking every weekend,” Fasicka recalled.

To guarantee authenticity, Fasicka’s sister gathers Ethiopian spices in Addis Ababa and ships them to Texas—the result is perhaps the only Ethiopian-Texas barbecue on the planet.

The Texas-Ethiopian platter is the signature dish at Smoke N Ash. American barbecue staples like brisket to catfish to Texas toast, as well as Ethiopian dishes like chicken doro wat are on the menu.

The couple says the success behind their restaurant isn’t the food but what it means to them.

“When it comes to food for me, it’s just about togetherness. You work on it with love and care, and you make it to be the best thing on the plate, on the table,” Fasicka said.

The couple says the success behind their restaurant isn’t the food but what it means to them.

“And I was tellin’ him, ‘Hey, you know what? We can make money sellin’ this food.’ So we bought a trailer and made some extra money on the weekends. Before we know it, we start forming lines because people look forward to our cooking every weekend,” Fasicka recalled.

Safaricom prepares to switch on Addis in early October

The amended National Payment Proclamation requires foreign and local fintech operators, including mobile money service providers, to pay a license fee regularly. The proclamation, which was passed by the Council of Ministers last month, is expected to be ratified once Parliament is back from recesses.

Officials at the central bank told The Reporter that “the amount is not fixed. It will be stated in the directives of the proclamation. We are currently finalizing the directive required to put the proclamation into effect.”

The amendment of the 2011 proclamation is necessitated to open the mobile money sector to foreign operators. This came especially after Safaricom Ethiopia requested to bring onboard its mobile money arm, Mpesa.

However, Mpesa, a Kenyan mobile money service provider awaiting the amendment of the National Payment Proclamation, is unhappy with the requirement for a license fee, sources close to the matter told The Reporter.

Mpesa is already undertaking preparations to enter the Ethiopian market after government officials gave the green light last year. Managers of Safaricom Ethiopia also confirmed to The Reporter that technical work is already afoot.

“Mpesa has already started building the backdoor software developments. At the beginning, Ethiopian officials told us there would be no license fee for Mpesa. But now, they are telling us there will be a license fee,” complained an official working with the Safaricom Ethiopia, linking the inconsistency with the ebbing Ethiopia’s forex reserve.

However Tewedaj Eshetu, public relations and communication manager at Safaricom Ethiopia, said, “We are waiting for the proclaimation to be ratified.”

Managers of local mobile money companies believe the license fee is a global trend and the amount is not as large as many fear.

“The NBE consulted with owners of mobile money companies before approving the amended Payment System Proclamation. Comments and complaints were included during the stakeholders’ discussion on the draft document,” said a manager of a local mobile money company.

On the other hand, Safaricom Ethiopia is currently preparing for a wide service provision.

Safaricom will launch commercial service in Addis Ababa at a national level in October, according to Tewedaj, though she refrained from disclosing the exact date.

However, sources close to The Reporter disclosed that the launch date is slated for October 6, 2022. A grand ceremony in the presence of higher Ethiopian officials and top management of the five consortiums of Safaricom Ethiopia Plc is expected to be held on the day.

Safaricom launched its first service in Dire Dawa town last month, with a plan to reach 25 cities, including Addis Ababa, by April 2023.

Ever since the start of a brutal war between the government of Ethiopia and the forces of Tigray People’s Liberation Front (TPLF) following the latter’s unprovoked attack on the troops of the Northern Command of the Ethiopian National Defence Forces (ENDF) based in the northern region of Tigray on November 3, 2020, Ethiopia has been subjected to an unrelenting campaign of hybrid warfare waged by a set of actors with vested interests. The campaign has comprised of different actions including an informational warfare depicting Ethiopia in a negative light, a coordinated diplomatic pressure aimed at coercing Ethiopia into submitting to the demands of the TPLF as well as imposing punitive sanctions on the country and withdrawing its benefits under the United States’ tariff-free African Growth and Opportunity Act (AGOA). Western governments and such institutions as the U.N., Western mainstream media, humanitarian aid agencies, human rights “defenders” and think tanks figure prominently among the slew of actors which have been involved in the grey-zone tactics being pursued against Ethiopia.

The latest example of the diplomatic pressure being brought to bear on Ethiopia is the release this week of a politicized report by the International Commission of Human Rights Experts on Ethiopia (ICHREE). Derided by any Ethiopians as a braze attempt whose overarching goal is to demonize the Ethiopian government, the ENDF, the Amhara Militia and Fano, the report’s “findings” gloss over documented atrocities perpetrated by the TPLF. The report says the Commission has reasonable grounds to believe that the ENDF and Eritrean Defense Forces (EDF) committed a catalogue of egregious crimes ranging from widespread extrajudicial killing and injuring of civilians to rapes and other forms of sexual violence against Tigrayan women and girls, and looting and destruction of civilian infrastructure. It also indicates there were reasonable grounds to believe that the Federal Government and allied regional State governments implemented a widespread range of measures designed to systematically deprive the population of Tigray of material and services indispensable for its survival, including healthcare, shelter, water, sanitation, education and food. As for the TPLF, it says Tigrayan Forces have also committed acts of rape and sexual violence, albeit on a smaller scale, and killed civilians and persons rendered hors de combat, looted, and damaged or destroyed civilian infrastructure and property in two towns in the Amhara region.

The ICHREE report is riddled with a raft of shortcomings that rob it of credibility. As the Ethiopian government says, “… the report was written in breach of all principles of professionalism, independence, impartiality, and standards of proof entailed in any such process under international practice”. The Commission, by its own admission, carried out a remote investigation into selected incidents and themes even as it excluded from its report the serious human rights and humanitarian law violations which could amount to war crimes and crimes against humanity in the Afar region. The omission of an entire region— whether by design, negligence or lack of capacity—from the Commission’s investigative work misrepresents the true state of things in the war-affected northern region of Ethiopia. It also constitutes a clear failure to “conduct a thorough and impartial investigation into allegations of violations and abuses of [international human rights law, international humanitarian law, and international refugee law in Ethiopia committed since 3 November 2020 by all parties to the conflict…] by building upon the report of the Office of the High Commissioner and the Ethiopian Human Rights Commission.” Moreover, the Commission’s use of language implying that the Ethiopian government has engaged in acts that may amount to ethnic cleansing is entirely unbefitting a human rights body and lays bare its political bent.

The Ethiopian government had rightfully condemned the decision to establish the ICHREE from the outset, describing it as being imposed on it without its consent and an unwarranted meddling into its internal affairs under the guise of protecting human rights. The Ethiopian Human Rights Commission also reserved criticism for the decision arguing the creation of a new body was repetitive, counterproductive to the ongoing implementation processes as per the recommendations of the joint investigation it undertook with the UN rights office into the alleged violations and abuses committed prior to the unilateral cease-fire declared by the Ethiopian government in June 2021, and further delayed redress for victims and survivors. In fact following the adoption of the joint investigative report, the Ethiopian government established the Inter-Ministerial Taskforce (IMTF) to comprehensively deliver on accountability and redress measures and initiated an independent criminal investigation. These flaws thus tends to undercut a fundamental principle of international law, namely that the primary responsibility for the promotion and protection of human rights rests with states themselves.

Western governments and such international institutions they control as the U.N. have a checkered history when it comes to the protection of human rights. Although they espouse human rights values in their rhetoric and policies, their excoriation of human rights violations are by and large is dependent on the extent to which other countries (or certain groups) are willing to obey their commands. Consequently, the horrendous human rights violations states and groups, such as the TPLF, that have cultivated friendly ties with the West or dutifully carry out the West’s bidding, commit are whitewashed or completely ignored. That is why the assertion that the ICHREE magnified the alleged atrocities committed by the Ethiopian government while making a perfunctory mention of the slaughtering of innocent civilians, rape and sexual abuse, use of child soldiers, pillaging, and destruction of civilian infrastructures the terrorist-designated group is guilty of would not be far off the mark. If the U.N. or for that matter any other international body tasked with advancing the protection of all human rights for all people, empowering people to realize their rights, and assisting those responsible for upholding such rights in ensuring that they are implemented, they must never be weaponized for political ends.

Budget allocated by the Ministry of Education for public universities has been utilized for political purposes, a report published by the Ethiopian Ethics and Anti-corruption Commission reads.

The Commission’s report, which was initiated to assess corruption risks in the private and public educational sector, highlighted a plethora of issues in both public and private-owned educational institutions which severely compromise the quality of education.

The report, which The Reporter has obtained, shows that there is a corrupted and political party-affiliated organizational system in educational development programs in those institutions. Illegal and inappropriate recruitment of teachers and other staff members, employing relatives and family members and recruitment of staff with fake educational certificates are also mentioned.

Many staff members of some educational institutions have employees with fake education certificates, while private university colleges are printing and selling degrees and diplomas like a good, and registrars purposely destroy students’ certificates and request money to replace them, according to the report.

It showed that while the university structure attempts to preserve the reputation of those who are in power, private schools, on their part, seek to preserve the interests of their students as commodity customers.

The absence of teachers from their classes, fake educational certificates, leaders’ engagement in theft, illegal employee recruitment and development, inappropriate procurement, lack of clear transparency and working system, inappropriate registrars’ staff members’ engagement malpractices, and tender embezzlement pose risks to educational quality, according to the finding.

The report underlines how colleges and university administrators compromised the quality of buildings by plotting and signing with the contractor to accept buildings before their completion date.

The study, which was conducted in 61 institutions, revealed a lack of internal financial control mechanisms, purchased goods of low quality, and budget allocation for politically motivated activities outside educational institutions’ key responsibilities.

Most of those educational institutions were reluctant to provide the requested information to undertake the assessment, unable to obtain accurate information and due to the absence of leaders in their working places, according to the finding.

The Reporter’s endeavors to get comments from the Ministry of Education bore no fruit as some officials were unable to respond.

However, Ethiopia’s education and training authority communication director, Tarekegne Geresu, speaking about private colleges, said that despite there being certain issues that might be considered findings, the authority has clear criteria to uphold rules and regulations in private schools.

Tarkegne also mentioned the authority’s ongoing efforts to identify and take serious measures against over 200 institutions, reaching up to the revocation of licenses and closure of institutions.

“After graduation, we provide authentication for every single degree certificate, and unless the authority certifies this certificate, employers should not recruit those with unverified certificates from private colleges,” Tarkegne told The Reporter.

Only seven insurers meet the new threshold

The National Bank of Ethiopia (NBE) raised the minimum paid-up capital of insurance firms by six-fold. The revised ‘Minimum Paid-up Capital for Insurance Company’, which is effective as of September 15, 2022, replaced the existing threshold introduced in 2013.

The new capital requirement to obtain a general insurance license is 400 million birr, up from 60 million birr. The minimum capital for long-term insurance licenses was also raised from 15 million to 100 million birr. A company needs to deposit 500 million birr in a closed account to obtain a license for both, which was 75 million birr under the old directive.

Existing insurance companies whose paid-up capital is below the new threshold are given a five-year window period to meet the new minimum threshold by the end of June 30, 2027. However, these insurers are required to submit an action plan to the NBE by October 16, 2022.

“There is plenty of time to fulfill the requirement. The minimum requirement was very low from the outset,” said Zafu Eyessueswork, a veteran in the industry and founder of United Insurance and Hibret Bank.

Fikru Tsegaye, an insurance profession known for his commentaries in the sector, also welcomed the decision.

“The inflation has been eating the capital of insurers. If you compare capital of insurance companies against dollar, it was declining, so the amendment is a step in a right direction,” said Fikru.

Out of the 18 existing insurance companies in the country, only seven have capital of more than 500 million birr, according to NBE’s report. The insurance industry has been struggling with low market penetration and declining premiums in a stiff competition for the limited market niche.

However, the old directive remains active for new insurance firms in the pipeline until September 15, 2023. This means organizers of new insurance firms can attain a license under the existing directive in the next year. A discussion is underway to adjust license fee required to acquire new license and renew existing ones. The fee is expected to be adjusted by 2000 percent, though that is still under discussion.

The new directive states that insurance companies in the process of share subscription that successfully collect a minimum paid-up capital of 60 million birr for general insurance business, 15 million birr for long-term insurance business, or 75 million birr for both, and submit a final application to NBE within one year after the effective date of the new directive, shall get the license.

Industry players called the new directive “hair-raising,” as the insurance industry’s growth remains nascent.

“Raising the minimum capital from 75 million to 500 million birr at once is very difficult. The new directive is inconsiderable to the difficulties the industry is facing. The industry has achieved very little capital growth in the past 20 years due to the nascent environment. The NBE itself has contributed to the weakness of the industry,” said an insurance consultant speaking to The Reporter regarding the new directive.

“The NBE was never giving appropriate attention to insurance, as the central bank was primarily occupied with banks. We have been requesting the government for the insurance industry to be regulated by a commission, authority, or agency separate from the NBE. We believe this will help the insurance industry to get better support and better attention,” the consultant explained.

Yesuf Ibrahim is a founding member of the National Movement of Amhara (NaMA). He worked as the head of the strategic sector in the earlier stages of NaMA’s establishment. After its establishment, he worked as the head of the strategic sector for two years. After serving the organization as a vice chairman, he is currently working as the head of the party’s legal and ethical regulations and as a manager of the government’s property management authority. He received his LLM degree in law from Addis Ababa University and has worked as a law lecturer at a university. The Reporter’s Selamawit Mengesha sat down with Yesuf on issues concerning the party, region and the country at large.

The Reporter: How would you describe your participation from the time you first started working with the government as an opposition party, and the process until you became the manager of the government’s property management authority?

Yusuf Ibrahim: I have been heavily involved since the establishment of NaMA until its present stage. NaMA’s ideology is not an organization that paints itself as a liberator. It is synchronized with the people and the country.

Because the Amhara people have special problems and are being attacked by the constitution and narrative, protecting the people is one of the political targets. However, we have come to the historical notion that the attack on Amhara people is not something that has a special historical origin but an effort to destroy the country by making the community a victim.

The movement is one that could be traced back to colonialism. Weakening the beliefs, values, and social status of this community can be a way to destroy the country. Its origin is a colonial idea. Because of this ideology, a number of internal anarchist institutions were created.

By establishing such organizations, a political party based on identity has been established over time to save the Amhara people, who have suffered a lot. When the government moves into the phase of “change”, it is important to try because “change” has not yet been seen. When we look at the power alignment in Ethiopia, it is not a place where NaMA makes friends easily. In the course of time, after studying the intricate web of power, we analyzed the power that could become the friend of the enemy.

Compared to that, even if we can’t get along with everyone, we can work with anyone. As for figuring out to what extent and with whom, there are those who are known for backstabbing, so that’s a start. It was a timely analysis that was not particularly favorable to the Amhara. Therefore, it was established to fight anti-Amhara organizations.

Currently, even though it is an institution with many problems, we have an organizational position supported by a strategic document that we must work on together with the government. In general, it is necessary to work together with the government. When elections were planned to be held during COVID, there was pressure from many political organizations. Working together with the government was our own initiative.

We asked ourselves how we could safeguard the long-term interests of our country and people. We are a political organization and we take a position based on who we believe will betray us. We do this within the bounds of the law. It is necessary to work together with the government. They did not try to make it as big as NaMA, but there was pressure from other parties to make NaMA a part of the government, but the government did not want that. Regarding this, we explained to them that Prosperity is a traditional government.

This showed that the government was not proactive and did not identify its partners. As a party, it contributes greatly to the work of saving the country. We believe that we have especially united the people.

During this process, there was a conflict in the nature of misunderstandings between various issues, and because the problems of the parties and the government were not resolved quickly, it started to turn into a war.

With all of that happening, it was important to work with the government during that period. But keep in mind that working together with the government does not mean that we are the government but, in some cases, groundwork needs to be done. We had the idea that politics based on cooperation, not competition, was best suited for the landscape of the country.

Since the NaMA did not have a clear idea about working with the government (that is, we joined the government while the country was at war), we discussed it twice with the government when the issue was raised.

The matter has been tabled at the executive level. But it was fundamentally ignored by NaMA.

When the authority was given, I was called on the phone. I arrived in Gondar at 5 o’clock in the morning and was told that the appointment would be at 7:30. They have their own reasons for doing so. Since the appointment process was during the war, it was completed in secret until the end so as not to overwhelm the government.

On the side of the Prosperity Party, there was a bit of a misunderstanding because I received a call from the Addis Ababa city administration and then, on the same day, I received a call saying that they were looking for you for an appointment in the Amhara region; I made my own decision and chose Addis Ababa.

There is no problem with opposition parties working with the government. In Ethiopia, the process of democracy should gradually develop over time. Democracy needs to be improved by learning to work together.

In fact, it would be great if NaMA worked with the government. It would have been helpful if the lower level of government was more involved in areas such as kebeles and districts.

I made a proposal that if the government does not give us authority on the lower structure, we should give up big authority positions. But the party was not unified and could not consider the proposal.

NaMA is a party established to represent the people of Amhara. The Amhara people want you to be the voice of your party in any way. Working with the government means leading a multi-ethnic population, and haven’t you faced challenges in the middle?

This is also an issue of the reform process that the party intends to follow. The reform will work to clarify which level and which concept we are working on. There might be some changes in concept with the change of leadership.

It is about continuing to explore our strengths and solving our problems. The government does not exist only through the executive branch. The government has three branches and includes Parliament in the constitution.

We have representatives in the federal parliament in the state. The relationship between the party and its members at the top should be defined. As a party leader, when we work with the government, it must be based on the party’s principles. If I am going to move in that way, we should either leave the party or leave the leadership of the government.

There should be a strict procedure. In the current state of affairs, the federal structure that our party and the country are led by all is based on ethnic lines.

The constitution itself rarely even uses the word “citizen.” We want this to be liberal over time. We follow the philosophy that individual citizens should be the foundation of democracy. We want our organization to be a center for correcting the many mistakes made by extremists.

It should not be restricted only to Amhara. It should also be connected with other communities. Once this is fixed, the Ethiopian status will be announced. We believe that when we work as a party and as Amhara, we are operating as Ethiopia.

The Amhara community is the Ethiopian community. It has been pushed by many things. We are not saying it should be paid by revenge. We only remember the past to be able to fix the future. We do not believe that our people would be harmed if equality and freedom prevailed in Ethiopia. This is a modern principle. I do not believe that I am an advocate for the politics of a community at any time. As a company, we believe that we work for all Ethiopians.

It is one of the pillars of our society that it should not be affected by special circumstances. We want to be seen from the Ethiopian perspective. We do not want to separate Amhara. We want it to be governed by justice along with its fellow citizens. Amhara is affected in the same way that the rest of society is, but the incorrect narrative that has developed over time must be corrected. The question of who is the representative of political philosophy is bound to arise. Since NaMA is of Amhara origin, it is organized accordingly.

It is necessary to adapt to solve this problem for the time being. I think NaMA can adapt to all the parties. While working here, I am color-blind. I have neither the capacity nor the desire to take sides by saying who belongs to which nation. I also do not share such political views. We think that the perceptions created on us by the TPLF is in conflict with the people of Tigray. This is because the TPLF has been equating itself with the people of Tigray. But we still see their segregation. We believe that the TPLF is a criminal group. During the century, narcissistic institutions were created to hold back society and live for profit.

A while ago, it was tiring to find the issues that separate the people of Tigray and the people of Amhara. It was bound by various social, geographic, religious, and economic ties. We have to solve the existing problems with different justifiable methods. As it is known in Ethiopia, we do not accept ethnic politics. Therefore, I am running the people’s question in alignment with the government’s work.

Is there a division between the leadership of the government and other members of the party? What kind of situation is NaMA in right now?

Currently, changes are made every time political dynamism changes. The struggle is that when more energy is needed, society needs change. We have gone through many problems in our struggle for organization and society.

As the country’s problems continue to expand, members of the family are always at war. Therefore, leaders and members do not meet regularly. NaMA’s children are dying on the war fronts.

Don’t ask me how a peaceful party can fight with weapons. Since the declaration of seclusion, there has been a call to participate in the war. War has been waged on the Amhara people directly.

There are NaMA members in Raya, Wolkait, and in all the districts where there were members that were killed while in command of the brigade. There are several fighters in the structure. Therefore, the central one, the one at the top of each leadership, and the one at the bottom are not formally connected; we are connected informally.

During the second round of fighting, the party did not have a central committee or executive meeting for four months. Many gaps were created during that time, and it is not possible to update regularly. Politics brings the change of opinion closer to you when you meet and update regularly.

However, the more it is separated, the more the case is defined. So far, we’ve been supporting the idea that had majority support in debates. I have never seen a decision made without the approval of NaMA members.

Because we do not meet regularly, we have lost the opportunity to make decisions through debate and consensus. There were talks of NaMA coming into government appointments without the party’s consent, but in the process, although there were violations of discipline, the matter was adopted at the central committee level and this concept of working together will hopefully continue in the future.

The forces that wanted change were created in NaMA. First, there was a question that you should not lead the party part-time while in government, as the party requires a full-time dedication.

We will restructure. The party is a movement, and a movement needs to open up. It is not just a random party in power. Until the struggle reaches a certain level, the movement will open its doors and attract new talents, and it is not feasible to say that I will remain on the throne of the establishment once it is over. It is not correct, and it is not the principle of our struggle either.

People feel worried if there is no open discussion. There will be people who want to make the party a powerhouse. But in the end, the contradictions could not be easily reconciled.

On the other hand, it has shown differences in the way we see politics. But it is only in the top management that the difference should be noted. A certain difference was created between the Central Committee and the Executive Committee with only 10 to 20 people. There is no difference in the bottom structure of the broad members.

Due to Bahir Dar’s protest, I resigned on my own accord and changed from the position of vice chairman to the law department. What the party wants is not the change of one person or two. They say the movement wants to change from top to bottom. And this is their right.

An inquiring generation should be encouraged. There were misunderstandings with the top management. It deviated from NaMA and the general concept of democracy, which did not accept the reform and were going through a process that did not encourage internal democracy.

It is not a question of whether we like or hate individuals; it is a matter of history. It is the struggle of our people. It doesn’t define division for me. It is fundamentally settled by law. The structure is not split.

The main foundation is structure. I don’t think that the creation of division in the leadership of two or three people will divide the structure. We intend to hold a general assembly by October, which will hopefully restore NaMA.

Will the party become more organized by resolving the controversy within NaMA?

NaMA will come prepared. This happens at any party because it is a massive collection. The party needs time. The fight will then go into negotiations. The negotiation will be based on the concept of transitional justice from our point of view. There are a lot of processes that go through both material and human life. All of that should be resolved.

Politically, where are we going? Where are we going as a country and what is our collective ambition? NaMA must be prepared for this soon.

There are those who have applied what we brought as an idea to Ethiopian politics, which shows NaMa’s power to exert great pressure. After many pushes, debating and explaining to the people of Ethiopia, if politics is about to bear fruit, it will not happen unless the party exists.

There may be individuals with egos within the party leaders. They should be dealt with on the inside first. We were hoping that it wouldn’t show on the outside.

Most of the leadership and central committee members have petitioned the General Assembly’s request. A petition has been filed for reform. Yet undisciplined work is being done against the will of the people and the structure of the organization. That should be corrected. They are all being looked at from every angle.

Let us come to the current national issues. We have been at war for the past two years. Various efforts have been made to resolve the war peacefully, but another war broke out. Can you explain to us the whole political process and what Ethiopia’s politics should be in the future?

NaMA wants Ethiopian politics to be based on citizenship. Ethnic politics means a gathering of extremists where everyone who is offended hides. The TPLF and ONG should be held accountable for the Ethiopian-ism they attacked. It is a country known for caring and living together. Politicians must engage in a certain strategy. The structure should not be manipulated as intended.

NaMA will always cooperate with forces that can weaken the TPLF. As the TPLF has been in politics for a long time and has led the country, it must correct the mistakes of the past by deciding which is the most viable path for the future. They could not think of a way that would benefit the people of Tigray, whom they think they represent.

I do not think that the separation of the Amhara and Tigray peoples, a society that has lived together for many centuries and is bound by religion and culture, will achieve the goal. The people of Tigray must show that they are not enemies to the Amhara community.

During the war process, NaMA has been doing many other things by standing with the defense force, delivering food and coordinating with the diaspora. When the Amhara region was in battle, it gave studies on why they should fight for a purpose. It was heavily involved throughout the war.

How and under what conditions do you think the negotiations should be conducted?

Conflict always ends in negotiation. Even if the TPLF itself thinks that we should be divided, it knows that they will lack both resources and manpower. The TPLF should not go any further on the path of brutality and revenge. Ethiopia should follow the liberal approach and solve its problems. The war against the TPLF was not for revenge but was brought on by themselves.

In my view, I want transitional justice to happen. It is not because I believe transitional justice would calm everything down, but because it is an option. Justice is being served now, not for revenge but to bring harmony and move forward.

Negotiations should be conducted for the sake of peace and justice, with the decision that it will not happen again in the future and that what happened in the past was not right.

But in Ethiopia, it is seen that negotiations are used as a plot resource. It has been observed that only if the power to be negotiated is dangerous and one party wants to survive, is the proposal submitted for negotiation.

That is why I am afraid that the proposal presented by the TPLF might be some sort of treason. The deal requires a genuine broker. Since the war will inevitably end in negotiations, it all depends on who comes up with the better negotiating package. There is a risk that the negotiator who believes in violence may resort to violence at the negotiating table.

The TPLF should not exist as a political force. It is difficult to say that the TPLF is deceiving all these people with mobilization. I think most of them believe it. While the party was scattered, the individuals in the party lined up, reorganized, and attacked the defense force.

Such regeneration should not be ignored. The security guarantees should be adjusted and then they can enter into negotiations. A ceasefire is one way it can be done. But beyond that, there must be other stakeholders. The negotiations that should have been entered into after the collapse of the Derg left us in the situation we are in now. I believe that the Amhara region should have a negotiator on their behalf.

In the end, it should be known what level our politics should be at. Any person should be able to go and live in the area they want without being displaced from place to place because of ethnicity.

The TPLF has the capacity to rebel, not organize and re-enter. War itself should not be based on ethnicity. Who will benefit from this war?

There is no need to pretend like there is a war between two different countries. Both must work together. The negotiations must be conducted in moderation. Negotiations range from a ceasefire to a new proposal.

Although the African Union has little experience, it must mediate. They should all enter into the negotiation with good intentions. The very idea of secession is unethical.

Olufunso Somorin (PhD)

Olufunso Somorin (PhD), regional principal officer of climate change and green growth for the eastern Africa region at the African Development Bank (AfDB), was in Addis Ababa to participate in a high-level technical conference on climate change aimed at summarizing takeaways for the upcoming COP27 conference. He presented his research titled “Adaptation Agenda: Beyond COP27” during the meeting on September 13 at the Hyatt Regency in Addis Ababa. Ashenafi Endale of The Reporter sat down with the expert to learn more about initiatives underway to lessen the effects of climate change on the global south and the rest of the world.

The Reporter: Africa emits only four percent of the global Greenhouse Gas emmisions (GHG), so why should Africa bear the burden of climate damage caused by the rest of the world?

Olufunso Somorin: Africa’s total GHG emissions are 3.8 percent. Compared to countries such as the US, a region like Europe, or even a country like China, this is very low for a continent of over one billion people. Africa is not responsible for climate damage.

However, when it comes to the impact of climate change, Africa is the most vulnerable. That is why more conversation is crucial to changing the global climate change discourse.

The region that is the least responsible is the region that is the most affected.

How much of their GDP are African countries losing to climate change?

The impact is already affecting the African population, economies, infrastructure, etc. The development we have achieved so far is under enormous threat due to climate change.

Every African country spends anywhere between two percent to 10 percent of its annual GDP dealing with the effects of climate change. This is an enormous resource that could be used to build more infrastructure, train more teachers, invest in energy and other development projects. The magnitude of climate change in African economies is hugely affecting development.

A large chunk of the available climate resources in Africa goes to mitigation. Currently, you are advocating shifting that resource from mitigation to adaptation. What exactly do we mean by climate adaptation projects?

There is a paradox that the region that needs the most global climate finance to respond to climate change is also the region getting the least.

Africa receives only three percent of global finance. This is despite the fact that Africa is the least contributor to the climate crisis but the most affected. This is what we need to change. Between 80 and 90 percent of the money that comes to Africa is used to mitigate climate change. Of course, mitigation is also good for development. When you use renewable energy, you are increasing access to power.

But adaptation, which is implemented across many sectors, is much more rewarding. Our economies in Africa are very dependent on weather systems. Agrarian societies account for up to 80 percent of the population. The moment there is a change in weather, for instance, a five percent change in rainfall, can lead to a significant impact in crops, and instant impact on food security. If the rain is delayed just by a season, it has a direct impact on food security.

So adaptation entails doing agriculture correctly, using water resources appropriately, refraining from activities that affect rain, and changing one’s mindset in order to achieve a stable climate. Adaptation is not for one sector, it is for every sector. There is a possibility in every sector for adaptation.

How much is Africa spending on climate change, and how much of it is coming from local financial sources?

There is a data accuracy problem. There is a lot of funding and finance that many countries are undertaking to handle climate change. They are not reporting it. Keep in mind that African countries spend between two and 10 percent of their GDP to respond to climate change disasters. So the data is not perfect because they are not reporting it precisely.

Domestic resources for adaptation are still low. Of course, it is very much under-reported. Nobody wants a climate-resilient modern Africa. Nobody desires a prosperous and modern Africa. So it should be our desire and our job to be climate resilient. We already paid for it. Our responses must be structured, coordinated, and lasting.

Is humanitarian assistance mitigation or adaptation?

Humanitarian assistance is a short-term coping mechanism; hence, it is a mechanism. Adaptation is a continuous, long-term solution. You do not move from zero to a hundred at once. The greater the risk, the more we need adaptation.

So adaptation is always in relation to the risks at hand, so you cannot achieve the highest level of adaptation. People affected by climate change on the ground are coping every day. But those are short-term solutions. They cannot respond to larger pressures.

A humanitarian response, if it is to respond to a climate crisis, is an adaptation measure.

How can we shift from mitigation to adaptation?

We do not shift in a way that ignores mitigation. We allocate more values, resources, responses, institutional systems, and capacity for adaptation.

Have African countries approved the National Adaptation Finance Framework (NAFF) so far?

NAFF is an idea we are testing. In many countries, including Ethiopia right now, we have developed a number of policy documents on adaptation. We have a national adaptation program of actions (NAPA), national adaptation plans (NAPs), and an adaptation component in our NDCs. Ethiopia has a climate resilient green economy (CRGE) strategy. Apart from the NDC, there are a lot of adaptation plans in various sectors.

However, none of these plans specify where the money will come from. All countries, including Ethiopia, have the plans but lack the financing. That is why we are developing the framework.

For instance, if Ethiopia introduces a strategy that charges an additional two dollars per every tourist or traveler coming to Ethiopia, which the airline collects per ticket, and that two dollars goes to a climate resilient fund, that is an innovative way of raising money to finance adaptation. Ethiopia can also levy a 0.5 percent tax on every business operating in the agricultural sector, and we call it the ecological or agricultural productivity fund.

We can also formulate legal frameworks in which every private sector operator reports what they are doing on climate change. You give them a template for how they report. Then the finance is aggregated and channeled to adaptation. We are ultimately thinking of a national level adaptation approach.

There is no such thing as a climate change project. What we have is a “climate-informed development project.” That is very important. If we mainstream adaptation into all our development projects, that is how adaptation works.

Do you recommend mandatory finance contributions for the private sector and other institutions?

Consider it a business strategy. The financial framework in Ethiopia may be different from that in Kenya, Nigeria, or others. Adaptation is very local. Adaptation does not operate in a vacuum. Adaptation is nested in an institutional structure in place, social relations in a country, and state-society interactions. It is crucial to capture that and craft a financial strategy around it.

We must start thinking of adaptation as something critical for development. We have to find an innovative way of funding it.

How can the private sector turn the climate change crisis into a business opportunity?

The private sector itself depends on climate change. Climate change is a risk for the private sector too. By investing in adaptation, it is also a way for the private sector to guard its own investments and do sustainable business. Businesses are not completely insulated from the climate crisis. When they see that as a threat to their business and start to respond, businesses start to adapt.

The private sector is not exonerated. There are opportunities and advantages for the private sector to channel private capital into adaptability.

Do you think Africa is exploiting carbon trading?

The good thing about the carbon market is that even though it focuses on mitigation, it exists largely in sectors that are adaptability-oriented. Whether it is forestry, as in the African case, conservation, nature-based solutions, carbon trading can be an adaptation intervention. Reducing emissions is the core target of all NDCs, including Ethiopia.

Carbon trading is a good opportunity. The financial flow from the carbon market and investment can also trigger adaptation finance.

What do we expect from COP27?

Cop27 is very important for Africa, because we need to be able to make progress on the financial commitments that the developed countries have made. There is also something about capital that is additional and predictable.

We need capital in quantity and quality. We need a lot of money. Somebody can pledge a trillion dollars and put too many conditions on the table, so you may not get even five percent of it. In such cases, the money has the quantity side, but the quality side is very difficult.

Africa needs a climate adaptability roadmap. Climate action is just a basket containing mitigation and adaptability. The truth is that mitigation and adaptation are different. The approaches, strategies, implementation modalities, design, and projects are different.

What we need is an adaptation strategy cognizant of the African context that is structured and practical.

So in global climate finance, a specific resource for the adaptability finance segment is crucial.

One of the agendas expected at the COP27 is the issue of banning the extraction of fossil fuels. What is your reflection on this, as Africa is just beginning to extract its fuel resources?

It is still a conversation at this early stage. The global conversation at the climate conference is very cognizant of Africa’s concerns. When we say green energy, it is a gradual transition. You do not go from fossil fuel to green energy in one day. There has to be a gradual transition. Substitution for fossil fuel is in the long run. This plan must also capitalize on technology.

Do not forget that fossil fuel is a natural endowment for these countries. How do you tell countries like Angola, Nigeria, or others to go from burning fuel to 100 percent green? We need to clarify that. I do not think the global system is going to put a gun to your head. It is about placing attractive incentives in place, and support mechanisms, to make that gradual transition.

For African countries, they are not under any legal obligation to make that transition. There has to be an incentive and encouragement for it.

The decision made 13 years ago to commit USD 100 billion to Africa’s climate response remains a pledge. Now we expect more pledges at the conference. Why do we always believe in pledges that will not materialize?

The way global diplomacy works is that we must always agree to move forward. So there is an agreement in principle that USD 100 billion a year comes from developed countries. That is one side of the coin. The other question is, do they really actually deliver? Some countries did, and many did not. COP27 is expected to urge these countries to push for these pledges to be met.

Is there any mandatory legal framework or convention to make countries fulfill their financial obligations as per their contribution to GHG emissions?

Climate diplomacy does not work as expected. Probably global trade and other sectors based on international laws. But for climate issues, you need to reach consensus. Most of the time, you are not going to find a situation where there is a legal penalty. It is not an annual contribution and “if you do not pay, you go to jail.” There is no climate court. Countries must understand the value of those resources and their contribution to climate value.

Do you think the world needs green politics like in the 1980s and 1990s, or do you think the current climate crisis can be solved under the conventional mainstream political systems?

First, to be honest, we have made progress since. It might not be on the scale we anticipate. But we have made enormous progress by bringing people around the table. The fact that we are having conferences for parties to discuss climate is a good sign. Maybe developed countries might say “we pledged USD 100 billion for Africa annually. We managed 80 billion,” and they might promise to improve it.

That is why I call it a fragile win. It is not a complete win. But it is still a win.

Do we need something radical? The answer is no. We would not get that. Because global diplomacy does not work around radicalism, it works around building consensus on the solution and the way forward. Then some countries may be part of the solution. The bigger part of diplomacy is that the further you talk about problems, the more you can talk about solutions.

But for many African countries, that is not enough and you want to see results on the ground. That is still a work in progress. So we expect a progressive step forward at COP27.

You recommended in your research that “debt for climate swap” as an alternative climate financing method. Do you think that can work, as many African countries, including Ethiopia, have piled up external debt?

These are the innovative climate financing schemes we are talking about. During the 2008/9 financial crisis, a country not far from here, Seychelles, was affected, as a service-based industry was severely affected at the time by the crisis. The Seychelles was able to negotiate “a debt for nature” swap. So a certain portion of its external debt was swapped for natural protection.

Basically, instead of paying the external debts back, you are allowed to use the money to do projects and investments that sustain the environment. We can do that as well. There is also a resilient bond, which is doable.

African countries need to come up with different innovative financing schemes because the one that works in one might not work in the other.

The fundamental departure is, let’s go beyond concessional loans and grants. Let us bring in equities, risk-sharing facilities, and all the types of financial instruments. Debt for nature swaps are just one instrument. I really like this scheme, and I would love to see it work in other parts of Africa.

Currently, the Horn of Africa is being rocked by an elongated climate crisis.

The Horn of Africa issue is a very special case. This is a region where some of the scariest challenges of climate impacts are unfolding. This is also one of the most resilient regions. In the past, regions had to deal with drought every decade or so. But this time, the frequency has been very high. Yet, many governments, institutions, and even the private sector are rising to the task of dealing with the crisis.

But we must start planning for the long term. Our actions in the Horn region are always reactive. We always start doing things after a drought has struck. Early warning systems, productivity optimization, water harvesting systems, and other readiness are very important ahead of the next drought. Proactive adaptation investment is very important instead of the reactionary type of investment.

In the Horn, resources are mobilized every time drought comes around. Why is it that a lasting solution remains difficult? What kinds of projects are needed?

Some drought resilience programs and projects are underway. The AfDB is one of the largest donors of drought-resilient programs in the Horn region. What is important is that we must coordinate projects at different levels.

Many initiatives are done at scattered levels, and they are not coordinated. Most importantly, we must push for proactive investments. We need more focus and investment on development spending so we can reduce our humanitarian spending.

Governments keep saying “we do not have money” and suddenly, when a crisis happens, they find money. Why do not we find the money before the drought strikes? That could have saved a lot of lives and damage.

Drought can happen, but it must not leave a humanitarian crisis behind. There are countries that face drought all year round. But we have to find different ways to change things.

Most importantly, we need partnerships at different levels.

Sewagegn Chane is director of the Public Financial Institutions supervisory department at the Public Enterprise Holding and Administration (PEHA), which regulates state-owned enterprises. Sewagegn is currently responsible for directly supervising the Development Bank of Ethiopia (DBE) and the Liability and Asset Management Corporation (LAMC). The Commercial Bank of Ethiopia (CBE), Ethiopian Insurance Corporation (EIC), and the National Lottery were also under his supervision, until they are transferred to Ethiopian Investment Holding (EIH) past May.

Working in public financial institutions for 30 years, Sewagegn initiated the establishment of the stock market in Ethiopia, which is bearing fruit eleven years after the first feasibility study. He was also vocal and key in rescuing the DBE, initiating Ethiopia’s first reinsurance company, Takaful (Islamic insurance), among others.

Sewagegn is also researcher at i-Capital Institute and organizer of the East African Finance Summit. Currently, he is leading two teams formed at the institute, studying the establishment of an investment and agricultural development banks in Ethiopia. Although he has been advocating ending state protection over the financial sector for years, he has currently changed his mind, just as Prime Minister Abiy Ahmed (PhD) authorized a policy that envisages opening up Ethiopia’s financial sector to foreign competition. Sewagegn believes the banking sector should remain closed at least for the next few years. The Reporter’s Ashenafi Endale sat down with the public finance guru. The excerpts, does not necessarily reflect PEHA’s position.

The Reporter: What is the progress in reforming public financial institutions, which commenced after Abiy came to power?

Sewagegn Chane: The biggest reform we undertook is in the DBE. In 2018/19, the House of Peoples’ Representatives (HPR) decided DBE cannot continue as a financial institution and debated on how to dismantle it. That year, the bank reported 765 million birr loss so the HPR decided that the bank is not supporting itself, let alone the economy.

Myself, Haileyesus Bekele, the president at the time, and Yohannes Ayalew (PhD) DBE board president at the time, were called by the HPR to explain the issue. At that time, Public Finance Institutions Agency was a separate entity outside PEHA. The agency was led by Sintayehu Hailemichael (PhD) and I was the deputy director for operations. When some 36 SOEs were put under PEHA in 2018/19, the agency was included under PEHA, as a directorate.

The Budget and Finance Standing Committee at the Parliament insisted the DBE must be dismantled, because it was reporting a loss consecutively. The three of us were called to give our final comments on the committee’s decision. The committee was told that the fundamental problem of the bank was the lack of institutional independence.

Everybody was intervening in the bank, and it was unable to operate as a bank. The PM, other ministers, sectorial institutions, and even individuals have been meddling in DBE’s operation. Secondly, the bank gives loans but does not collect. Those who took DBE loans view it as the government’s budget, not as a client. Most of them had the “developmental investors” plate.

They take a loan and divert it to other businesses. Commercial farming in Gambella and Benishangul are good examples. I was in Gambllea for a year and half, to study why DBE’s loans failed there. There are so many rain-fed projects there. Particularly, six of those that took loans completely diverted the money to other businesses, instead of the commercial farming.

I stood before the standing committee, and pledged to give the DBE additional time. I told them if institutional freedom is restored, relationships with clients will be straightforward, and the bank’s loan collection capacity rebuilt, bringing DBE on track. So I asked the standing committee to give us just one year, and if we fail to rescue the bank in that year, then the committee can dismantle it.

Yohannes on his behalf explained how the IMF and the World Bank are happy to see the DBE dismantled because they do not want development banks in developing economies. He also elaborated how important a development bank is for Ethiopia. After a brief tea brake discussions, the standing committee announced it granted the one year time.

Immediately, we embarked on the reform agenda, introducing seven reform pillars. One of the biggest reform pillars was reducing DBE’s Non Performing Loans, which was over 40 percent at the time. If the bank cannot collect the loans, it cannot disburse loans the next time.

DBE’s NPL at the time was weighed in rain-fed agriculture and textile. So, we stopped any further loans for rain-fed agriculture. In textile, many foreign investors took loans in billions but did not pay, so we decided to take over all the projects that are not paying back their loans, and transferred them to other investors.

We also took the contract management of non-performing projects. For instance, the DBE took over the management of Elsi Addis, Etur and other textile factories, for the time being. Except Etur, most of these projects have been transferred to new investors, without reaching the foreclosure stage.

The major project left on our hands to date is Ayka Addis.

The other serious measurements we took were barring any officials from intervening in any loan appraisals and disbursement processes. Before the reform, orders for some loan approvals were given from the Office of the PM. Officials from the Industry, trade, agriculture, and many other ministries used to give such informal orders to the bank. Now, even the DBE board cannot involve in loan disbursement cases, except on strategic issues.

We managed to reduce DBE’s NPL to 30 percent this year, including Tigray loans. It is actually 17 percent, if loans in Tigray are excluded, which are affected by the war in northern Ethiopia. Profit comes from loan interest. If the loan is not collected, there can be no profit.

We managed to generate 1.2 million in 2019/20; just a year after the reform was launched. This year, the bank generated 3.9 billion birr in profit. If we did not put aside 4.1 billion birr provision for the Tigray loans, DBE’s profit this year could have been 7.8 billion birr. The DBE is rescued now and everybody is acting as a client now.

DBE’s source of finance is the guarantees from the Ministry of Finance and the National Bank of Ethiopia (NBE). The capital has increased from five million to one billion. The macroeconomic committee approved a study to allow new DBE bond, effective since January. This is apart from the GERD bond, which is the DBEs source of finance.

Before the reform, all the financial indicators of the bank were negative, and unhealthy. We completely reversed all of that, except for the NPL. Before the reform, there were only expenses and disbursement, but now there is income.

Out of the 31 strategic measurements we stipulated under the seven reform pillars, 21 are aggressively implemented and ten are in the process. Only one measurement has not started, which is the digital technology and modernization initiative.

The PEHA and DBE’s board has contributed for the success of DBEs management. One of the positive factors is the steel-serious discipline of Tegegnework Getu (PhD), the board chair of DBE. As a board chair, he is opaque to any external influence or favor. He never took stipends and incentives allocated for board chairs annually. Even he uses his own car for DBE activities.

Yohannes was the chief economist at the NBE for a long time. How did you believe in him, that he could rescue the bank?

Under past presidents, the bank had many deviations and exceptions. Instead of going through loan approval and disbursement procedures, loan seekers directly contact the president and get the loans, informally.

For instance, after we banned DBE loans for rain-fed agriculture in 2018/19, the bank gave 120 million for rain-fed agriculture project. The president at the time said he was forced because certain officials at the Ministry of Agriculture managed to give the order via the Office of the PM.

Surprisingly, the board chair does not know about the loan. The bank was bleeding. We had to be brutal to stop the bleeding. Most of the bad loans were given during Isayas Bahre’s time. Both Haileyesus and Getahun Nana were unable to save the bank. Our biggest worry was that Yohannes might decline the role to lead the DBE.

Over 200 large scale agricultural projects, and a number of foreign textile investors took loans from the bank and failed to pay. Are you pursuing them legally?

We are trying to acquire the lands currently. Our biggest problem now is with the regional governments of Benishangul and Gambella. The land is the key asset the investors provide as collateral to take the loan from the bank.

After the investors fled without paying the loans they took, the DBE has to acquire the lands, since it is the collateral. Once we finalize acquiring the lands, we will transfer it to other investors. Then we will recover the previous loans.

I heard the Benishangul and Gambella regional governments are demanding it pays taxes on the lands?

We reached agreements on some of the lands in Benishangul. There are ongoing debates on the amount. The bank agreed to pay the tax, if it agreed on the amount. The regional governments usually give one plot for multiple investors, so one certificate is given to multiple investors. The regional agriculture bureau has been reporting to us that the lands were being cultivated by the investors, which was false.

In general, rain-fed agriculture and textile investments have bled DBE.

For instance, Ayka Addis’s investor used informal channels to get the loans, instead of going directly through the bank. It either goes through the PMO or other officials. Solving all this was not simple.

Most of DBE’s clients were unruly. They had the right to take the loan, and the right not to pay. So we disciplined the clients first, and reversed the bank’s practice of negligence. All this was done in three years.

How much is the land leased for the rain-fed projects?

The rate depends on the regions. Basically, tax, lease and anything related to the land is handled by the investors. But since the investors went bankrupt, and the DBE took the lands, now the bank has to pay them. This is the reason why the regional states are asking DBE for the taxes, because it is under the bank now.

The investors who took the land in regional states for commercial farming, left, and the tax holiday period is over. So regional states are now claiming the taxes and the DBE agreed to pay. This is the game.

Did the Gambella commercial farms failed by design?

The loan was supported by policy. The policy of initiating commercial farming and modernizing the agriculture was not wrong. So the DBE prepared policy and procedures.

The major factor for the failure at that point, was the decision to give loans for rain-fed agriculture. This was a mistake because the investors knew the loopholes and abused the loans and failed to return it.

The DBE is on the right track now but business continuity is more critical.

What are DBE’s sources of funds, after the NBE’s 27 percent T-bill is replenished?

The NBE introduced another bond this year, in which banks channel one percent of their loan portfolio to the DBE. In the past six months, a bit more than 10 billion birr has been channeled to the bank from this new scheme. Once we start from insurances, these two schemes will become our biggest source of funds.

The GERD bond and loans from international banks also generate finance. It also accesses external funds like SME loans, through the MoF. DBE’s T-bill is almost zero currently.

How much is the loan interest the DBE is paying currently, when will the rest mature?

The DBE pays interests by adding two percent on the saving interest, which means nine percent. On the other hand, DBE’s interest rate is between 11 percent and 12 percent, the least being for import substituting projects. The margin covers its administrative cost. So the bank is able to pay all its interests duly.

DBE requested to put Tigray NPL’s off its balance sheet. But NBE officials told The Reporter that it is not going to take it off its balance sheet.

If Tigray’s NPL is put-off DBE’s balance sheet, DBE’s NPL could be 12.5 percent. But including the Tigray NPL, which is 10 billion birr, the NPL stands at 30.4 percent. What we are saying is this 10 billion birr in NPL happened by factors out of DBE’s control. We are not asking the NBE to cancel the Tigray loan.

We undertook a detailed study on how the NPLs could be taken off the balance sheet, and presented to the NBE. We do not know why NBE is silent on the issue. The CBE also requested the NBE to take off two billion birr off CBE’s balance sheet. This was also studied and presented to the NBE.

The NBE first said the request should be processed by the Bankers Association but the issue is still in the process. It is illogical to keep inactive numbers on banks’ balance sheet. When unrest occurred in Oromia over the past few years, the NBE allowed loans of affected investors in the region to stay off banks’ balance sheet. The same can be done for Tigray. It is not a big deal. It is NBE’s decision but I do not know why it is reluctant when it comes to Tigray NPLs. Tigray NPL does not represent DBE’s actual performance, which is outstanding.

DBE’s outstanding loan is 63.4 billion birr. Total NPLs stood at 19 billion, of which 10.1 billion birr is created in Tigray since the war. The president of DBE requested to exclude the Tigray NPL but PEHA does not agree, unless the NBE approves it.

Another investor is negotiating to buy Ayka Addis. Will this be the last negotiation?

A number of potential buyers have been trying to buy Ayka Addis in the past but failed. Especially a Chinese investor was very eager to acquire Ayka Addis. Any potential buyer is expected to contribute 50 percent of Ayka Addis’s portfolio. For instance, the initial investment loan was USD 1.7 billion so the buyer is expected to contribute half of it. But the Chinese lacked capital so it requested to contribute only 10 percent of it, which means around USD 200 million, so we refused because we cannot breach the 50 percent law.

If Ayka Addis is sold, DBE’s NPL will drop to around 15 percent, from the current 30.4 percent. Ayka Addis is holding a huge loan. The principal loan is 1.7 billion, a decade ago. Including the interest, probably it is around USD three billion by now. The value of the machines, factory building, raw materials when the DBE received Ayka Addis, is valued at USD 1.79 billion.

By the way, we are still paying the salary of 4,500 employees of Ayka Addis, though it has not operated for years now. It is between 13 million birr and 14 million birr every month. We cannot abandon the employees, after the Turkish investor left. We are carrying all this cost.

There were also other alternatives for Ayka Addis, other than selling it.

There were three major options tabled. The first is selling to a capable investor or buyer. The second is operating Ayka Addis under a management contract, just like Elsi Addis and the third was repurposing Ayka Addis into an Industrial Park. Some three potential investors have been negotiating. The Chinese came last.

Currently, another negotiation is underway. We hope this will be the last one. It is a consortium of local and foreign investors. We will disclose it when it materializes. Ayka Addis’s operation ranges from cultivating cotton to sewing the clothes. It pins the cotton, dyes it, and makes the clothes. It is an end-to-end project. So the potential buyer is expected to specialize in all these value chains.

Will the new buyer pay Ayka Addis’s accumulated tax?

Under Ethiopia’s law, a company does not pay taxes if it declares bankruptcy. After the DBE took over Ayka Addis, the tax authorities are saying Ayka Addis must pay tax, since it did not undergo liquidation. Ayka Addis was not operating for the past eleven years. So, the tax authority is asking for back-taxes for all these years, stating the project did not declare liquidation. So we are arguing with the tax authority.

But the DBE declared foreclosure?

When the Turkish investors left and the DBE started managing Ayka Addis, the tax authority started asking for tax.

Amazingly, Bmet cables, one of the Turkish investments abandoned after taking huge loan from the bank is a good example of how much Turkish investor’s exploited us. Under the Turkish investor, Bmet cables utilized 40 percent of operational capacity but they were not paying their loan.

Now, the local buyer, Tadesse Admasu of Red Star Trading, is operating at 12 percent of its capacity due to different reasons. The buyer acquired Bmet paying 890 million birr. Now, it has paid all the loans owed to Bmet.

How much has Ethiopia lost because Turkish investors left the country without paying DBE loans?

Before, their equity contribution was 30 percent. This means the DBE contributes 70 percent of the investment. Under the previous ratio, a Foreign Direct Investment comes with USD 30 million, and takes 70 million. The foreign investors left without paying the 70 percent loan they took from the DBE. But now, we adjusted the equity contribution to fifty percent, for foreign investors. Local investors pay 20 percent.

FDI is needed to bring technology, capital, forex, and create jobs. It did not meet any of these targets.

One of the other loopholes FDIs has been exploiting is that they highly under invoice export price. They usually have subsidiaries or a mother company operating abroad. So they export the clothes to them, with fake price documents. These investors also import raw materials only from those mother companies or subsidiaries abroad. The FDIs operating in Ethiopia do not want to use local inputs. They export t-shirts with USD 60 cents from Ethiopia. But the buyer abroad, which is affiliated to the FDI, resells it at a much higher price. So the FDIs generate meager forex for Ethiopia. Their bank statements also indicate loss, always. Especially the expats brought by FDI are highly abusive. Bmet’s former CEO has been paid 500,000 birr in salary monthly. This is excluding housing, vehicle and other accommodations. Now we decided to reduce expats inflow.

That is why, just when we started being strict on Ayka Addis that the Turkish investor’s fled Ethiopia immediately, without handing over the project’s properly. I think they left for Burkina Faso.

Are there new public financial institutions planned to be established, particularly to finance long term development projects?

Four years ago when the bank was in deep trouble, we conducted a study to determine its fate. One of our alternative recommendations in the study was to breakdown DBE into three different policy banks; into an industry bank, agricultural bank and an SME bank. Finally, a decision to reorganize and reform DBE as it is was made. In the meantime, we conducted a study to renovate the bank; the ATA was also making moves to initiate the establishment of an agricultural bank.

The initiative to establish a stock market was also conducted by us. We have been trying to convince the government to establish a stock market for the past eight years. It is only realized under Abiy.

Now, the importance of an independent agricultural bank and investment banks is imperative for Ethiopia. In line with the agricultural bank, agricultural insurance and micro-insurance firms are necessitated equally. These firms protect the loans provided by the agricultural bank to farmers.

We conducted the “Proposal of restructuring public banks” in 2014. The proposal included the recommendation to determine the fate of the former Construction and Business bank (CBB). We did not just demolish CBB without a proper study.

The same studies have later been modified for the DBE. The modified study also recommended the vitality of Agricultural Development Bank, and mortgage bank (construction bank). The plan is for the CBE to stop mortgage financing, and transfer the role to the new Construction Bank (CB). In fact, the proposed CB partly takes on the role of the now defunct CBB.

Currently, we have established two working groups at i-Capital Institute, studying on investment bank and the agricultural development bank each. PEHA has the mandate to give birth to new public enterprises, apart from managing the existing ones. It can also decide on mergers, and dismantling of SOEs.

As long as Ethiopia is progressing from an agrarian economy to manufacturing, a stock market is very essential. If we need more robust manufacturing companies, we must build a robust stock market, where the companies are listed, float shares, and mobilize capital. A manufacturing industry cannot grow without a stock market.

The banking sector fears to give loans to manufacturing industries because the banks fear losing their saving capital. Once the stock market is active, the interest in banks will drop. But the stock market will grow faster, hand in hand with manufacturing.

I hope the establishment of an agricultural bank is realized soon. Ethiopia has an agrarian economy. But the economy is currently distorted, as the service sector constitutes the largest portion of the GDP. In a bid to transform Ethiopia’s economy from an agricultural to a manufacturing industry, agricultural development bank cannot be an alternative. Agriculture is not developing due to lack of finance, fundamentally.

The agricultural bank also needs an insurance firm, to cover the risks of the loans. The bank finances tractors for the farmer, and then the insurance firm insures the machines as well as the harvest. It is highly imperative that agricultural development bank and investment banks are essential for this country.

A secondary market cannot operate without an investment bank. Since we are nearing the establishment of a stock market, we also need to establish an investment bank.

For instance, banks are planned to be listed on the stock market. The investment banks will study the banks, as well as other IPOs, inside out. So, the investment banks determine the exact value of shares, and securities. This means IPOs, including commercial banks, cannot determine the price of their shares by themselves, unlike now.

The underwriter preserves the interest of every stakeholder, investor, IPOs, and others. It sets standard but the investment bank cannot be listed on the stock market itself.

Once the two working groups wrap up their studies, the documents will be reviewed by stakeholders. Then, we will present the final documents to the government to decide on whether to drop or implement the study’s recommendations.

A few years back, we travelled to Nigeria to visit their central bank and development bank and took three months of training. I was amazed by their Islamic insurance. We extracted lessons and brought it to Ethiopia.

The government is saying the banking industry will be opened for foreign competition very soon. What is your take on this?

Before, we have been asking the government to open the banking industry. But recently, we have changed our perspective. We prefer the government to delay the opening up for now. I precisely know the exact capacity of each local banking institution.

Before, our assumption was that local banks will merge, at the face of an open up. So we have been advocating for it to open, at each meeting and financial summits.

Basically, banking and insurance businesses in Ethiopia is a captive business. The banks are formed either under religious, ethnic, political sentiments or other bands. So, Ethiopian banks and insurance companies lack the business mentality. If they had a business mentality, they will work with anyone who has a viable business idea. So I believe the government must delay the sectors opening up.

The NBE recently said mandatory merger and acquisitions will be forced on local banks, when the sector is opened up.

That is inevitable once the industry is opened up. Of course mergers can happen even before the opening up. For instance, the NBE raised the paid up capital to five billion. Those who failed to meet will have no option but merge. The NBE can also raise the reserve let’s say to 25 percent, from the 10 percent currently. Many banks could have merged. This way, competitive banks could be created.

Western banks, especially Europeans, strongly pushed Malaysia, Korea, South Korea, and Thailand to open up their financial sector. Once these Asian countries opened their financial industries, the western banks withdrew after joining the sector. The Asian economies were hit by financial crisis as a result.

But eventually the Asian tigers avenged the western banks. The 2007 financial crisis hit western banks, because the Asian tigers suddenly raised their banking capital. They intentionally gave more loans to American banks. Then the American and European banks disbursed those loans to mortgage, and small businesses. The western banks failed to pay their loans to the Asian tigers, taking revenge twenty years after the western banks played foul.

We do not need such turf wars.

The only reason Ethiopia’s economy is doing well after the war in the past two years, is because our financial industry is closed off. Our economy survived because the banking sector is not open.

If banking was opened to foreign competition, the economy could collapse, under this war. And had it been opened before the war, the economy would have collapsed by now. Foreign banks simply close and leave, when there is a war.

Many people say the banking industry should be opened. That is wrong. They do not know the exact capacity of local banks in surviving foreign competition. I have no confidence even in the CBE.

The CBE has a huge NPL owed by the government. The government owes over half a trillion birr. Unless it is fully paid, CBE will face many challenges.

So, I insist the banking industry should not be opened at least in the next three to four years. Local banks need up to four years to prepare. Mandatory merger is simple.

When the Home Grown Economic Reform was launched in 2019, the government promised to reduce the states hand in the economy, and reduce the pressure on CBE and domestic credit. Is there any progress?

The CBE is not giving loans to the government now. State pressure is reduced. The CBE has studied new organizational structure, and is implementing new business strategies. Before, especially during the previous regime, state banks give loans as if it is a budget. They do not collect the loan.

Do you follow up on CBE’s branches abroad?

We evaluate them during reporting. The bank has branches in Juba and Djibouti. The Juba branch is performing very well but the Khartoum branch was suspended while in the pipeline.

Did the CBE move from PEHA’s supervision, after it is placed under the EIH?

Currently, the CBE is in transition process, from PEHA to the EIH.

I heard SOEs will be categorized under three supervisory institutions according to their performance. These are the EIH, PEHA, and the LAMC. Is that true?

What I know is that there are SOEs going to the EIH, and the rest will remain under PEHA. The LAMC by itself is an SOE and is under PEHA’s supervisory. LAMC is under my supervision. The CBE, DBE, EIH, LAMC and national lottery, are under my directorate.

The EIH has recently on-boarded 27 SOEs, out of the 36 SOEs under PEHA. Does that mean they are completely out of PEHA?

The investment part of SOEs goes to the EIH, while the enterprise management aspect remains under PEHA. But so far, there is no definite decision on whether the selected SOEs completely move to the EIH, or partially. This is decided by the macroeconomic team of the PM.

Will all SOEs be listed on the stock market?

The plan was for the SOEs to list a certain percent of their value on the stock market. If SOEs like ET, ethio telecom and others trade 10 percent of their portion on the stock market, it builds the public’s confidence. But SOEs must meet stringent financial reporting systems.

I also hear that five percent of ethio telecom’s share will be sold on the stock market. SOEs that meet the right financial reporting system will be able to float shares on the stock market.

People are facing difficulties acquiring houses because real estate companies collect money from house seekers and disappear. The stock market will also solve this. Everything will take shape under the secondary market.

The government is allowing the establishment of new banks in the last two years. But lately it confirmed the opening up of the banking sector for foreigners. Isn’t this sending mixed signal?

Mergers can be done at any time. Then local banks can consolidate and ready for competition. PEHA is exemplary in merging CBB with the CBE six years ago. Private Banks must follow suit.

Local banks are in a comfort zone, registering lump profit, not because they are providing a class service. They are profiting because they are protected. Under state protection, they do not have to improve service. They survive at the expense of the client. Millions are saving in bank but only a few thousand get loans. All of this will change, once foreign banks come.

To allow foreign banks, the banking proclamation, banking service code and the investment regulations must be revised. Especially, the code must allow banking for foreigners. The existing commercial code allows banking and insurance only for Ethiopians. Non Ethiopians cannot be investors, or operators.

Do you think the financial sector will be opened before five years?

I think so but I prefer it being delayed. All banks are giving loans to the service sector. Manufacturing and agriculture cannot grow unless we have banks that can give loans for long term projects. There are no consumer loans too.

Insurance companies complained over NBE’s order to direct 15 percent of their profit to DBE bond.

The rate has been reduced lately and the insurance companies agreed.

ሪፖርተር ቆይታ

ምን እየሰሩ ነው?

‹‹ኅብረተሰቡ አስፈሪ ብሎ የፈረጃቸውን ልጆች በመደገፍ ውጤታማ መሆን እንደሚችሉ...

November 9, 2022 0

የብለ ብሎ ሩዥ ፋውንዴሽን (ቢቢአር ኤፍ) በሕጋዊ መንገድ ከመመዝገቡ ከአራት ዓመታት በፊት አገልግሎት የሚሰጡት በበጎ ፈቃደኝነት ነበር፡፡ ለውባንቺ ፕሮጀክት መከፈት ምክንያት የሆነውም እነሱ በበጎ...

‹‹ኢትዮጵያ ግብፅን የምታይበትና ግብፅ ኢትዮጵያን የምታይበት ሁኔታ ይለያያል›› ...

November 6, 2022 0

በቀጣናዊ ትስስርና በኃይድሮ ፖለቲክስ ላይ ባላቸው ጥልቅ ዕውቀትና ልምድ፣ እንዲሁም በአዲስ አበባ ዩኒቨርሲቲ ለረዥም ጊዜ የፖለቲካ ሳይንስ በማስተማር ይታወቃሉ፡፡ ከአስተማሪነት ባሻገር በዩኒቨርሲቲው ለረዥም ጊዜያት...

ምን እየሰሩ ነው?

ብቁ የሆነ የሰው ሀብት ፍለጋ ወዴት እያመራ ነው?

November 2, 2022 0

አሁን ካለንበት እውነታ አንፃር ዓለማችን በአብላጫው የምትመራው ዕውቀትንና ክህሎትን መሠረት ባደረጉ አሠራሮች መሆኑ ይታወቃል፡፡ እየመጣ ያለው አራተኛው የኢንዱስትሪ አብዮትም ዕውቀትንና ክህሎትን መሠረት በማድረግ በሚፈጠሩ...

Ethiopian Reporter Political News

Officials at the Ministry of Agriculture are worried about the global fertilizer scarcity as the nation becomes unable to endure the increase in the price of the agriculture input owing to the conflict between the Ukraine and Russia.

The global fertilizer crunch continued as the country sees a growth in demand for fertilizer due to expansion of irrigation farms and new agriculture projects that prompt farmers to increasingly shift to artificial fertilizer with subsidized price.

“Demand is growing substantially as Meher farms expand and irrigation activities surges across the country,” said Umar Hussein, the Minister of Agriculture, in an event held at Skylight Hotel to honor stakeholders who have been involved in the timely delivery and distribution of fertilizer.

Last year, the price of fertilizer more than doubled in the international market, a situation that have bulged Ethiopia’s annual budget for the commodity from USD 600 million to USD 1.2 billion.

“The last year has been very challenging due to forex shortage and security concerns that have affected distribution,” Umar said.

This week, the World Bank warned that there would a further increase in price of fertilizer, with the rapid increase in gas prices turning into an increase in the cost of the commodity.

“The challenge is meeting the immediate demand for fertilizers to support next season’s crops. Current projections suggest that Africa’s unmet demand could reach four million metric tons this year, with West Africa facing the most acute challenges this growing season,” said World Bank Group President, David Malpass, during the opening of the 77th session of the UN General Assembly (UNGA 77) on Tuesday, 13 September 2022.

Last year, the Ministry had to float a tender more than twice as suppliers failed to fulfill contracts due to the global fertilizer crisis, which was first caused by the coronavirus pandemic and then worsened by the war between Russia and Ukraine, which supply over 50 percent of inputs needed to produce urea.

“Taking a lesson from last year, we are in contact with potential suppliers to avoid delays. Invitations have been already made,” said Sophia Kassa (PhD), State Minister for Investment and Input Sector at the ministry, told The Reporter.

During the last fiscal year, almost 13 million quintals of fertilizer was supplied by Fertiglobe, one of the largest producers of the nitrogen fertilizer in the Middle East, and Morroco OCP, a renowned supplier in Ethiopia, where it is currently building a fertilizer plant in partnership with the government.

The government expended a total of 64.5 billion birr for the procurement, shipment and distribution of fertilizer last year. It accounts for 11.4 percent of the budget during the same period.

The government had to allocate another 15 billion birr in subsidy as farmers become unable to withstand the surge in price of fertilize quadrupled in the local market.

Three directives on broadcast media go operational effective this month

The Ethiopian Media Authority enacts three directives to regulate the public, community, and commercial broadcast media. They are part of the eight directives the Authority has been issuing since the ratification of the media proclamation in April 2021.

To be applicable beginning this month, the directives list the rights and responsibilities, and how licenses are granted for the public, community, and commercial broadcasting media. The directives rule on how television and radio media should conduct their reports during national occasions like elections.

Lists of administrative measures by the Authority as well as legal actions have also been stated. Beginning from warnings to suspension of licenses and legal actions, several measures would follow should the media houses engage in illegal activities.

One of the actions, as it was the practice before, was to prohibit the dissemination of a program considered to be a danger to national security before going public on any of the broadcast media.

On the issue of impounding and injunctions, article 45 of the proclamation states that prosecutors might request a court order to stop publication of the programs. In the event of an emergency, the broadcast of the programs will be called off with the order of the Ministry of Justice. This should be notified to the court of law within 48 hours.

The Authority also prepared and approved several other directives to govern the media landscape in Ethiopia. These include directives for religious broadcasting services, online media, and print media.

Following the approval of the religion broadcasting service directive, which forced the registration of religious-based media, several of them have been registered.

Among the 46 media outlets that started the process and are working with the Authority to finalize registration, 23 have received their licenses, according to Dessie Kefale, communications director at the Authority.

“There was a deadline on which all had begun the registration process. Some of them were already operational for a long time, of course,” he said.

Before the ratification of the proclamation, as Dessie explained, there had not been adequate legal frameworks for all kinds of media houses.

All the directives and regulations before last year’s proclamation were based on the Mass Media and Access to Information issued in 2008, and Broadcasting Service Proclamations issued a year before that.

“There are several other laws under discussion and preparation, which includes a directive on hate speech and misinformation,” Dessie told The Reporter.

It is the “largest pandemic fraud” in the US

Ethiopians are among 47 people who have been charged in connection with a fraud scheme in the US involving Feeding Our Future. The alleged fraud is said to be the largest pandemic fraud in the country, involving USD 250 million.

The defendants are charged across six separate indictments with charges of conspiracy, wire fraud, money laundering, and bribery. The defendants are suspected of creating dozens of shell companies to enroll in the program as Federal Child Nutrition Program sites, while allegedly creating shell companies to receive and launder the proceeds of their fraudulent scheme.

The defendants submitted false invoices purporting to document the purchase of food to be served to children at the sites and submitted fake attendance rosters purporting to list the names and ages of the children receiving meals at the sites each day, according to the US Department of Justice.

“These indictments, alleging the largest pandemic relief fraud scheme charged to date, underscore the Department of Justice’s sustained commitment to combating pandemic fraud and holding accountable those who perpetrate it,” said Attorney General Merrick B. Garland. “In partnership with agencies across the government, the Justice Department will continue to bring to justice those who have exploited the pandemic for personal gain and stolen from American taxpayers.”

Feeding Our Future’s founder and executive director, Aimee Bock, was among those indicted. She is charged with conspiracy to commit wire fraud, conspiracy to commit federal program bribery, and federal program bribery. She oversaw the USD 240 million fraud scheme carried out by sites under Feeding Our Future’s sponsorship, according to the US Department of Attorney.

An Ethiopian born Abdikerm Abdelahi Eidleh, 39, of Burnsville, Minnesota, is charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit federal program bribery, and money laundering. Eidleh was an employee of Feeding Our Future who solicited and allegedly received bribes and kickbacks from individuals and sites under the sponsorship of Feeding Our Future. Eidleh also created his own alleged fraudulent sites.

Ethiopian born-US nationals, Bekam Addissu, 39, Hadith Yusuf, 34, and Hanna Marekegn, 40, are each charged with one count of conspiracy to commit wire fraud. Another six siblings who are originally from Ethiopia have also been charged with wire fraud, federal programs bribery, conspiracy to commit money laundering, and money laundering.

Another Ethiopian-born US national, Liban Yasin Alishire, 42, the president and owner of Community Enhancement Services Inc., a company located in the JigJiga Business Center in Minneapolis, is charged with receiving more than USD 1.6 million in fraudulent Federal Child Nutrition Program funds. Ahmed Yasin and Khedir Jigre have also been charged with conspiracy to commit wire fraud and money laundering in the same center. These three defendants have been accused of buying properties, including beach property, in Kenya.

Another defendant with links to Kenya, Salim Ahmed Said, 33, of Plymouth, Minnesota, is charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit federal program bribery, federal program bribery, conspiracy to commit money laundering, and money laundering. Said was the owner and operator of Safari Restaurant, a site that received more than USD 16 million in fraudulent Federal Child Nutrition Program funds, the US Department of Justice said.

“An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law,” the department said.

A startling revelation regarding the war in northern Ethiopia was announced last week by the International Commission of Human Rights Experts on Ethiopia, an independent organization tasked by the UN Human Rights Council with conducting a thorough and impartial investigation in Ethiopia. The stern warning emerged after the organization released a study that stated there are reasonable grounds to believe that parties to the conflict had violated and/or abused human rights since combat began in November 2020.

It was a report that not only angered federal government officials but also countries and experts that had already questioned the mission and real interests of the recently formed committee of experts.

“The report of the commission is prepared in defiance of the UN best practice guidelines such as professional independence, impartiality, and standard of proof,” said Tadesse Kassa (PhD), secretariat of the inter-ministerial taskforce that was formed by Prime Minister Abiy Ahmed, slamming the UN Commission of Human Rights Experts report of human rights violations in the northern Ethiopia war.

At a press conference held on September 21, 2022, he referred to the Commission’s initial report, which was created with only two full-time human rights investigators and remote interviews, as nothing more than mediocre. At the press conference, the Ministry of Justice unveiled the task force’s first phase report, which was prepared by 158 experts deployed in the conflict-affected Amhara and Afar regions.

In its first phase investigation report, which covers violations committed by the Tigray People’s Liberation Front (TPLF), the inter-ministerial taskforce (IMTF), formed to implement the recommendations of a joint investigation by the Ethiopian Human Rights Commission (EHRC) and the UN Office of the High Commissioner for Human Rights (OHCHR), presented its findings.

The Task Force found reasonable grounds to believe the commission’s findings that there were 2212 rapes, 2831 extrajudicial executions of civilians, and other violations during the war. According to its 46-page report, the team came to this conclusion after analyzing the testimonies of 10,000 witnesses and analyzing thousands of videos and material evidence.

For Tadesse, who has been monitoring the task force’s research and report-writing process, the UN Commission of Human Rights Experts’ report on Ethiopia is only a “snippet” of the full extent of the damage that has been inflicted throughout all three regions.

“The report’s conclusions are presented on the basis of either no evidence or evidence whose credibility is highly questionable,” the secretariat told the room full of reporters questioning the report in regard to its standard of proof and data collection. Tadesse even went on to call the report “a political statement” that was prepared to “help implement” the agendas of “some forces.”

This week, the commission accused all combatants in the conflict of committing various human rights crimes. In order to reach the conclusion that there are “reasonable grounds” to suspect that the offenses amounted to war crimes and crimes against humanity, the Commission listed incidents that it employed as a basis.

The selected incidents were the shelling of Mekelle and attacks on civilians and civilian objects; killings in Kobo and Chenna; and a drone strike on an Internally Displaced Persons (IDP) camp in Dedebit. Rape and sexual violence, and denial and obstruction of humanitarian access were also selected themes for the investigation.

The commission’s two-month investigation into selected incidents and themes found “reasonable grounds” to believe the Ethiopian National Defense Force (ENDF), Tigray forces, and Eritrean Defense Force (EDF) committed war crimes, according to the report. In this case, the report accused the ENDF of using “starvation of civilians as a method of warfare.”

It further stated that it found “reasonable grounds” to believe extrajudicial killings, rapes, and sexual violence were committed by ENDF members “as part of a widespread attack” directed against “the civilian population of Tigray.”

The accusations were part of a joint investigation by the Ethiopian Human Rights Commission (EHRC) and the UN Office of the High Commissioner for Human Rights (OHCHR) that was adopted by the federal government.

The federal government, on the other hand, blasted the commission’s report, adding that it had opposed its formation from the start. It described the report as “substandard quality” and its allegations as “unsubstantiated.”

“It makes grave accusations against the government and its armed forces without offering proof, just based on telephone conversations and web-based submissions. This is irresponsible,” Zenebe Kebede (Amb.), the Permanent Representative of Ethiopia, told Federico Villegas, Human Rights Council president, at the Interactive Dialogue with the commission on September 22, 2022, in Geneva, Switzerland.

As the commission was not allowed to go to the war-affected areas of northern Ethiopia to investigate by the federal government, all the 185 interviews with victims, survivors, witnesses, and other key interlocutors were conducted remotely, it said. Even the governments of Sudan and Djibouti haven’t granted the Commission access to interview Ethiopian refugees within their borders.

Authorities in Benishangul Gumuz Region are preparing a conflict recovery project that would need a 38.5 billion birr budget to be implemented. It is an initiative that arose as the security situation improving.

The plan is expected to be implemented in five years in three phases, with execution scheduled to begin next month.

The region’s sectoral bureaus will start adapting the plan and mobilizing resources based on their needs. The region is drafting a directive that will guide resource mobilization.

The required budget for the recovery plan is nearly six times the region’s 6.7 billion birr budget for the 2022/23 fiscal year.

“Non-governmental organizations and UN agencies have already expressed their interest in supporting the initiative,” Tarekegn Tasisa, the region’s disaster risk management commissioner, said.

The recovery and rehabilitation project, based on a study prepared by the region’s disaster risk management commission, will be implemented in the region’s 17 districts in the Metekel, Kamashi, and Asosa zones. The plan outlined a list of main activities that would be carried out in six sectors, including disaster risk management, agriculture and natural resources, health protection, and education.

The study for the plan was conducted using the regional government’s root-level apparatus. They have identified the extent of the damage, and the commission compiled it, according to the Tarekegn.

Besides the study carried out by the commission, another study is also being prepared led by Assosa University. The university’s study estimated that the region sustained 79.4 billion birr damage due to the conflicts in the past years.

The conflict has resulted in the loss of 16 million quintals of crop, valued at 44 billion birr, according to the study.

“The university’s study has already been presented to the regional government, but it’s not finalized yet. That’s why we are using what we studied. Ours is already ratified by the recovery steering committee,” the commissioner said.

Officials say the security situation in the region is improving now. The number of civilians killed in the past five months is at its lowest.

The region has been a place of horrific civilian killings and conflicts between government security forces and Gumuz rebels since 2019. While the Metekel and Kamashi zones are the main fighting grounds for the rebels, Metekel zone has seen killings targeted at ethnic Amharas.

Even though the region is rich in gold and coal mining resources, investors are not able to mine the reserves, especially in the Kamashi zone. The region ranked second in the country in terms of gold production, with artisans producing more than 90 percent of the region’s gold.

475,384 residents are displaced from their villages due to the insecurity in the region, of which 77,500 are children under the age of five, and 20,000 are breastfeeding mothers, according to the conflict impact assessment. The conflict is also a reason for the destruction of 43,640 houses.

The region, which has been witnessing conflict and the killing of innocent people in various places, saw 113,000 students are out of school due to instability. The destruction of schools has created a difficult situation for students to return to school. In the conflict-affected areas of the region, 201 schools were completely destroyed and 86 schools suffered partial damage.

The region’s 142 health facilities, including 126 health posts, have also sustained damage due to conflicts.

Benishangul Gumuz, which provides agricultural land to investors who engage in large scale farms, has had its 109 agricultural institutions’ warehouses looted and partially or completely destroyed.

The study showed that 291 farmer training institutes and 140 animal health facilities met the same fate.

The recovery and rehabilitation plan has prioritized the implementation of the return of internally displaced people and the rehabilitation of those people in their former homes in a sustainable manner. It also focuses on rebuilding social and economic institutions and providing the necessary equipment for the institutions.

The project need assessment showed that 38.5 billion birr will be needed to implement the plan in disaster risk management, agriculture and natural resources, health protection, education, water irrigation and energy resource development, women, children, and youth sectors, as well as peace building and security sectors.

“The cost of the recovery budget is so much higher than the region’s capacity. But we are planning to mobilize resources from diaspora communities that are from the region,” Tarekegn stated.

Funds from donors including the federal government and the World Bank recovery project are expected to be part of this project.

The Benishangul Gumuz region is one of the six regions, including Tigray, Amhara, and Afar, where rehabilitation project was launched by the federal government together with the World Bank this year. In May 2022, the bank signed a USD 300 million grant to assist the reconstruction, and the federal government has allocated 20 billion birr in the current fiscal year for reconstruction.

In areas that have security threats, the project will be implemented by a third party. The Ministry of Finance has delegated United Nations Office for Project Services (UNOPS) to implement the reconstruction in the Tigray region.

The Ministers of Health and Education studied the damage in all six regions and prepared a report detailing the cost of the five-year reconstruction project.

The Ministry of Education stated that USD 96.5 million is needed to recover from the damage to schools in the Benishangul Gumuz region, while the Ministry of Health stated that USD 22.35 million is needed to recover from the damage in the health sector of the region.

However, the question of equitable distribution of wealth is being raised in the reconstruction project of the federal government. The Boro Democratic Party, which shared power in the region’s government, blamed the federal government for not paying enough attention to reconstruction.

In a statement issued by the party a month ago, the party urged the federal government to pay attention and allocate resources to the replanting zone in the same way that attention and resources are allocated to the destruction and displacement of citizens in northern Ethiopia.

Yohannes Tesema, the party’s Political Sector head, believes the government is not giving enough attention to the recovery as much as it gives to the Amhara and Afar regions.

He claims that out of the USD 300 million granted by the World Bank, the amount of funds allocated for the Benishangul Gumuz region is small.

It says there is no military solution to this conflict

The US Department of State called on “Eritrea and others to cease fueling” the conflict in Ethiopia and urged Eritrea to withdraw its forces from Ethiopian borders. The department accused Eritrea of increasing tensions throughout the Horn of Africa region.

The US also called on “both the Government of Ethiopia and the Tigray regional authorities to halt immediately their military offensives and pursue a negotiated settlement through peace talks under the auspices of the African Union.”

At a press briefing on September 15, 2022, Ned Price, spokesperson of the US Department of State, stated that Ethiopia should look for a non-military solution to the conflict.

“We are increasingly concerned by the growing military activity in northern Ethiopia. We strongly condemn the resumption of hostilities. There is no military solution to this conflict. These actions are inconsistent with the government of Ethiopia and Tigrayan regional authorities’ stated willingness to go to talks,” Price said.

The US special envoy to the Horn of Africa, Mike Hammer, who is in Ethiopia over the week and canceled his expected press brief on Friday, is also advancing a similar position to secure a peaceful resolution to the third wave of war that resumed in Ethiopia on August 24, 2022.

The special envoy is reportedly making efforts to bring warring parties to the table, while Olusegun Obasanjo, the designated AU official to broker peace in Ethiopia, has been silent since the third wave of war broke out.

Both optimism and worry dominated the just-ended Ethiopian year. A year that began with aspirations for wider peace and stability in the nation ended with the resumption of another deadly conflict. In a war with no apparent end in sight, thousands of people are still dying in the highlands. The economy is still in a difficult situation after recovering a little in the last Ethiopian year, on the top of the stockpiled macroeconomic problems.

It was such a challenging year. In the last year, more than the year before, the effects of the one-year-old conflict was felt. This is especially true in terms of the economy. The cost of living remains high despite recent indications that inflation is slowing down nationwide.

“The government found it difficult to contain inflation and in the third quarter of the past fiscal year started to slow down the pace of depreciation of the national currency. Maybe this contributed to stabilize the inflation rate somewhat but it may also have contributed to foreign exchange shortage in the economy,” Patrick Heinisch, an economist said.

Some conflict-affected areas are experiencing a more than 1000 percent increase in commodity prices as a result of severe supply shortages. It is still a problem in the country’s north, particularly in Agew Zone, Tigray Region, and parts of Afar Region.

“Up until the resumption of the war, I was sending money to my family living in Tigray, paying 30 birr for every 100 birr I transfer,” said Kirubel, whose last name is withheld for security reasons. “For obvious reason, this is not something normal in a country with a sound economic condition.”

Kirbuel’s story is actually the tip of the iceberg. Just two months after the previous Ethiopian year began, Ahmed Shide, the Minister of Finance, was among the first to voice concerns about the status of the economy. In the same broadcasted speech on the state broadcaster in November 2021, his comrade Yinager Dessie, the governor of the National Bank of Ethiopia (NBE), did not conceal the fact that the economy was poised to collapse because of the war.

It didn’t take long for Prime Minister Abiy Ahmed (PhD) to react. While also paving the way for a negotiated settlement with the warring party in the North, the Tigray People’s Liberation Front (TPLF), which the Parliament designated as a terrorist organization, his administration declared a humanitarian truce. Humanitarian organizations had relatively easier access to provide food supplies to people in the war-torn region.

First, some progress was made in the effort to bring about peace. The economy showed signs of improvement, and the IMF, which had previously included Ethiopia on its list of nations with unpredictable and unstable economies, predicted that it would rebound. Soon after the ceasefire in North Ethiopia, the other Bretton Woods organization, the World Bank, similarly predicted Ethiopia’s economy would revive.

Though such encouraging developments helped the government rebuild its ties with the West and western financial institutions, they did little to prevent the country’s fundamental problem—the shortage of foreign currency. From approximately USD two billion to barely USD 290.7 million in loans, development partners and lenders cut their commitments.

The net inflow of external debt was negative USD 551 million, indicating that the amount of creditor loans disbursed was less than the principal amount of debt the government was servicing.

Businesses have also faced a financial crisis due to the forex shortage, a situation that has plagued them for decades, though some found last year to be their most difficult ever.

More than any other businesses, those involved in the water bottling industry felt the pinch. Twenty water bottlers had to shut down because they were no longer able to run their businesses due to a lack of inputs, and they had even reached a point where they were unable to pay their employees’ salaries.

Overall, access to foreign currency remains challenging for businesses. At the end of 2021, foreign exchange reserves stood at USD 1.6 billion, or 1.3 months’ worth of imports of goods and services.

The authorities tightened foreign exchange regulations numerous times over the previous fiscal year in response to the shortage, upping the percentage of foreign exchange companies’ must surrendered to the government (central bank) to 70 percent. Even exporters had to deal with the shortage because the restriction prevented them from using more than 20 percent of the foreign exchange they had earned.

Another major economic burden that persisted in the country last year was the widening budget deficit, made worse by the war in the North, which increased spending for military. The budget deficit widened and is now expected to exceed 300 billion birr this year, which is more than twice what it was in the just-ended fiscal year. These difficulties compelled the government to take desperate decisions, such as freezing loans or introducing new taxes, in an effort to increase revenue and narrow the mounting deficit.

However, not every problem can be solved.

For many workers in industrial parks, the suspension of Ethiopia from the African Growth Opportunity Act (AGOA), a trade benefit granted by the US to developing countries so they may export their goods without paying an import duty, has been a bad news.

Due to significant layoffs brought on by the suspension, more than five factories have left the park, and over 5,000 workers have lost their jobs as a result.

“The year has been tough for all workers in Ethiopia. From the inflationary pressure to the war that has made many jobless, they have been in a pickle. Some had to live in poverty since their salary is not enough to cover expenses,” said Kasahun Follo, president of Confederation of Ethiopian Trade Union (CETU), urging employers to consider the challenges and make adjustments in the coming New Year.

Although the amount of jobs created by industrial parks is relatively low compared to the agricultural sector, the country had planned to industrialize. For Heinisch, these efforts are now being thwarted.

“Worryingly, since 2019 the share of the industrial sector in GDP has actually decreased. The trend is likely to have continued in the past fiscal year,” he said.

Despite the difficulties last year, industries did well.

The export of industrial items reached a record-high USD 500 million in exports during the previous fiscal year. However, this is negligible in light of the development in the coffee industry, which generated USD 1.4 billion in revenue during the previous fiscal year. It is a success that has helped officials to record the nation’s record-high exports revenue, which exceeded the USD four billion mark during the previous fiscal year.

Despite some progresses, however, the overall economic condition seems to be in worst shape, according to economists.

“We have undertaken a study and discovered that the economy is not in a stable condition, which is indicated by the unpredictability of the exchange market, the fiscal policy and the forex market, adding to global-wide problems,” said Tewodros Mekonnen (PhD), an economist and a policy analyst.

Another economist, Mengistu Ketema (Prof.), also believes the economy had not been in a good condition last year.

“Inflation was growing, above 30 percent throughout the year. External debt are maturing, thus forcing the country to allocate more budget for debt servicing. The drought in the south also worsened the already tense situation. And when you add all these to the global economic challenges, including the war in Ukraine, it indicates the economy is between a rock and a hard place,” Mengistu said.

For Heinisch, who believes Ethiopia did not experience a “post-COVID” recovery in 2021/2022 as many other countries did, the outlook is more benign, assuming that the war that has broken out again will come to an end quickly and the country can focus on its economic reforms again. “Debt restructuring could free up resources that the country needs for reconstruction but also new investment projects. So there is still reason for hope,” Heinisch concluded.

Both optimism and worry dominated the just-ended Ethiopian year. A year that began with aspirations for wider peace and stability in the nation ended with the resumption of another deadly conflict. In a war with no apparent end in sight, thousands of people are still dying in the highlands. The economy is still in a difficult situation after recovering a little in the last Ethiopian year, on the top of the stockpiled macroeconomic problems.

It was such a challenging year. In the last year, more than the year before, the effects of the one-year-old conflict was felt. This is especially true in terms of the economy. The cost of living remains high despite recent indications that inflation is slowing down nationwide.

“The government found it difficult to contain inflation and in the third quarter of the past fiscal year started to slow down the pace of depreciation of the national currency. Maybe this contributed to stabilize the inflation rate somewhat but it may also have contributed to foreign exchange shortage in the economy,” Patrick Heinisch, an economist said.

Some conflict-affected areas are experiencing a more than 1000 percent increase in commodity prices as a result of severe supply shortages. It is still a problem in the country’s north, particularly in Agew Zone, Tigray Region, and parts of Afar Region.

“Up until the resumption of the war, I was sending money to my family living in Tigray, paying 30 birr for every 100 birr I transfer,” said Kirubel, whose last name is withheld for security reasons. “For obvious reason, this is not something normal in a country with a sound economic condition.”

Kirbuel’s story is actually the tip of the iceberg. Just two months after the previous Ethiopian year began, Ahmed Shide, the Minister of Finance, was among the first to voice concerns about the status of the economy. In the same broadcasted speech on the state broadcaster in November 2021, his comrade Yinager Dessie, the governor of the National Bank of Ethiopia (NBE), did not conceal the fact that the economy was poised to collapse because of the war.

It didn’t take long for Prime Minister Abiy Ahmed (PhD) to react. While also paving the way for a negotiated settlement with the warring party in the North, the Tigray People’s Liberation Front (TPLF), which the Parliament designated as a terrorist organization, his administration declared a humanitarian truce. Humanitarian organizations had relatively easier access to provide food supplies to people in the war-torn region.

First, some progress was made in the effort to bring about peace. The economy showed signs of improvement, and the IMF, which had previously included Ethiopia on its list of nations with unpredictable and unstable economies, predicted that it would rebound. Soon after the ceasefire in North Ethiopia, the other Bretton Woods organization, the World Bank, similarly predicted Ethiopia’s economy would revive.

Though such encouraging developments helped the government rebuild its ties with the West and western financial institutions, they did little to prevent the country’s fundamental problem—the shortage of foreign currency. From approximately USD two billion to barely USD 290.7 million in loans, development partners and lenders cut their commitments.

The net inflow of external debt was negative USD 551 million, indicating that the amount of creditor loans disbursed was less than the principal amount of debt the government was servicing.

Businesses have also faced a financial crisis due to the forex shortage, a situation that has plagued them for decades, though some found last year to be their most difficult ever.

More than any other businesses, those involved in the water bottling industry felt the pinch. Twenty water bottlers had to shut down because they were no longer able to run their businesses due to a lack of inputs, and they had even reached a point where they were unable to pay their employees’ salaries.

Overall, access to foreign currency remains challenging for businesses. At the end of 2021, foreign exchange reserves stood at USD 1.6 billion, or 1.3 months’ worth of imports of goods and services.

The authorities tightened foreign exchange regulations numerous times over the previous fiscal year in response to the shortage, upping the percentage of foreign exchange companies’ must surrendered to the government (central bank) to 70 percent. Even exporters had to deal with the shortage because the restriction prevented them from using more than 20 percent of the foreign exchange they had earned.

Another major economic burden that persisted in the country last year was the widening budget deficit, made worse by the war in the North, which increased spending for military. The budget deficit widened and is now expected to exceed 300 billion birr this year, which is more than twice what it was in the just-ended fiscal year. These difficulties compelled the government to take desperate decisions, such as freezing loans or introducing new taxes, in an effort to increase revenue and narrow the mounting deficit.

However, not every problem can be solved.

For many workers in industrial parks, the suspension of Ethiopia from the African Growth Opportunity Act (AGOA), a trade benefit granted by the US to developing countries so they may export their goods without paying an import duty, has been a bad news.

Due to significant layoffs brought on by the suspension, more than five factories have left the park, and over 5,000 workers have lost their jobs as a result.

“The year has been tough for all workers in Ethiopia. From the inflationary pressure to the war that has made many jobless, they have been in a pickle. Some had to live in poverty since their salary is not enough to cover expenses,” said Kasahun Follo, president of Confederation of Ethiopian Trade Union (CETU), urging employers to consider the challenges and make adjustments in the coming New Year.

Although the amount of jobs created by industrial parks is relatively low compared to the agricultural sector, the country had planned to industrialize. For Heinisch, these efforts are now being thwarted.

“Worryingly, since 2019 the share of the industrial sector in GDP has actually decreased. The trend is likely to have continued in the past fiscal year,” he said.

Despite the difficulties last year, industries did well.

The export of industrial items reached a record-high USD 500 million in exports during the previous fiscal year. However, this is negligible in light of the development in the coffee industry, which generated USD 1.4 billion in revenue during the previous fiscal year. It is a success that has helped officials to record the nation’s record-high exports revenue, which exceeded the USD four billion mark during the previous fiscal year.

Despite some progresses, however, the overall economic condition seems to be in worst shape, according to economists.

“We have undertaken a study and discovered that the economy is not in a stable condition, which is indicated by the unpredictability of the exchange market, the fiscal policy and the forex market, adding to global-wide problems,” said Tewodros Mekonnen (PhD), an economist and a policy analyst.

Another economist, Mengistu Ketema (Prof.), also believes the economy had not been in a good condition last year.

“Inflation was growing, above 30 percent throughout the year. External debt are maturing, thus forcing the country to allocate more budget for debt servicing. The drought in the south also worsened the already tense situation. And when you add all these to the global economic challenges, including the war in Ukraine, it indicates the economy is between a rock and a hard place,” Mengistu said.

For Heinisch, who believes Ethiopia did not experience a “post-COVID” recovery in 2021/2022 as many other countries did, the outlook is more benign, assuming that the war that has broken out again will come to an end quickly and the country can focus on its economic reforms again. “Debt restructuring could free up resources that the country needs for reconstruction but also new investment projects. So there is still reason for hope,” Heinisch concluded.

The envoy is wrapping up two weeks in the Horn region.

“He remained actively engaged with the Government of Ethiopia, with the Tigray regional authorities, with the African Union, and with international partners to seek to advance an important effort to bring peace. He met on September 12 with the AU’s high representative, Obasanjo,” stated Price.

On September 16, 2022, the US embassy in Addis Ababa also stated that Hammer held productive meetings with Ethiopian government officials, civil society representatives, the African Union, and international partners.

Moussa Faki, the AUC chairperson, who extended Obasanjo’s mandate on September 10, 2022 to continue engaging with warring parties in Ethiopia, also met with Hammer on the next day. On the other hand, the UN Security Council, which was set to discuss the situation in Ethiopia, was postponed.

The five months of ceasefire and humanitarian assistance to Tigray were shattered when the third wave of war broke out on August 24, 2022. The ongoing peace initiative under the AU umbrella hit a deadlock, which the special envoy is trying to reactivate.

The Tigray regional government, which has been refuting AU-led peace negotiations prior to the latest war, also issued a statement on September 11, 2022, agreeing to negotiate under the AU umbrella.

Nonetheless, reaching a ceasefire agreement and resuming the peace talks remains farfetched, worsening the humanitarian crisis, as Eritrean forces are reportedly drawn into the war and regionalizing the conflict.

“These actions are worsening the humanitarian situation at a time of pronounced drought and food insecurity,” stated Price.

He called on the government of Ethiopia, Tigrayan authorities, and all parties to allow the unhindered delivery of humanitarian relief.

“Humanitarian assistance should not be used for military purposes—it should be used to save lives. And we urge the parties to cease the fighting and to begin talks under the auspices of the AU as soon as possible. Peace needs to be given a chance. Too many people have died, and too many more are suffering,” he added.

“Our region doesn’t have the capacity to mobilize this amount of budget for the recovery. It definitely needs the federal government’s support more than this,” he asserted.

The commission’s requests to various UN entities operating in Ethiopia to share documents and materials of interest were largely deflected, or responded to after an inordinate delay. Its request to access the internal database of the joint investigation team was also delayed.

“Despite these challenges, the Commission is confident that its findings are supported by information that satisfies the standard of proof for UN investigations,” the report reads.

The commission’s recommendation, which asks the UN Security Council (UNSC) to include the war in northern Ethiopia on its agenda for the 14th time since December 2020, worries the Ethiopian government more than the report’s findings and conclusions do.

In order to stop further violations and abuses of international human rights law and humanitarian laws, it also calls on the council to take action targeted at restoring peace, stability, and security in the area. During a session held this week, officials of the federal government have already expressed their resentment at the recommendation of the commission.

“The Commission’s political pronouncements referring to the UN Security Council are ultra-virulent and betray political motivations that go beyond human rights,” Zenebe said.

It is a sentiment shared by countries that are members of the Human Rights Council.

“The Commission went beyond its mandate and made a statement on things that were not in its remit,” said Konan François, a representative of Côte d’Ivoire on behalf of a group of African States.

Wondemagegn Tadesse (PhD), an international human rights lecturer at Addis Ababa University, believes there are three options in which the UN Human Rights Council can decide to approve the commission’s report and recommendations. The first option is to end the matter within the council itself.

“In this case, there will be nothing more to do than call on the warring parties in the country to implement these recommendations,” Wondemagegn explained.

The second option is to refer the matter to the UN General Assembly. “However, since the assembly gathers over a long period of time, it may not have a big impact on Ethiopia,” he added.

Apart from that, even if it is presented to the General Assembly, its voting system does not have veto power, so there is a high possibility that it will not be approved. A large number of developing countries at the General Assembly will not vote in favor of the resolution as they consider such decisions as interference, according to Wondemagegn. Moreover, experience so far shows that if the country in which the decision is made does not accept the decision, the chances of its implementation are low.

However, if issues are referred to the UNSC, the third option may take a different path than the two options.

“The Security Council is the only institution that has the power to take military action among the UN institutions, but as we always see, the proposal to the Council is overturned by the veto power, so it does not make a difference,” Wendmagegn asserted.

In the past two years, the council has not passed any decisions on Ethiopia. The war in northern Ethiopia and the Great Ethiopian Renaissance Dam have been on the agenda tabled before its members for discussion. When a resolution was proposed, China and Russia, who have veto power, supported Ethiopia.

For Wondemagegn, even if the Security Council passes a resolution, it is difficult to implement it. If the Council decides to send troops to stop human rights abuses, there may not be many countries to contribute troops to a country as large as Ethiopia.

“Even if countries contribute soldiers and send them to Ethiopia, they will have to fight a war with Ethiopia because the Ethiopian government will not accept the decision. No one wants this,” he said.

Another human rights expert, who asked not to be named, explained that even if the UN Human Rights Council does not pass any decision as a result of this report, countries that want to take unilateral action can use it as a cause for their measures.

“Those like the US and the EU may use the report to suspend loans and impose sanctions,” the expert said, adding, “but this would only hurt the people affected by the war more.”

The Ethiopian Human Rights Commission also agrees with this idea.

“Decisions should be made to reward the people affected by the war and bring reconciliation, not where parties with differences of opinion are dragged into a corner,” said the Deputy Chief Commissioner for Human Rights, Rakeb Melesel, while underscoring that EHRC is ready to share its database if the Commission is willing to undertake another investigation.

The Ethiopian government is exerting pressure to block any attempts by the Commission to extend its mandate. “The Council should reject the report and oppose any attempt to extend the mandate of this Commission beyond December 2022,” the government emphasized.

Farmers reject the much-anticipated Bt cotton.

Cotton growers in Ethiopia resort to unauthorized GMO cotton illegally smuggled from Sudan. Bt-RR cotton seed is currently being cultivated in Afar, Metema, Benishangul Gumuz and Gambella regions after being smuggled via Metema, Humera and other border areas between Sudan and Ethiopia.

Once the first generation of open-pollinated (OT) is acquired, it can be sown for between three and five years, after which the seed cannot be recycled. Ethiopian cotton farmers are currently buying the smuggled cotton seeds and multiplying them locally at 10,000 birr to 13,000 birr per quintal.

Bt-RR originated in Brazil, and was largely cultivated in Sudan. Most other GM cotton seeds are non-OT, which means they cannot be used after the first year. As a result, the farmer has to buy the seed every year.

The cotton farmers The Reporter talked to underlined that the smuggled cotton seed is preferred mainly because it resists bollworm, which has been devastating the existing local cotton breeds. This is because a one-time chemical spray on the vegetation is also highly effective in eliminating all weeds except the cotton itself.

The productivity of the Bt-RR is between 10 and 14 quintals per hectare, slightly superior to the local varieties. But the Bt-RR is advantageous mainly because it beats the bollworm, and requires less pesticide.

“A number of farmers are now multiplying the Bt-RR seed and selling it to cotton farmers across the country. The farmer liked the seed, instead of the local existing varieties and the GM cotton approved by the government,” said a manager of a large-scale cotton farming company. He cultivated the new seed on 200 hectares in Amhara regional state.

Melkamu Telake, board chair of the Ethiopian Cotton Producers, Ginners, and Exporters Association, says farmers are resorting to smuggled seed as access to other cotton seeds depletes. “The government failed to provide the type of seed preferred by the farmer.”

After the Parliament legislated the GMO proclamation in 2015, the Biosafety and Invasive Alien Species Follow-up and Control directorate at the Environmental Protection Authority (EPA) and EIAR commercialized Bt cotton for the first time in 2019.

However, a number of commercial cotton farmers in Gambella have tried Bt cotton and lost interest after the first year. The first reason was that the authorized Bt cotton could not effectively resist the bollworm.

The other major reason was that the authorized Bt cotton, which is imported from India, is expensive costing USD 28 per kilo. As a result, the EIAR picked Indian-based JK Agri Genetics Ltd. to open a subsidiary company in Ethiopia and multiply the seeds in Ethiopia to avoid the forex problem required to import the seeds annually. However, this plan also bore no fruit, as the Ethiopian farmers rejected the authorized Bt cotton.

“All the cotton farmers in Ethiopia are boycotting the authorized Bt cotton. It did not effectively resist the bollworm. It necessitates the repeated application of insecticides and pesticides. We have to buy the seeds every year at an expensive price. Plus, our farmers lack the technology required to cultivate the authorized Bt cotton with the right agronomical practices. So the farmers are resorting to the smuggled variety, instead,” said Melkamu.

Mesele Mekuria, Cotton Development Director at the Ethiopian Textile Industry Development Center, also said the authorized Bt cotton did not work.

The productivity of existing cotton seeds in Ethiopia, which are Ggedera and DP90, dropped, especially after the varieties were in use for over 30 years and were unable to resist diseases. Currently, rain-based farming of traditional seeds offer anywhere between eight quintals and 28 quintals per hectare.

However, if irrigation is coupled with precise agronomical practice, the local seeds can offer between 45 quintal and 54 quintals per hectare, according to Melkamu.

“Big cotton farmers like Lucy in Afar, and other farmers in Arbaminch have achieved this level of productivity. But there are certain interest groups who are trying to enforce certain Bt cotton on Ethiopia. We need GMO cotton only after we achieve maximum productivity with the existing local varieties,” Melkamu said.

These interest groups, according to him, do not want the local varieties. “Global GMO patent holders are behind these interest groups. Once we start using such GMO varieties, we will be their slaves because the existing local varieties will be ousted in five years and we have to buy their seed every year.”

Yet, other cotton farmers argue that the EIAR has to take samples of the Bt-RR that are smuggled from Sudan, study them, and approve them for Ethiopian farmers.

The meager productivity of local cotton farming has been the Achilles heel for Ethiopia’s aspirations to become the manufacturing hub of Africa, mainly capitalizing on textiles, garments, and apparel.

Damage to health and education infrastructure in six regions of Ethiopia resulting from conflicts need a USD 3.6 billion recovery budget, according to a new Recovery and Rehabilitation Plan document released by the Ministries of Health and Education.

The ministries outlined an intervention plan for the five-year rehabilitation project that will be implemented in three phases. The recovery intervention plan is part of the “Response – Recovery – Resilience” project launched by the Ministry of Finance in March 2022.

The ministries assessed the damage that occurred in Tigray, Afar, Amhara, Benishangul-Gumuz, Oromia, and Konso zones of the Southern Nations Nationalities and People’s (SNNP) regions. The assessment and recovery plan were prepared by the government, with a technical assistance from the World Bank.

Education suffered the most harm. According to the recovery plan, the sector requires USD 2.2 billion to recoup lost learning and rebuild destroyed facilities.

The Ministry of Health’s plan proposed a USD 1.4 billion intervention.

As the assessment shows, the conflict destroyed 2,681 schools completely and another 4,158 schools partially in these regions. 38 Technical and Vocational Education and Training (TVET) institutions and three universities have also sustained varying levels of damage. The number of destroyed TVETs and universities in the Tigray region is not included due to a lack of data.

This destruction of the education sector has affected more than 4.2 million learners and close to 200,000 teachers and education staff, the report reads.

The number of people affected by the damage to the health sector is estimated to be close to 24 million people. The people in conflict-affected area have been “adversely impacted.”

The assessment showed that 3,217 health posts, 709 health centers, and 76 hospitals were partially or completely damaged in the six conflict-affected regions.

Among the six regions that were affected, the Amhara region suffered the most damage to the sectors. Out of the 3,217 health facilities that sustained damage, 69 percent of them are found in the Amhara region. Furthermore, out of 248 ambulances that were damaged or looted, 50 percent were in the region.

The region’s 4,020 schools have also been destroyed, accounting for 58.7 percent of the total damage across all six areas.

However, given the region’s penetration of health institutions, the damage to health facilities in Tigray is substantially greater. 82.9 percent of the region’s hospitals have been damaged. The same fate has befallen Tigray’s 76 percent of health posts and 50 percent of health centers.

In the health sector, out of the overall estimated recovery cost, USD 1.4 billion, the largest share, USD 501.19 million, is for health centers. General and specialized hospitals follow at a cost of USD 342.54 million.

In the education sector, USD 1.36 billion is planned to recover damaged primary and secondary schools in the six regions.

The recovery and reconstruction program will be implemented for five years in three phases, according to the documents prepared by the ministries. The program’s early recovery phase needs will be met within the first six months. Short-term demands range from six to 24 months, whereas medium-term needs range from three to five years.

According to the ministry’s Stakeholder Engagement Plan document, the implementation of the program will be led by a Federal Project Coordination Unit (FPCU) in the Ministry of Finance. Various sectoral ministries and other mandated offices are responsible for the implementation of the program.

In the Tigray region, where the ministries have no access, the recovery project is planned to be implemented by a third party. The Ministry of Finance signed a third-party implementation agreement with the United Nations Office for Project Services (UNOPS) last month.

The World Bank granted USD 300 million in May for the implementation of this project. While the government, which has just begun its fiscal year, has allocated 20 billion birr.

Abiy Ahmed’s (PhD) time as Ethiopia’s prime minister is not without difficulties. He even called himself “a Prime Minister with no time to even undergo a medical checkup” in front of lawmakers. Since taking over after Hailemariam Desalegn’s departure, Abiy has ruled a nation that has been plagued by economic distress, political unrest, and even a civil war that has lasted for more than a year. On top of the never-ending problems he dealt with, with most of the incidents occurring in the northern part of the country, there was another heavy task that challenged his leadership. That is the statehood question brought by ethnic groups living in the south.

A few months after taking office, Abiy was inundated with requests from the leaders of more than a dozen zones and woredas, placing pressure on his government to help them realize their desire for a regional state. Participation in the endeavor to achieve statehood recognition ranged from low-level bureaucrats to zonal leaders and officials in the federal government. Ten zones filed a resolution with the House of Federation (HoF) adopted by their separate councils to hold a referendum on statehood. Abiy was aware right away how urgent it was to fulfill the regions’ desire.

Soon after taking office, Abiy traveled to almost all of the South Region’s ethnically divided zones. It was an attempt to win political support as he rushed to replace the Ethiopian Peoples’ Revolutionary Democratic Front (EPRDF) at the time and establish the ruling Prosperity Party. But his administration’s stance on their desire for statehood was the main topic that dominated the debates at the zones. He promised to respond to their request, which by all legal criteria is legitimate.

However, it was easier said than done to keep the pledge. Sidama was the first regional state to be established following a referendum, with 98 percent of voters supporting the establishment of a new regional state. But civilians paid a price for the government’s efforts to push through Sidama’s desire for statehood, as enraged protesters set fire to the homes of many Hawassa inhabitants and forcibly evicted many others.

In particular, ethnic Amharas were targeted in all incidents involving statehood questions across the South Region. The Attorney General recently released a report that the homes of ethnic Amharas were burned to ashes, which led to the arrest of dozens of people on suspicion of being involved in the violence.

It appears the government understood the consequences of ignoring statehood questions were brought by Ethiopians to the south. Abiy formed a team of experts and high-level government officials two years ago to launch a study on the issue after realizing the consequences of disregarding statehood requests.

The team sent out three recommendations. The first option is to maintain the South Nation, Nationalities and People’s Regional State in its present configuration while making changes to the region’s appropriate number of political seats. The second suggestion was to establish the Sidama region while keeping other ethnic groups as members of the SNNPR. The third involved splitting the region into five, clustering the ethnic groups together.

The third alternative seems to be what the federal administration chose after the first two became unworkable due to rising animosity among ethnic group elites in South Ethiopia.

“I think it’s a step in the right direction, but caution should be exercised to avoid making the same mistake as SNNPR, which is now being dismantled due to growing resentment over resource sharing, political participation, and infrastructure development,” said Keyredin Tezera, assistant professor of Social Anthropology who participated in the study carried out at the request of the federal government.

Following Sidama’s victory for independence from the SNNPR, Kaffa, Sheka, Bench Sheko, Dawuro, and West Omo Zones, as well as the Konta Special District, joined to form the South West Region through a referendum. The local council members of five special Woredas – Amaro, Ale, Basketo, Burji, and Derashe – as well as the Konso, Gedeo, Gamo, Gofa, South Omo, and Wolayta zones voted last week to restructure their administrative units into a newly established regional state.

In a similar fashion, members of the Hadiya, Halaba, Kembata Tmbaro, Silte, and Yem Special Woreda local councils have begun the process of creating a new regional state. However, activists and political organizations active in the zones contested the action.

The Gurghe people, with whom the federal government wants to construct a cluster along with Hadiya, Silte, Kembata, Silte, and Yem, are among those who have objected to the concept of forming regions in clusters. The Guraghe zone has a population of approximately six million people and a land area of approximately 5932 sq.km. Its council was one of the zones that submitted a request to hold a vote on becoming a separate region.

Social activist, Misbah Kedir, is one of the ethnic Guraghes who have contested the federal government’s proposal to partition SNNPR into five cluster areas. He thinks it is wrong for the central government to “forcefully” incorporate the Guraghe Zone into the cluster.

“In addition to Guraghes, other zones that had voted to create a cluster region had also supported the motion after receiving an order from the federal government,” said Misbah.

Wolayita’s opposition wants to be heard too.

“First and foremost, the council, whether in Wolayita or other zones, does not have the power to accept such a resolution on behalf of the people because their term period ended almost seven years ago. Second, this is something that the cadres, not the people, want,” said Amanuel Mogiso, leader of the opposition Wolayita National Movement, which is active in Wolayita Zone.

Amanuel exhorts the federal government to pay attention to what the people want, comparing the situation to sitting on a ticking time bomb. “The Wolayita people have peacefully expressed a desire for their own territory. They need to be heard,” he added.

The politician urges the federal government to avoid meddling and let ethnic communities in SNNPR, including Wolayita, exercise their constitutional rights. “To reject their right to have their own regional state is unlawful,” Amanuel continued.

Jember Abdo, a legal expert, agrees.

“The state is turning into an enabler of violence. In the case of Guraghe, this is what I saw. The people exercised their right to form a region but the federal government’s response was to militarize their hometown,” Jember said urging the federal government to uphold the constitution.

There are economic reasons driving the pursuit of statehood.

“In order to obtain a permit from SNNPR officials, farmers and businessmen must travel hundreds of kilometers from distant areas in the Guraghe zone to Hawassa. And after the cluster region is established, they might be required to follow suit in order to obtain a permit from Hossana, which will likely serve as the cluster region’s capital city,” Misbah said.

Amanuel is worried too.

“The political structure is to blame for the underdevelopment of zones. When you have a significant budget and tax in a region, it is not the same,” Amanuel concluded.

Regardless of the final outcome of the campaign to achieve statehood for Ethiopians in the South, there are still many unknowns about the future of the region, which will depend on the government’s decision on how to manage the grievances of the ethnic groups it intends to organize into a cluster region.

Sergey Lavrov, Russia’s Foreign Minister, affirmed that his country is in favor of giving Africa a permanent seat in the UN Security Council. The Foreign Minister also concurred with Ethiopian officials that the Security Council should undergo reform in a bid to take into account the current state of the world.

Lavrov arrived in Addis Ababa on July 26, 2022 for a two-day trip, where he met President Sahlework Zewde; Demeke Mekonen, deputy prime minister and foreign minister, and other high officials. Lavrov also traveled to Egypt, Congo, and Uganda, before wrapping up his Africa trip by conferring with the diplomatic community at the AU headquarters.

“Ethiopia and Russia share similar stances on issues on the global and regional agenda. These approaches rely on adherence to international law, particularly the tenets of the UN charter and the respect for the sovereign rights of states,” said Lavrov.

During the 35^th ordinary session of the AU summit in February 2022, PM Abiy Ahmed (PhD) exceptionally raised the urgent topic of reforming the UN and securing a permanent seat for Africa in the UNSC.

As a result, the AU passed a resolution that requests “full representation of Africa in the United Nations Security Council, including not less than two permanent seats in the United Nations Security Council with all the prerogatives and privileges of permanent membership, including the right of veto.

The AU also proceeded to request the Committee of Ten Heads of State and Government to continue to intensify its engagement at the highest level with other interested and regional groups and key stakeholders, including the five permanent members of the UN Security Council, with a view to building on progress made in advancing, canvassing and promoting the Common African Position.

The AU’s quest for reform of the UN began in 2005 when African states approved the Ezulwini consensus and Sirte Declaration on the Reform of United Nations Security Council.

In 2010, President Goodluck Jonathan of Nigeria, told the UN General Assembly, “The exclusion of Africa from the permanent member category of the Security Council can no longer be justified. We urge the UN to quicken the pace of its reforms. Not only to better reflect the current global realities but also to ensure that it enjoys genuine legitimacy.”

Africa does not have a proportional representation in the global body.However, the consideration has become critical, as Africa is frequently impacted by decisions over which it has no say.

In particular, both Ethiopia and Russia have been haunted by the UNSC particularly since last year. In the past year, the UNSC discussed sanctioning Ethiopia in relation to human rights violations in the Tigray war. However, the considerations were vetoed by Russia and China. Ethiopia also paid back by refraining from voting, when the UNSC introduced emergency voting in March 2022 to condemn Russia’s invasion of Ukraine.

Demeke appreciated Russia’s “unwavering support during difficult times of need, particularly in the recent struggle to safeguard Ethiopia’s sovereignty.’

The major purpose of Lavrov’s trip to Africa, amidst a propaganda war with the west, is also to secure Africa’s support in similar UN voting scenarios in the future.

Gaining a permanent seat on the UN Security Council will position Africa as a balancing force between the power struggles of the east and west, as well as the rapidly changing global geopolitics. However, reforming the western-dominated organization might not be easy, according to scholars. But once the UN begins processing the AU’s request, Russia and China can play a decisive role in making Africa earn its place in the UN structure.

Over 60,000 foreigners have registered so far

Ethiopia’s Ministry of Foreign Affairs urged foreigners with expired visas and resident permits to get registered in 125 selected areas of registration established for this purpose.

Speaking at a press conference on Thursday, Ministry Spokesperson Meles Alem (Ambassador) has urged all foreign nationals living in Ethiopia without proper documents to be registered immediately before authorities start to take legal action as per the international law Ethiopia has signed.

Foreigners without any visa or residence permit, as well as refugees or asylum seekers requesting status and residing in Addis Ababa and its vicinities with or without an urban refugee permit, are also requested to register as of July 25, 2022.

According to Meles, within the last five days of the official announcement for registration, over 60,000 people have registered from countries including Canada, America, Eritrea, Congo, Italy, Syria, China, Turkey, Ghana, Burundi, Liberia, India, Bangladesh, South Sudan, and other countries.

The first phase of registration sites is installed in Addis Ababa and some Oromia administrative zones, and the second round of registration will be opened soon in regional states and the Dire Dawa City administration, the spokesperson told the reporter.

Registration is conducted under the auspices of the Immigration and Citizenship Service, through the Vital Events Registration Offices of all Woredas and the Immigration and Citizenship Service, as per its mandate given by a proclamation to register and administer legal permits for foreign nationals living in Ethiopia.

“We have started this to make sure that immigration work is proceeding as per the legal procedures,” said Meles (Ambassador), adding that there is no further intention of expelling or any other form of stunt.

The spokesperson has further called on foreigners to take advantage of this chance before officials start to take legal measures against those who failed to register as per the rule. However, the formal registration process will not be applied to the diplomatic community.

Over 180,000 foreigners are expected to be registered in Addis Ababa, Meles added.

In a similar presser, the spokesperson announced the cancellation of 162 million US dollars of rolling debt by the Russian government, which Ethiopia has borrowed since the Soviet Union period. According to Meles, Russia has changed the modality from debt to a development grant for purposes of modernizing the Melka Wakana Hydroelectric Power Station and upgrading Balcha Hospital’s technical capabilities.

Over 60,000 foreigners have registered so far

Ethiopia’s Ministry of Foreign Affairs urged foreigners with expired visas and resident permits to get registered in 125 selected areas of registration established for this purpose.

Speaking at a press conference on Thursday, Ministry Spokesperson Meles Alem (Ambassador) has urged all foreign nationals living in Ethiopia without proper documents to be registered immediately before authorities start to take legal action as per the international law Ethiopia has signed.

Foreigners without any visa or residence permit, as well as refugees or asylum seekers requesting status and residing in Addis Ababa and its vicinities with or without an urban refugee permit, are also requested to register as of July 25, 2022.

According to Meles, within the last five days of the official announcement for registration, over 60,000 people have registered from countries including Canada, America, Eritrea, Congo, Italy, Syria, China, Turkey, Ghana, Burundi, Liberia, India, Bangladesh, South Sudan, and other countries.

The first phase of registration sites is installed in Addis Ababa and some Oromia administrative zones, and the second round of registration will be opened soon in regional states and the Dire Dawa City administration, the spokesperson told the reporter.

Registration is conducted under the auspices of the Immigration and Citizenship Service, through the Vital Events Registration Offices of all Woredas and the Immigration and Citizenship Service, as per its mandate given by a proclamation to register and administer legal permits for foreign nationals living in Ethiopia.

“We have started this to make sure that immigration work is proceeding as per the legal procedures,” said Meles (Ambassador), adding that there is no further intention of expelling or any other form of stunt.

The spokesperson has further called on foreigners to take advantage of this chance before officials start to take legal measures against those who failed to register as per the rule. However, the formal registration process will not be applied to the diplomatic community.

Over 180,000 foreigners are expected to be registered in Addis Ababa, Meles added.

In a similar presser, the spokesperson announced the cancellation of 162 million US dollars of rolling debt by the Russian government, which Ethiopia has borrowed since the Soviet Union period. According to Meles, Russia has changed the modality from debt to a development grant for purposes of modernizing the Melka Wakana Hydroelectric Power Station and upgrading Balcha Hospital’s technical capabilities.

Special Forces of Somali regional state and a coalition of other regional and federal security forces have conducted an all-out counter attack to purge Al-shabab fighters that entered Ethiopia’s borders on Friday. The regional government deployed hundreds of Special Forces to conduct the operation.

“A number of Al-shabab fighters entered the Ethiopian border, after they conducted an attack at a time nobody expected. They first engaged with Somali Special Forces. And heavy casualties occurred on both sides. But we are clearing them out,” said an official in the regional government, who spoke to The Reporter requesting to remain anonymity since the federal government is also involved and information is to be disseminated from the center.

“We have also captured their fighters, and the operation will continue until they are cleared out from the area,” added the official.

The terror group first attacked two border towns in Somalia’s side on July 20, 2022, on the same day Somali regional state officials convened to evaluate its security forces performance.

After the first clash at Yeed and Aato towns in Ethio-Somalia border, the militants reportedly killed twenty Ethiopian forces including three civilians. The group lost 63 of its own.

The al-Qaeda linked group tried to enter Ethiopia through Afder zone in southern part of Somali region.

Apart from a strong presence by Ethiopian forces in the border areas, Ethiopia also deployed close to 4,000 troops in Somalia under the AU Transition Mission in Somalia (ATMIS), a reconfigured version of the former AU Mission in Somalia (AMISOM). Ethiopian troops maintain a stronghold in Baidowa.

However insiders question why Al-shabab is attacking Ethiopia at this moment.

“The attack is intended to divert the attention of Ethiopia. Al-shabab is conducting the attacks in coordination with the TPLF and other insurgents in Ethiopia,” said a security expert who focuses on Al-shabab.

Other insiders also link the rising Al-shabab attacks with the instability in Ethiopia. The restructuring of AMISOM and controversies shadowing the continuity of ATMIS, is also contributing to Al-shabab’s resurrection.

Over the past few months, Al-shabab’s attacks have evolved from suicide bombings to attacking military bases in Somalia, including an AU military base. Experts stress that the group is gaining momentum as Horn of Africa countries are occupied with domestic conflicts and the EU, the largest financer of AMISOM/ATMIS, is backtracking.

A few weeks ago, the newly elected Somalia President, Hassan Sheikh Mohamud said negotiations should be considered with Al-shabab, a rare gesture, which is becoming almost a shadow state.

However, the militant group in a statement said it fights to establish an Islamic state in the Horn.

In a continued conflict in West Wollega Zone, over 1,105 civilians are killed this year, including 28 officials who were shot in one day. The zone has also lost properties worth over three billion birr to extended conflict during the just ended fiscal year.

Reports of the devastating impact of the conflict presented to the Caffee Oromia, council of the Oromia regional state, which held its annual meeting over the week. Gammachis Dabala, administrator of West Wollega zone, told the council that both ethnic Amhara and Oromo are killed in his zone.

The regional government has repeatedly launched operation to eradicate the Oromo Liberation Front (OLF-Shene) group, which designated terrorist by the House of Peoples Representative (HPR) and still maintaining West Oromia as its stronghold. During the last month alone, the group has killed hundreds of civilians, according to Ethiopian Human Rights Commission (EHRC) reports. PM Abiy Ahmed called it “a massacre.”

Most of the zones of Oromia are currently under threats of the insurgent group, according to official reports. Loss of life, property damages, and closure of schools are also tolling across the regional state. In North Shewa alone, some 195 schools remain closed, while over 75,000 students were out of school, according to the report presented during the Caffee meeting.

Taye Dendea, member of the Oromia Prosperity party and state minister of Peace, was at dismay after attending the Caffee meeting. “Last year, only few woredas of Oromia were affected by conflict. Currently, eight zones of Oromia have security threats. We failed the people that elected us just last year. The Oromia Regional Government failed to fulfill its duty to protect the civilians. The damage up on our people is shocking. Externalizing the problem cannot be a solution,” he wrote on Facebook after the meeting was concluded on Friday.

The state minister also harshly criticized the budget allocation of the just started 2022/23 is not enough to fight the insurgents. Nearly 400 million birr is allocated for the regional security budget, which the state minister argues should be more than one billion birr. This accounts for less than one percent of 158.6 billion birr budget approved by the Caffee.

However, the state minister did not mention shortcomings of his ministry why the insurgent group is remaining at large.

Businesses that are registered in Tigray region as a federal taxpayer but are currently located outside the region will be paying their taxes at the Northwest Branch of the Ministry of Revenue in Addis Ababa.

The federal revenue that should have been collected in the region will be collected directly by the ministry. The tax that should have been collected by the regional government will be deposited in a trust bank account.

The ministries of finance and revenue are implementing this temporary procedure because organizations and individuals registered as taxpayers in Tigray are having a difficulty to continue their business activities in other parts of the country, according to Abaynesh Abate, the ministry’s tax declaration director.

Despite their desire to continue working in their current location, the taxpayers were unable to renew their business licenses, vehicles or construction equipment.

Abaynesh said that they could not obtain loans, bid on contracts or receive other government services. “Some of them even claimed that the house they rented for their business was in trouble since their business license had not been renewed.”

More than 100 complaints from Tigray’s taxpayers have been lodged to the ministry, and the number continues to grow. The majority are taxpayers who must pay taxes to the regional government.

Abaynesh says among the complainants, ten are Tigray registered firms that are managed by Commercial Nominees and pay federal taxes.

She explained that after the ministry informed the Ministry of Finance about the complaint in April, it allowed taxpayers to get a temporary tax clearance through a temporary procedure or register as taxpayers elsewhere.

In a letter written by the Ministry of Finance to the Ministry of Revenue last month, it acknowledged the regional government’s authority to collect the tax revenue in Tigray region.

The minister cited Article 96 of the Constitution to explain saying, “Since the income collected from individual businessmen and regional public enterprises is a regional income, it is clear that it is the regional government that can levy and collect tax.”

On the other hand, the letter explains that the tax collected from private organizations located in the region is the joint income of the federal and state governments, levied and collected by the federal government. But the income collected from federal public enterprises located in the region is the income of the federal government.

Nevertheless, since both taxpayers registered in Tigray are facing difficulties to conduct their activities due to the “emerging security problem,” State Minister, Eyob Tekalegn, in a letter stated that it is necessary to establish a temporary system.

The Ministry of Revenue, which has designated the North West branch in Addis Ababa’s Lideta neighborhood, will ensure that these taxpayers receive their tax clearance.

Abaynesh added that a request has been made to the Ministry of Finance to open a trust bank account where regional taxpayer revenue will be put.

“It will be held in a trust for later transfer to the region,” she explained.

According to Abaynesh, the ministry would only collect the taxes submitted by taxpayers because there is no means to check how much the region’s taxpayers owe.

“We don’t have any information to show how much they should be paying at that point. When the situation in the region stabilizes, it will be thoroughly examined” Abaynesh elaborated.

If taxpayers want to shift their workplace to their current address after receiving their tax clearance, registrations will be completed at the preferred address.

Under typical circumstances, changing a company’s address requires amending the company’s establishment document and submitting meeting minutes. Providing permission to change address is the authority of the regional government. All these requirements are not necessary expected to be meet in the temporary procedure.

However, even though both federal and state taxpayers registered in the state will be issued a tax clearance certificate from the Ministry of Revenue, they cannot sell their property. According to the Ministry of Finance’s letter, it is impossible to verify whether they have tax debt or not in the current situation.

Berhane Mewa is not only the former president of the Ethiopian and Addis Ababa Chamber of Commerce and Sectoral Associations, but is also a lifetime patriot in Ethiopia’s private sector struggles against state domination in the economy. Before he was forced into exile eighteen years ago by the EPRDF regime, he took up the struggle to create an independent chamber system and a real private sector in Ethiopia.

An industrial chemist by profession, Berhane came back to Addis to process a pharmaceutical investment license, to the tune of USD 22 million. He already has a plastic and rubber factory, which he established before his exile to the US.

Despite positive signs in the politics arena, Berhane argues the chambers system is still far from defending the private sector’s interests and contributing to the economy. Ashenafi Endale was granted audience. Excerpts:

The Reporter: What was at the core of your struggle for the Ethiopian private sector?

Birhane Mewa: I was forced to leave Ethiopia eighteen years ago. The government at the time was not happy with struggle in the Chamber, to create a strong private sector. I had no political interests. But after I left Ethiopia, I became a member of Kestedemena and Coalition for Unity and Democracy (Kinijit) political parties in North America. I was the secretary in Kinijit’s international leadership wing.

After Kinijit’s leadership were released from prison, I went back to normal life and started working as a business consultant, and then as a project manager. Of course I traveled to Ethiopia in between to attend my wife’s funeral. But now, I came to Ethiopia to process an investment license.

We are in the process of establishing a pharmaceutical factory in Ethiopia, in cooperation with Ethiopians engaged in the pharmacy business in the US. In general, we are here following PM Abiy Ahmed’s (PhD) call to the diaspora.

What is the kind of Chamber you want to see in Ethiopia?

The Chamber was first established as ‘the Addis Ababa Traders Association,’ during the Emperor’s era. Then it was re-established as Ethiopian Traders Council. It was free and active in advising the government, until Derg completely changed that trend. Derg made memberships mandatory and all businesses had to pay a chamber membership fees after they get their licenses.

Derg also shrunk the number of board members representing the private sector in the council, from eleven to one. At that time, nine of the eleven board members were general managers of state corporations; with only Wubshet Werkalemahu was representing the private sector.

After EPRDF took power, the general managers of state corporations left the chamber. At the time, I was president of the Ethiopian Private Manufacturing Association. So I became vice president of the Chamber to close the vacuum. And when Kebour Gena left, I became president of the chamber, through competition.

The fundamental objective of the Chamber is to advise the government before it introduces polices that affect the private sector and the economy. The second is to provide services for the private sector including trainings, information and arbitration. We were successful on both. Both the Addis and Ethiopian Chambers won various international awards, including the ‘best chamber in Africa’ award.

Nonetheless, the EPRDF was working hard to create divisions amongst, Addis Ababa, regional and sectoral chambers and associations. I worked hard to cut out such divisions and create a stronger chamber. We also managed to get back the chamber’s assets taken by the government. We also managed to access 100,000 sq. m of land for the chamber, on which the Addis-Africa exhibition center is currently being established.

Where is (should be) the exact line between state and private sector roles in the economy?

In principle, the private sector is the backbone of the economy, especially in a free market system. But during the TPLF dominated EPRDF regime; the government tried to replace the private sector by state affiliated endowment companies and state owned enterprises, which are still under party control. They enjoy access to finance, bureaucratic support, information, monopoly and other privileges. This has been stunting the growth of the private sector. I am not sure whether the situation still changed. Party affiliations still control the media, not only businesses and the economy.

Besides those parastatals, there are private businesses parasitic on preferential treatments, provided from the parties. Preferential treatment is still given for businesses, in accessing land, finance, foreign currency, and other privileges. A real private sector, which is self-created and hardworking, is very limited in Ethiopia.

The parties and government affiliated private sectors, still prevail, only changing its face. If you look at past private businesses currently, it is not hard to find a party or state support.

The right private sector should be represented only by the Chamber. It should be free, with no political interests, but defend the interests of the private sector. When we say ‘private sector’, it includes the street vendor and Gulit, to the factory and bank owners. The similarity amongst them is that they have a business license, and a common interest. There are various obstacles that hinder the chamber.

Ethiopia’s future depends on the real private sector. Foreign Direct Investments are also necessary but the domestic private sector is critical in terms of self-sufficiency, sovereignty and retention of repatriation. FDI’s can leave anytime.

Even in the USA, the private sector supports either democrats or republicans. Can a real private sector exist without any affiliation with the ruling party?

If you go to Mercato, everyone works for their own interests. They are not paid by the government but they pay taxes to the government. What the government can do is improve and equalize the playing ground.

Of course the private sector in the US supports parties. The difference is corruption is legal in the US. It is called lobbying and it is not a crime. It is also regulated. But in Ethiopia, parties establish affiliated businesses and keep taking money. The biggest problem appears when the parties themselves engage in the business. This is the biggest problem in Ethiopia. Nobody knows where the money from public enterprises goes to.

Political parties must exit from businesses and the economy. In the US, individuals and businesses giving money to parties, is publicly known, and audited. The tax authority also knows it.

Do you think the existing private sector in Ethiopia can be changed into a real private sector, or should we start over?

A real private sector is not something we create. What the government should do is create conducive environment for a ‘real private sector to emerge.’ It is the demand and supply dynamism that creates a real private sector. There are shoe shiners who have become millionaires. Did the government create them? Of course the government can facilitate support, but without political affiliation.

PM Abiy’s administration rolled out privatization and liberalization initiatives in the past three years. Do you think it is sufficient to re-balance the state dominated economy previously under the EPRDF?

There are positive signs but still some individual businesses are close to the government, instead of organized business communities under the Chamber. I do not think this is good. The government must recognize, capacitate and work with the Chamber. There are improvements regarding regulatory issues and public services. But still there is a chain of corruption in the government system. It is related to power and partisanships, which is a big obstacle that must be reduced. The government has good intentions. There are various issues studied and forwarded by the chamber and sectoral associations. Things will improve if the government reacts on those issues. If it does not start punishing corruption and avoid party affiliation and preferential treatments for selected businesses, the problem will get worse. It is the government that creates a corrupt private sector.

Corruption is also unavoidable when the public servants are paid meager salaries. The government must pay public servants sufficiently. So, corruption is high not because people are bad, or the officials are greedy, but the civil servant takes corruption as supplementary revenue.

The government also drafted a new proclamation to re-establish the Chamber. The draft proposes membership as mandatory, among others. How can a strong chamber be established? Recently, two chamber officials also defected to the US. Why is there always an internal feud inside the chambers structure?

There is a structural problem in the Chamber. It is intentionally created. Making memberships mandatory generates revenue for the chamber. But it hinders the chambers from providing quality service for their members. This was seen during the Derg regime. Immediately after the EPRDF came, it worked hard to weaken all institutions, including the chamber, teachers association, and others. The EPRDF made memberships willingly, to shrink the chamber’s revenue and finally close the chamber due to a lack of fund. But we managed to survive, by improving services and generating revenue from creative works.

Especially, the Addis Ababa Chamber became stronger, at the time, while there were some problems in the Ethiopian Chamber of Commerce. When I was about to leave, there were efforts to change the Chamber’s laws and the government wanted to re-design the Chamber, to fit to the politics.

The Chamber serves wherever there are private businesses, not government structures or political leaderships. But the government shadowed and dominated cities’ chambers, by chambers of regional states. These regional state chambers are under the control of party officials. The Ethiopian chamber also fell under the influence of party members. We tried to avoid those influences and somehow succeeded to maintain a Chamber that represents only the interest of businesses.

The proclamation tried to further divide the chamber across sectors, on top of the regional structure, dissecting the interest of the private sector. Kiosk and garage owners have different interests, but also have common interests. These specific interests should be solved under sectoral associations, and their common interest under the chamber. But what the government did is bundle the sectoral associations and the Chamber together. Businesses with different interests sat on the same table, and failed to agree. So, there is still a structural problem.

I have seen the new draft proclamation too. We are unfortunate the draft did not address the problem still. The chambers and the business community still did not reach a consensus on the draft. The Addis Ababa and Ethiopian chambers are in agreement and sectoral associations have also their won perspectives.

Chambers should work only on general issues that represent the common interests of all businesses and the economy at large, aided by sectoral associations formed separately, representing interests of businesses in specific sectors. Thus, the chamber and sectoral associations should be established separately. I do not know the status of the draft proclamation currently, but if it is ratified, it would take another generation to amend.

So, do you believe the Ethiopian chamber should be the all-encompassing strong umbrella?

Not necessarily. My point is the chamber system should be separate from sectoral associations. Whether at local, cities or a national level, chamber must be strong. But they must align. The issue of sectoral associations is completely different. For instance, leather industries have problems that can be solved both through the chamber, and their association platforms. This is the right way.

For instance, there was the Ethiopian Manufacturing Industries Association. It was challenging the government regarding manufacturer’s interests. Its strong momentum even empowered the chamber. Then the EPRDF practically dismantled it. It even prohibited the association from renting an office. The EPRDF regime never wanted such strong associations and chambers. The reason why the government overlapped chambers and sectoral associations is to deny them on common grounds.

If the draft is ratified, it only maintains the problem. Currently, the government’s system prefers individual businesses, than the organized private sector.

So the draft should be revised and discussed again?

The process of crafting the proclamation has problems from its very inception. The chamber members and business communities have no consensus on the draft. The Ethiopian, Addis Ababa, and regional chambers must sit down and discuss on the issue.

The Ethiopian government is trying to allure investments by the diaspora. If the diaspora invest and save in US banks, or in Ethiopia, which return on investment is attractive? Or do you think the government should design incentive packages for the diaspora?

Businesses in Ethiopia are more profitable than other countries. The reason the US government devised AGOA from the beginning, is because African businesses can be profitable. Even in terms of savings, the return in Ethiopia is higher than Europe or elsewhere. The problem in Ethiopia is not on returns, but convertibility. Repatriation might be difficult. Saving in Ethiopia by itself is profitable, let alone investment. There are so many profitable business sectors in Ethiopia. Many sectors are emerging, and not exploited yet.

The other problem is that the Ethiopian diaspora has lost trust in the government back home. So, the current government must reverse that perception, through transparency, commitment and service efficiency.

Thirdly, the diaspora needs information supply on feasible businesses and projects in Ethiopia. Then the diaspora can form share companies, joint ventures, PLC’s or other investment modalities. If the diaspora know feasible businesses and the laws, then they can invest. Currently, the diaspora is placing their money on the stock market and other businesses abroad. They can divert that money to go back home.

Especially, the profitability in the financial industry in Ethiopia is very lucrative; but the government should facilitate currency convertibility. Plus, most diaspora’s in Europe and the US left Ethiopia three to four decades ago. They are at s retirement age now. So if the health system in Ethiopia is improved, most diaspora’s would prefer to go back to Ethiopia.

The diaspora also wants transparent systems to complain in cases of corruption and bad services. There is corruption in Europe and the US. But it is political corruption not work corruption. Political corruption is trying to twist or influence introduction of policies, proclamations or directives. Work corruption is bribing officials, institutions, and public services. There must be a complaint window for this.

The west has been shifting away from Ethiopia and imposed sanctions. Substantial number of Ethiopians vote, especially in the US. Can Ethiopians and black Africans use their voting power to discard unfavorable officials or parties in the US or influence to reverse such sanctions?

The diplomatic system has a more crucial role in this. To be specific, the US faced unprecedented situation in Ethiopia. A government that refuses foreign pressure emerged in Ethiopia.

The US even used the UNSC to pressurize Ethiopia, meeting twelve times within six months. On top of the strong refusal of the Ethiopian government to surrender, the #nomore movement strengthened the support for Ethiopia, rallying Africans behind Ethiopia. The movement is stronger than election powers. The movement eroded US’s credibility in Africa, and in the world.

Even during calls that Addis Ababa will fall to the hands of insurgents, one million diaspora opted to come back home. I believe Ethiopia will regain its rightful place in the international stage.

Unlike any time before, the diaspora is on the same page now, regarding national issues. Before this, the diaspora’s were highly divided and turned against each other. The division created a negative energy. If the diaspora was united before, the EPRDF could have been long gone. The Diaspora and opposition figures abroad were used to strife, not unity.

Can we say that the US’s pressure is normalizing since the tension with China over the horn escalated?

Their strategy differs. The US wants to ensure its interests through political influence, while China does it through investment and economic empowering. The US’s and China’s struggles will continue, whether Ethiopia is there or not. China, Russia, Turkey, Iran and India, to some degree, are joining the friction now. They have certain interests with or against the US.

The US’s fear is not what China will do in Ethiopia, but the kind of measures Ethiopia takes. For instance, Ethiopia’s normalization with Eritrea and the alliance with Somalia is a threat for the US. When the US told Ethiopia to stop the war, Ethiopia rather turned a deaf ear. Ethiopia filled the renaissance dam, when the US opposed it. These are some of the bold moves against US interests.

These moves have nothing to do with China, but they are decisions emanating from the nature of Ethiopians. So, the confrontation between the US and China continues, while Ethiopia strides to protect and implement its national interests fully.

I do not think Ethiopia will completely shift its diplomatic ties towards China. Imperialism is always imperialism, but it changes its face. The US always wants a government that listens to them. If a government refuses to carry out their interest, they depose that government, including assassinations. In cases such as Libya, Iraq and Syria, the US’s footprints in the countries politics can be seen from afar.

The US put the same type of pressures that worked before, and in Ethiopia’s case, it has failed. But the pressure will continue. Ethiopia has passed a major obstacle. Yet, Ethiopia needs to sharpen its diplomacy more.

At what stage is your investment process currently? What are your future plans?

We are establishing the pharmaceutical factory in Ethiopia, in collaboration with highly professional pharmacists, scientists and business people in the Ethiopian diaspora. Finance, knowledge and vision are required to establish a medicine factory. If you have capital, you can buy knowledge, since it is a commodity.

Our vision is to manufacture medicine and medical equipment’s in Ethiopia and provide for Ethiopians. It is not even about profits. We wanted to improve the medicine supply shortages in Ethiopia.

We have been preparing for the past two years. We came to invest in Ethiopia, amidst the rhetoric that Addis Ababa is about to fall. Our team strongly believes in Ethiopia. Currently, we are processing the investment license.

How much is the investment?

The initial investment will take us between USD 20 million to USD 22 million.

What is your conclusion on the soundness of the Ethiopian economy, especially in post-pandemic and post-conflict endeavors?

My first impression when I came to Ethiopia after almost two decades was that all the negative narratives about Ethiopia and Addis Ababa are wrong. There is still an active economy. Across streets of Addis Ababa, day and night, residents are scrambling to buy from street vendors. This indicates to a huge demand in the economy. This is a living economy.

But it does not mean there are no problems in the economy. There is a forex shortage, industrial inputs shortages, logistics problems and others. Yet, the economy has a big potential, especially if public services are improved, corruption is eliminated and bureaucracy is improved.

Do you think the government should maintain protectionism?

The US and Europe are not afraid of protectionism. Why should Ethiopia be afraid of it? Ethiopia is eager to join the WTO. But Europe is still protecting its agriculture. The US is prohibiting import of wood, aluminum and other items, especially trump did everything to protect local industries. So, Ethiopia must also protect its industries.

After America banned Ethiopia from the AGOA, US companies left the Hawassa industrial park. If it is a local factory, they would not do so.

Before, the US’s private sector had no national interest, instead they go for profits. That is why US industries moved factories to China, in search of a cheap labor. But now, the US government is asking them to come back and create jobs in the US.

The country needs a nationalist private sector. The private sector cannot just seek profits and become a pure capitalist. It must contribute to the social wellbeing and development of the country.

Even FDI’s must be undertaken in a joint venture scheme. If it has a local element, the investment can be sustainable.

How can one balance profit seeking versus national interests? Scholars also say the psychological make-up of Ethiopians is not compatible for capitalism.

Corporate governance, labor unions and social responsibility can balance capitalism. National security should be a concern of the private sector. If there is no security, there is no transport, meaning there is no market. Drought should concern the private sector. These make the private sector become a nationalist by default.

One of the major tasks of the Chamber is to make businesses discharge their social responsibility.

Thus, your conclusion is capitalism can work in Ethiopia.

The old way of capitalism, which is seeking only profits, does not exist anymore. Of course, you are responsible for your shareholders and board members. At the same time, you have to be responsible to the society.

Why you are not investing in the banking sector rather than pharmaceuticals?

The government said it opened the banking sector for the diaspora, but still, there are unsettled problems. It said the diaspora had to invest in foreign currency. This is an obstacle.

But the major reason I joined the pharmaceutical project, is because it is a matter of professionalism. Manufacturing is difficult in Ethiopia. We have a big purpose to bring change in the medical supply shortage in Ethiopia. We will produce capsules and tablets. We will also export, once we address the domestic demand. The company will also establish an R&D wing, which will conduct studies for other firms. Most of the founders are also researchers.

Are you a chemical engineer by profession?

I studied chemistry. I also studied industrial chemistry at Bahir Dar polytechnic. I already have a factory in Ethiopia, which produces plastic and rubber. It is expanding now.

Berhane Mewa is not only the former president of the Ethiopian and Addis Ababa Chamber of Commerce and Sectoral Associations, but is also a lifetime patriot in Ethiopia’s private sector struggles against state domination in the economy. Before he was forced into exile eighteen years ago by the EPRDF regime, he took up the struggle to create an independent chamber system and a real private sector in Ethiopia.

An industrial chemist by profession, Berhane came back to Addis to process a pharmaceutical investment license, to the tune of USD 22 million. He already has a plastic and rubber factory, which he established before his exile to the US.

Despite positive signs in the politics arena, Berhane argues the chambers system is still far from defending the private sector’s interests and contributing to the economy. Ashenafi Endale was granted audience. Excerpts:

The Reporter: What was at the core of your struggle for the Ethiopian private sector?

Birhane Mewa: I was forced to leave Ethiopia eighteen years ago. The government at the time was not happy with struggle in the Chamber, to create a strong private sector. I had no political interests. But after I left Ethiopia, I became a member of Kestedemena and Coalition for Unity and Democracy (Kinijit) political parties in North America. I was the secretary in Kinijit’s international leadership wing.

After Kinijit’s leadership were released from prison, I went back to normal life and started working as a business consultant, and then as a project manager. Of course I traveled to Ethiopia in between to attend my wife’s funeral. But now, I came to Ethiopia to process an investment license.

We are in the process of establishing a pharmaceutical factory in Ethiopia, in cooperation with Ethiopians engaged in the pharmacy business in the US. In general, we are here following PM Abiy Ahmed’s (PhD) call to the diaspora.

What is the kind of Chamber you want to see in Ethiopia?

The Chamber was first established as ‘the Addis Ababa Traders Association,’ during the Emperor’s era. Then it was re-established as Ethiopian Traders Council. It was free and active in advising the government, until Derg completely changed that trend. Derg made memberships mandatory and all businesses had to pay a chamber membership fees after they get their licenses.

Derg also shrunk the number of board members representing the private sector in the council, from eleven to one. At that time, nine of the eleven board members were general managers of state corporations; with only Wubshet Werkalemahu was representing the private sector.

After EPRDF took power, the general managers of state corporations left the chamber. At the time, I was president of the Ethiopian Private Manufacturing Association. So I became vice president of the Chamber to close the vacuum. And when Kebour Gena left, I became president of the chamber, through competition.

The fundamental objective of the Chamber is to advise the government before it introduces polices that affect the private sector and the economy. The second is to provide services for the private sector including trainings, information and arbitration. We were successful on both. Both the Addis and Ethiopian Chambers won various international awards, including the ‘best chamber in Africa’ award.

Nonetheless, the EPRDF was working hard to create divisions amongst, Addis Ababa, regional and sectoral chambers and associations. I worked hard to cut out such divisions and create a stronger chamber. We also managed to get back the chamber’s assets taken by the government. We also managed to access 100,000 sq. m of land for the chamber, on which the Addis-Africa exhibition center is currently being established.

Where is (should be) the exact line between state and private sector roles in the economy?

In principle, the private sector is the backbone of the economy, especially in a free market system. But during the TPLF dominated EPRDF regime; the government tried to replace the private sector by state affiliated endowment companies and state owned enterprises, which are still under party control. They enjoy access to finance, bureaucratic support, information, monopoly and other privileges. This has been stunting the growth of the private sector. I am not sure whether the situation still changed. Party affiliations still control the media, not only businesses and the economy.

Besides those parastatals, there are private businesses parasitic on preferential treatments, provided from the parties. Preferential treatment is still given for businesses, in accessing land, finance, foreign currency, and other privileges. A real private sector, which is self-created and hardworking, is very limited in Ethiopia.

The parties and government affiliated private sectors, still prevail, only changing its face. If you look at past private businesses currently, it is not hard to find a party or state support.

The right private sector should be represented only by the Chamber. It should be free, with no political interests, but defend the interests of the private sector. When we say ‘private sector’, it includes the street vendor and Gulit, to the factory and bank owners. The similarity amongst them is that they have a business license, and a common interest. There are various obstacles that hinder the chamber.

Ethiopia’s future depends on the real private sector. Foreign Direct Investments are also necessary but the domestic private sector is critical in terms of self-sufficiency, sovereignty and retention of repatriation. FDI’s can leave anytime.

Even in the USA, the private sector supports either democrats or republicans. Can a real private sector exist without any affiliation with the ruling party?

If you go to Mercato, everyone works for their own interests. They are not paid by the government but they pay taxes to the government. What the government can do is improve and equalize the playing ground.

Of course the private sector in the US supports parties. The difference is corruption is legal in the US. It is called lobbying and it is not a crime. It is also regulated. But in Ethiopia, parties establish affiliated businesses and keep taking money. The biggest problem appears when the parties themselves engage in the business. This is the biggest problem in Ethiopia. Nobody knows where the money from public enterprises goes to.

Political parties must exit from businesses and the economy. In the US, individuals and businesses giving money to parties, is publicly known, and audited. The tax authority also knows it.

Do you think the existing private sector in Ethiopia can be changed into a real private sector, or should we start over?

A real private sector is not something we create. What the government should do is create conducive environment for a ‘real private sector to emerge.’ It is the demand and supply dynamism that creates a real private sector. There are shoe shiners who have become millionaires. Did the government create them? Of course the government can facilitate support, but without political affiliation.

PM Abiy’s administration rolled out privatization and liberalization initiatives in the past three years. Do you think it is sufficient to re-balance the state dominated economy previously under the EPRDF?

There are positive signs but still some individual businesses are close to the government, instead of organized business communities under the Chamber. I do not think this is good. The government must recognize, capacitate and work with the Chamber. There are improvements regarding regulatory issues and public services. But still there is a chain of corruption in the government system. It is related to power and partisanships, which is a big obstacle that must be reduced. The government has good intentions. There are various issues studied and forwarded by the chamber and sectoral associations. Things will improve if the government reacts on those issues. If it does not start punishing corruption and avoid party affiliation and preferential treatments for selected businesses, the problem will get worse. It is the government that creates a corrupt private sector.

Corruption is also unavoidable when the public servants are paid meager salaries. The government must pay public servants sufficiently. So, corruption is high not because people are bad, or the officials are greedy, but the civil servant takes corruption as supplementary revenue.

The government also drafted a new proclamation to re-establish the Chamber. The draft proposes membership as mandatory, among others. How can a strong chamber be established? Recently, two chamber officials also defected to the US. Why is there always an internal feud inside the chambers structure?

There is a structural problem in the Chamber. It is intentionally created. Making memberships mandatory generates revenue for the chamber. But it hinders the chambers from providing quality service for their members. This was seen during the Derg regime. Immediately after the EPRDF came, it worked hard to weaken all institutions, including the chamber, teachers association, and others. The EPRDF made memberships willingly, to shrink the chamber’s revenue and finally close the chamber due to a lack of fund. But we managed to survive, by improving services and generating revenue from creative works.

Especially, the Addis Ababa Chamber became stronger, at the time, while there were some problems in the Ethiopian Chamber of Commerce. When I was about to leave, there were efforts to change the Chamber’s laws and the government wanted to re-design the Chamber, to fit to the politics.

The Chamber serves wherever there are private businesses, not government structures or political leaderships. But the government shadowed and dominated cities’ chambers, by chambers of regional states. These regional state chambers are under the control of party officials. The Ethiopian chamber also fell under the influence of party members. We tried to avoid those influences and somehow succeeded to maintain a Chamber that represents only the interest of businesses.

The proclamation tried to further divide the chamber across sectors, on top of the regional structure, dissecting the interest of the private sector. Kiosk and garage owners have different interests, but also have common interests. These specific interests should be solved under sectoral associations, and their common interest under the chamber. But what the government did is bundle the sectoral associations and the Chamber together. Businesses with different interests sat on the same table, and failed to agree. So, there is still a structural problem.

I have seen the new draft proclamation too. We are unfortunate the draft did not address the problem still. The chambers and the business community still did not reach a consensus on the draft. The Addis Ababa and Ethiopian chambers are in agreement and sectoral associations have also their won perspectives.

Chambers should work only on general issues that represent the common interests of all businesses and the economy at large, aided by sectoral associations formed separately, representing interests of businesses in specific sectors. Thus, the chamber and sectoral associations should be established separately. I do not know the status of the draft proclamation currently, but if it is ratified, it would take another generation to amend.

So, do you believe the Ethiopian chamber should be the all-encompassing strong umbrella?

Not necessarily. My point is the chamber system should be separate from sectoral associations. Whether at local, cities or a national level, chamber must be strong. But they must align. The issue of sectoral associations is completely different. For instance, leather industries have problems that can be solved both through the chamber, and their association platforms. This is the right way.

For instance, there was the Ethiopian Manufacturing Industries Association. It was challenging the government regarding manufacturer’s interests. Its strong momentum even empowered the chamber. Then the EPRDF practically dismantled it. It even prohibited the association from renting an office. The EPRDF regime never wanted such strong associations and chambers. The reason why the government overlapped chambers and sectoral associations is to deny them on common grounds.

If the draft is ratified, it only maintains the problem. Currently, the government’s system prefers individual businesses, than the organized private sector.

So the draft should be revised and discussed again?

The process of crafting the proclamation has problems from its very inception. The chamber members and business communities have no consensus on the draft. The Ethiopian, Addis Ababa, and regional chambers must sit down and discuss on the issue.

The Ethiopian government is trying to allure investments by the diaspora. If the diaspora invest and save in US banks, or in Ethiopia, which return on investment is attractive? Or do you think the government should design incentive packages for the diaspora?

Businesses in Ethiopia are more profitable than other countries. The reason the US government devised AGOA from the beginning, is because African businesses can be profitable. Even in terms of savings, the return in Ethiopia is higher than Europe or elsewhere. The problem in Ethiopia is not on returns, but convertibility. Repatriation might be difficult. Saving in Ethiopia by itself is profitable, let alone investment. There are so many profitable business sectors in Ethiopia. Many sectors are emerging, and not exploited yet.

The other problem is that the Ethiopian diaspora has lost trust in the government back home. So, the current government must reverse that perception, through transparency, commitment and service efficiency.

Thirdly, the diaspora needs information supply on feasible businesses and projects in Ethiopia. Then the diaspora can form share companies, joint ventures, PLC’s or other investment modalities. If the diaspora know feasible businesses and the laws, then they can invest. Currently, the diaspora is placing their money on the stock market and other businesses abroad. They can divert that money to go back home.

Especially, the profitability in the financial industry in Ethiopia is very lucrative; but the government should facilitate currency convertibility. Plus, most diaspora’s in Europe and the US left Ethiopia three to four decades ago. They are at s retirement age now. So if the health system in Ethiopia is improved, most diaspora’s would prefer to go back to Ethiopia.

The diaspora also wants transparent systems to complain in cases of corruption and bad services. There is corruption in Europe and the US. But it is political corruption not work corruption. Political corruption is trying to twist or influence introduction of policies, proclamations or directives. Work corruption is bribing officials, institutions, and public services. There must be a complaint window for this.

The west has been shifting away from Ethiopia and imposed sanctions. Substantial number of Ethiopians vote, especially in the US. Can Ethiopians and black Africans use their voting power to discard unfavorable officials or parties in the US or influence to reverse such sanctions?

The diplomatic system has a more crucial role in this. To be specific, the US faced unprecedented situation in Ethiopia. A government that refuses foreign pressure emerged in Ethiopia.

The US even used the UNSC to pressurize Ethiopia, meeting twelve times within six months. On top of the strong refusal of the Ethiopian government to surrender, the #nomore movement strengthened the support for Ethiopia, rallying Africans behind Ethiopia. The movement is stronger than election powers. The movement eroded US’s credibility in Africa, and in the world.

Even during calls that Addis Ababa will fall to the hands of insurgents, one million diaspora opted to come back home. I believe Ethiopia will regain its rightful place in the international stage.

Unlike any time before, the diaspora is on the same page now, regarding national issues. Before this, the diaspora’s were highly divided and turned against each other. The division created a negative energy. If the diaspora was united before, the EPRDF could have been long gone. The Diaspora and opposition figures abroad were used to strife, not unity.

Can we say that the US’s pressure is normalizing since the tension with China over the horn escalated?

Their strategy differs. The US wants to ensure its interests through political influence, while China does it through investment and economic empowering. The US’s and China’s struggles will continue, whether Ethiopia is there or not. China, Russia, Turkey, Iran and India, to some degree, are joining the friction now. They have certain interests with or against the US.

The US’s fear is not what China will do in Ethiopia, but the kind of measures Ethiopia takes. For instance, Ethiopia’s normalization with Eritrea and the alliance with Somalia is a threat for the US. When the US told Ethiopia to stop the war, Ethiopia rather turned a deaf ear. Ethiopia filled the renaissance dam, when the US opposed it. These are some of the bold moves against US interests.

These moves have nothing to do with China, but they are decisions emanating from the nature of Ethiopians. So, the confrontation between the US and China continues, while Ethiopia strides to protect and implement its national interests fully.

I do not think Ethiopia will completely shift its diplomatic ties towards China. Imperialism is always imperialism, but it changes its face. The US always wants a government that listens to them. If a government refuses to carry out their interest, they depose that government, including assassinations. In cases such as Libya, Iraq and Syria, the US’s footprints in the countries politics can be seen from afar.

The US put the same type of pressures that worked before, and in Ethiopia’s case, it has failed. But the pressure will continue. Ethiopia has passed a major obstacle. Yet, Ethiopia needs to sharpen its diplomacy more.

At what stage is your investment process currently? What are your future plans?

We are establishing the pharmaceutical factory in Ethiopia, in collaboration with highly professional pharmacists, scientists and business people in the Ethiopian diaspora. Finance, knowledge and vision are required to establish a medicine factory. If you have capital, you can buy knowledge, since it is a commodity.

Our vision is to manufacture medicine and medical equipment’s in Ethiopia and provide for Ethiopians. It is not even about profits. We wanted to improve the medicine supply shortages in Ethiopia.

We have been preparing for the past two years. We came to invest in Ethiopia, amidst the rhetoric that Addis Ababa is about to fall. Our team strongly believes in Ethiopia. Currently, we are processing the investment license.

How much is the investment?

The initial investment will take us between USD 20 million to USD 22 million.

What is your conclusion on the soundness of the Ethiopian economy, especially in post-pandemic and post-conflict endeavors?

My first impression when I came to Ethiopia after almost two decades was that all the negative narratives about Ethiopia and Addis Ababa are wrong. There is still an active economy. Across streets of Addis Ababa, day and night, residents are scrambling to buy from street vendors. This indicates to a huge demand in the economy. This is a living economy.

But it does not mean there are no problems in the economy. There is a forex shortage, industrial inputs shortages, logistics problems and others. Yet, the economy has a big potential, especially if public services are improved, corruption is eliminated and bureaucracy is improved.

Do you think the government should maintain protectionism?

The US and Europe are not afraid of protectionism. Why should Ethiopia be afraid of it? Ethiopia is eager to join the WTO. But Europe is still protecting its agriculture. The US is prohibiting import of wood, aluminum and other items, especially trump did everything to protect local industries. So, Ethiopia must also protect its industries.

After America banned Ethiopia from the AGOA, US companies left the Hawassa industrial park. If it is a local factory, they would not do so.

Before, the US’s private sector had no national interest, instead they go for profits. That is why US industries moved factories to China, in search of a cheap labor. But now, the US government is asking them to come back and create jobs in the US.

The country needs a nationalist private sector. The private sector cannot just seek profits and become a pure capitalist. It must contribute to the social wellbeing and development of the country.

Even FDI’s must be undertaken in a joint venture scheme. If it has a local element, the investment can be sustainable.

How can one balance profit seeking versus national interests? Scholars also say the psychological make-up of Ethiopians is not compatible for capitalism.

Corporate governance, labor unions and social responsibility can balance capitalism. National security should be a concern of the private sector. If there is no security, there is no transport, meaning there is no market. Drought should concern the private sector. These make the private sector become a nationalist by default.

One of the major tasks of the Chamber is to make businesses discharge their social responsibility.

Thus, your conclusion is capitalism can work in Ethiopia.

The old way of capitalism, which is seeking only profits, does not exist anymore. Of course, you are responsible for your shareholders and board members. At the same time, you have to be responsible to the society.

Why you are not investing in the banking sector rather than pharmaceuticals?

The government said it opened the banking sector for the diaspora, but still, there are unsettled problems. It said the diaspora had to invest in foreign currency. This is an obstacle.

But the major reason I joined the pharmaceutical project, is because it is a matter of professionalism. Manufacturing is difficult in Ethiopia. We have a big purpose to bring change in the medical supply shortage in Ethiopia. We will produce capsules and tablets. We will also export, once we address the domestic demand. The company will also establish an R&D wing, which will conduct studies for other firms. Most of the founders are also researchers.

Are you a chemical engineer by profession?

I studied chemistry. I also studied industrial chemistry at Bahir Dar polytechnic. I already have a factory in Ethiopia, which produces plastic and rubber. It is expanding now.

Aklilu Wubet is a veteran in the banking industry. He joined Wegagen Bank on March 2020 as the Vice President of Corporate Service, having served in different capacities in many financial companies, including the Commercial Bank of Ethiopia, in the last 25 years. He was also the deputy CEO of Nile Insurance, Bank of Abyssinia and Lion Bank, and also served as a lecturer at Addis Ababa University.

The Reporter’s Samson Berhane sat down with Aklilu to reflect on his journey at Wegagen and the challenges ahead, as the acting president attempts to bring the bank back to its usual top status it has held for the last two decades. Excerpts:

The Reporter: You have joined Wegagen during a challenging time, when it faces decline in revenue from different sources particularly due to the tense political situation in the country. How are things going since you joined the Bank?

Aklilu Wubet: Banking is always challenging, especially in a world where resources are limited. And leadership is critical during a challenging time. Leading a company during its challenging moments is a great task and makes me happy. Especially, if you have strong team, challenge is a good thing. One thing you should also understand is that Wegagen is still a very strong bank, despite the challenges it has faced.

When I decided to join the Bank, I was confident that I would overcome all the challenges by working with a strong management and team the Bank has. The conflict has impacted all commercial banks. Peace is very important for the industry than any segment of the economy since banks deal with liquid resources. The impacts of the war, in particular, were severe on us because we are among the financial institutions with large number of branches in the areas affected by conflict.

When I joined Wegagen, my priority was to help the Bank withstand the impacts of the war. That requires being prudent and to closely work with regulatory bodies, investors and other stakeholders.

In the last 25 years, Wegagen was among the most profitable financial institutions in Ethiopia. Why was it not solid enough to withstand the shock brought on by the war in Northern Ethiopia?

To begin with, the Bank has been effective in withstanding the impacts of the war. Even though the profit is low, and has declined drastically, it is still profitable. It still has a large customer base and a huge amount of assets. Thanks to the strong base, which the bank is built on; it has been successfully coping with the conflict, even though more than a third of its branches are closed.

The profitability of the Bank in the last two decades has helped it build its asset base, enabling it to withstand the impacts of the war. The rules of the central bank and its strong regulations have had its contribution in enabling us to remain strong in such a challenging period.

The strong expense management that we have applied and the strong marketing system implemented by our management team has also contributed to the success of the Bank. If it was not due to such factors, the history of the Bank would have been ruined. But thanks to our efforts, we have defied the prediction made by some, who have forecasted that we will face a loss due to the war. But we are still in a good shape.

We have devised a strategy and are also undergoing restructuring, and increasing the number of vice presidents we have. We are still among the big players in the industry, hiring elite bankers.

According to industry insiders, the bottom line in the banking industry is profits and shareholders’ return. How did you come to the conclusion that the Bank is in a good shape, while its profit dwindled from one billion birr to 193 million birr?

Business is not only about making profits. Business is about being sustainable and staying competitive in an industry. The conflicts, coupled with macroeconomic challenges, have impacted the banking industry last year and banks would have profited much higher than they did, if there was peace.

Wegagen has declared a positive profit, while much of its branches are closed, and at a period when it was not able to collect loans given to businesses operating in war-affected areas. We even held a provision in case of loan defaults. We did not use a penny from the capital invested by shareholders, despite being in the midst of series of challenges. Overall, our objective was to make Wegagen the bank of all Ethiopians, by making it solid. I believe we have been successful in doing that.

There are critics that say Wegagen is a victim of an undiversified ownership structure which exists in the banking industry. Even though Wegagen is not the only financial institution established based on affiliation or along ethnic lines, some say its recent underperformance is an outcome of lack of diversification in terms of shareholders and customer base. Do you agree?

There are those that say banks are established based on affiliation.

Is that not the reality?

I cannot be sure because I have not had a chance to look through the list of shareholders of each commercial bank. In case of Wegagen, the story is different. Wegagen is wrongly misunderstood. If you see its shareholders, no bank is as Ethiopian as Wegagen. Its shareholders are highly diversified. Many big investors from different ethnic backgrounds have a stake in Wegagen. Name any investor and they are a shareholder of our bank. If you see the board, it is highly diversified. The same is also true if you see the management.

Did you bring that change?

No. I was the vice president 13 years ago at Wegagen and it was the same back then.

Okay, but in case of customer diversification, the reality is opposite to what you have said since the Bank’s profit declined drastically, when a third of its branches closed in one region. So is it not obvious that your bank did not work on diversifying its customer base?

Not only in Tigray. We also have many branches in Gambella and Somali than any other private banks. Of course, we have many customers in Tigray but that does not mean our customers in other areas like Addis Ababa are from the same region. We have over 2.5 million customers, way higher than the adult population eligible for banking services in Tigray. That shows how diversified our customer base is.

How about loan disbursement?

It is the same. More than 75 percent our loan portfolio is in Addis Ababa. However, in terms of deposits, the northern part of Ethiopia is known for being a big source. If you go to Mekelle, many commercial banks have many branches there. Some have more than seven or eight branches and the reason is obvious. This is because there is a good saving culture there. But that does not mean we have to work on the business mix because it is important to manage risks.

Then how did your non-performing loans surge because of the conflict if your borrowers are diversified?

We have provided five billion birr in loans to our customers in Tigray. We don’t know whether it can be paid or not because of the conflict. But that is enough to increase our non-performing loans. The whole industry faced similar problems because of the same reason. We held provisions in case of defaults. If it was not due to the higher provision we held, our profit would have been over one billion birr. That would be added to our income in the future, if we recover our loans. This means that we are investing in our future and if things go smoother and peace prevails, we hope things change drastically.

How is the liquidity position of Wegagen Bank? How capitalized is the bank?

We have a strong capital base. It used to be one of the largest in the industry, though some overtook us recently. Understanding its importance, our shareholders decided to raise the Bank’s paid-up capital to six billion birr before the end of the new deadline set by the central bank. We are also thankful that we don’t have a major shareholder because that gives us room for the management to do its job.

Regarding liquidity, when the central bank raised the reserve requirement from five to 10 percent, many feared that our bank would be among those that cannot meet the new threshold. But we are among the few banks that have fulfilled the requirement first. Our liquidity is now over 17 percent. However, that does not mean we are not facing liquidity shortages, because the whole industry is experiencing similar problems due to the sluggish growth of deposits.

Shareholders want to know when the bank would reach pre-war levels in terms of profitability. When do you think that would happen?

There are two assumptions. The first assumption is that the war would stop, peace would prevail and the government puts its energy towards the economy, a scenario which would benefit the banking industry. If peace prevails, our closed branches would be opened. We will be fully operational and our deposits would surge.

The second assumption is that if the conflict continues, we will operate with our existing resources and branches that are active. New banks are joining the industry. So I am sure we can perform better even with our active branches. We have already devised a strategy to mobilize more resources. We are hopeful that we will return to pre-war levels by the next general assembly.

Founded in September 2017, Eshi Express is a pioneer and one of the successful startups in tech-based delivery businesses, in an emerging business frontier in Ethiopia. Tigabu Haile, co-founder and CEO of Eshi Express sat with Ashenafi Endale of The Reporter, to talk about his business journey.

Excerpts:

The Reporter: What was the business pitch behind Eshi?

Tigabu Haile: If you buy an avocado in Yirgalem, it is around five birr per kilogram. But in Addis Ababa, it is around35 birr. So, we believed that Ethiopia needs an efficient logistics system in the supply and logistics service. Even in Addis, we do not see companies that provide end-to-end payment systems, sourcing and delivery services.

Sending packages in Addis is expensive. There are players like DHL, the Post Office and individual motorcycle owners. But Eshi can provide the service up to 50 percent cheaper than the market.

Basically, Eshi is a logistics company. So, how do you manage your fleet? What are the types of services you provide?

We have three types of services. We have Express service, in which we deliver any package in Addis within 90 minutes. The second type is delivery in half a day. If you order in the morning, we deliver in the afternoon. We charge 90 birr anywhere in Addis. The third category is delivery in 24 hours, which costs 70 birr anywhere in Addis.

Our main operation is in Addis. We use vans, pickups, motors and other types of vehicles. Most of the Ethiopian population is in the regions. We believe the logistics problem in the supply chain can be best addressed if we expand to regional states. Currently, we have been in the piloting phase in Adama and Hawassa, since last year. We will reach other regions in the next two years.

Do you own the whole fleet of vehicles?

We deployed the hybrid model. Around ten motorcycles and a van are owned by Eshi. But owning many vehicles is not feasible, so we stopped purchasing vehicles. We launched a technology six months ago, that enables any individual vehicle owner to register to our platform and deliver packages. Our model is called ‘from foot to fleet’. People can deliver on foot. Especially when we have big events, mass publications and other large deliveries many individuals deliver on foot.

How can these individuals or private vehicle owners access your platform? Is the technology similar to a taxi hailing platform?

It is almost similar but slightly different regarding registration system and insurance policies. Huge packages might be damaged in transit by individual vehicle owners. So, we always require courier insurance or insurance for goods in transit, for any private vehicle who works with Eshi.

How many vehicles that are not owned by Eshi are working with Eshi?

Right now we have more than 25 vans, pickups and different vehicles. There are also around fifteen motorcycles.

How many packages does Eshi deliver per day? How do you evaluate the demand?

The demand of the service is huge. There are thousands of delivery demands daily in Addis, while it is in the hundreds of thousands in the regions. The hard task is to make people use Eshi just once. Then they cannot stop using it.

Right now, Eshi delivers close to 115 packages per day. In the next three years, we plan to deliver thousands of packages daily.

How do you see the competition from other players in the market?

There is no really established company we see as competitors. There are legacy players like the DHL, Ethiopian Postal service, and individuals who have motorcycles. It is difficult for many startups to emerge and become competitors in this business.

Online payment, e-tax, e-commerce, delivery and packaging are involved in the business. How are these all done as one business?

Right now online transactions can happen but there are no e-receipts. It is impossible to make online transactions now. Payment is possible for internet and mobile banking. But if you cannot provide e-receipts, you cannot have a complete e-commerce transaction. There are shops that have an online presence. They just show their packages on their sites.

Does Eshi own warehouses or source from other suppliers?

Eshi collects the packages from companies who have warehouses. Receipt is issued traditionally. So, e-commerce is a work in progress. Eshi is the instrument that provides the logistics service. We do not sell any stuff online. Shopping happens between the customer and e-commerce companies. Once the order is placed and shopping done, either the customer or the e-commerce company orders Eshi to deliver the goods.

The number of e-commerce companies has increased since the COVID-19 pandemic. Has online delivery orders increased too?

E-commerce is taking off in Ethiopia and the government is also nearing to ratify the e-transaction law. All Shops will have an online presence. The outsourcing culture in Ethiopia is immature. Most companies want to do the e-commerce and delivery businesses by themselves. One company, especially startups, cannot handle both at the same time. So, after trying both for a year or two, they fail or specialize only in one.

Currently, big global e-commerce players are coming to Ethiopia. Probably they will launch in the next six months. Eshi has entered agreements with these global players, to do the delivery part. E-commerce companies should focus on what they can do best, because they cannot do it all, with limited time, energy and resources. We want to support their job, from the delivery side.

We will have many package drop-off points soon. If the customer is not at home when the delivery arrives, the drivers can place the packages at those points and the client can take it at anytime. This way, we are planning to drop many deliveries within one kilometer radius. This reduces our cost. That is why we charge 50 percent cheaper than the market. One delivery vehicle can cover many shops, pharmacies and supermarkets within an area.

Does Eshi plan to deliver beyond Ethiopia?

Ethiopia will operationalize the Africa Free Trade Agreement (AfCFTA) soon. Intra-Africa trade will boom in the near future. Eshi plans to become a Pan-African Delivery Company within the next three years.

Lack of automated addressing is a major bottleneck to delivery businesses in Addis. How are you solving it?

Absence of digital address system is a major problem for social services, health, banking, census, elections, apart from delivery business. Address is critical. If you do not have an address, you do not exist. Due to the lengthy communication between our delivery dispatches and clients, and usually missing locations, Eshi is losing resources, time and energy. The customer experience is also bad, because it is annoying when delivery personnel call repeatedly to find the address.

Currently, we have a project in the pipeline, named Eshi Locator, with our technology partner. It gives a code to each house’s. The codes are regenerated, when our partner localize using Google technology. We will imbed Google generated codes into our technology. It will take some time. Right now we are using Google maps, to locate the customer. But this has accuracy problems. Many things should improve to solve the location issue. Eshi Locator will be the solution.

What about using GPS locations or networks, if the customer uses a smart phone?

There are four mechanisms to order on Eshi Express. Customers can order on our website, use an application in Play Store, or call on one of our call centers. For Customers who have mass orders, like event organizers, big corporate or ecommerce companies, we have a separate technology platform, which can receive bulk orders and integrate it to our fleet system.

How much is the profit?

We cannot say it is profitable, even after staying four years in the business. At least we have survived, because we could also fail. The global data shows, less than two of ten startups celebrate their fifth year of establishment. Initiating and running a startup is very difficult. Access to capital is one of the biggest problems.

Was Eshi an angel investment?

Initially, Eshi was founded by me and my partner, who has similar business ideas with me. Eshi started with 1.3 million birr. We saved up the capital. We have also advisors. Last year, the Addis Ababa Angel Investors Network invested in Eshi. Delivery business is a capital, technology and skill intensive venture. You need to hire highly talented people. You have to scale-up fast. We hope the profit will come soon, once our delivery capacity grows.

So the angel investors are shareholders now. How much did they inject in the company?

We have an agreement not to disclose the amount. They injected the capital and immediately became shareholders. We gave them equity share worth their capital injection.

So return on investments has not come to fruition yet?

It will take time, especially with startups like us, in which you have to hire huge staff. No question, we are solving one of the top five challenges in Ethiopia. Lack of efficient logistics in the system is a major reason behind the rising inflation in Ethiopia. Food is being wasted because it cannot reach the market. For instance, there is surplus in the southern part of Ethiopia, while it is extremely scarce in the northern part of the country. That is because we do not have a robust logistics system.

Eshi still needs more cash injections to scale-up its capacity. Delivery is not only about packages, it is about the stories behind the packages. For instance the national blood bank of Ethiopia is one of our customers. We deliver blood every day. We collect blood from donation centers to the national blood bank. People are living because of that. NEBE is also among our customers. We did almost all deliveries in the past national election. We are behind the success of many big achievements. We are becoming instrumental in delivery in Ethiopia.

How many institutional customers do you have?

Currently it is close to 35. For instance, we deliver laboratory results for hospitals, on a daily basis. Embassies, hotels, optical shops, are some of them.

What are the incentives provided by the government for delivery companies, such as allowing duty free import of vehicles?

The government is not providing any support or incentive for delivery companies. There were no private courier service providers in Ethiopia, for long. So, only the Post Office and the DHL were known in this business.

For instance, driving motorcycles has been banned under the State of Emergency since some individuals might use motorcycles for crime. But Eshi had hired many staff, branded the motorcycles and there is no way motorcycles registered under delivery companies can be used for crimes. After all, we are delivering critical packages like blood and other essential services.

Secondly, there is an extreme lack of clarity among government institutions, regarding delivery businesses. Especially, the tax authorities are creating major obstacles to delivery companies. The government has no clear policy on delivery businesses, let alone support incentives. The delivery sector could not grow in Ethiopia, because the government has failed to understand it as a newly emerging sector.

There is the Ethiopian Couriers Association, to which Eshi Express is the board president. The association is trying to change the grim fate of the sector. We have submitted a letter to the government, asking the ban on motorcycles of delivery companies to be lifted. But the response from the government is slow.

Motor cycles cannot move after 6PM. So, we are forced to stop taking orders after 4PM. Otherwise, we cannot deliver last minute orders until the next day. This is especially affecting food delivery courier companies, because there orders are largely during dinner times.

What is the government’s response to the associations’ letter?

It has been three weeks since the association submitted the letter. But the government says it is still being considered. The letter was submitted to the Addis Ababa traffic management office. The city transport bureau has also failed to respond.

A new logistics regulation allows up to 49/51 partnership with foreign logistics companies. Is Eshi considering a joint venture with foreign companies?

JV is allowed for logistics companies engaged in sea, air and land transport. Ours is light package and fast delivery logistics. So JV is not allowed for us.

How much does the absence of e-receipts affect your business? How does Eshi cover the costs, if delivery is defaulted?

Online ordering, online payment, and e-receipts are not active at a national level in Ethiopia. Ethiopians consider online shopping, or e-commerce, as a luxury service reserved only for developed countries. That is acutely wrong. Delivery services extremely benefit developing countries. The purpose of e-commerce is to cut expenses and reduce prices. Companies do not have to open shops everywhere. So, it cuts out rental costs. End user customers also usually visit as many shops, to find a reasonably priced good. With e-commerce, you can find any items at your fingertip. You can order a delivery company, saving your time, energy and money.

The progress slows in Ethiopia, because the digitization pace is slow. But the Parliament is currently working on the e-transaction proclamation. The draft document has been under review for a year now. The Ministry of Science and Technology crafted the document and the Council of Ministers has passed it on to the Parliament. It was said that it would be ratified before the current Ethiopian year enters. But I think it is delayed because the government is busy due to the war.

But even after the proclamation is ratified, is there the technology that interfaces with the payment facilitator, end user, delivery companies, shops, tax authority and other regulators?

Eshi has end-to-end technology that enables the ordering and tracking of goods. The technology also enables us to publish the transactions in excel or PDF file formats.

E-commerce companies also have a similar technology. Ethiopia has all the basic ingredients to kick start e-commerce. We have the laws, graduates, and emerging e-commerce companies. The service quality will improve gradually.

Does Eshi use other payment mechanism like mobile money, tele birr and others, apart from e-commerce companies?

So far, our transaction is largely cash-based. But we are integrating with Fintechs like tele birr, CBE birr and others.

The starting price for delivery of a kilogram of package is 20 birr. It increases by12 birr per additional kilometer and three birr per additional kilogram.

How do you evaluate the competition with other emerging delivery companies?

It is difficult to say there is stiff competition. There are delivery companies that participate in bids with us. A lot of institutions like banks float bids for their bulk delivery contracts. There are only close to six active players.

The DHL, the Ethiopian Postal Service and Balderasu are active in Addis, while there are other startups emerging in regional delivery services. The DHL has no interest in the domestic delivery business in Ethiopia, leaving the market in Addis for us. Even in Europe, DHL works with local companies, specializing on the international market rather.

Close to 100,000 packages are delivered in Addis Ababa every day. Eshi, which delivers 115 packages per day, is comparatively better performing, than other players. Yet, the share of delivery companies is completely insignificant, relative to the demand.

All of close to six delivery companies in Ethiopia, including DHL and the Post office, are delivering less than 6,000 packages per day. The market is untapped.

The delivery demand in regional states is much higher than Addis. We have assessed the demand and mapped delivery services in 100 cities in Ethiopia. There is close to 200,000 package delivery demands in these cities.

Who is filling this demand now?

This demand is bridged traditionally. The Postal Service has some market share, but mostly; people send packages via cross-country buses. But this method of delivery has two major problems. First, it has no insurance if the package is damaged and second, the bus owners charge as they wish. Cross-country busses have no standard pricing for delivering packages.

Eshi is 100percent insured. When a client orders Eshi to deliver a package, the customer declares the value of the package. If it is damaged, Eshi refunds 100percent of the value stated.

Do you work with all insurance companies?

The local insurance industry is underdeveloped, thus, local insurance companies usually do not accommodate our insurance packages. So, we cover the insurance fund by ourselves. Eshi has been incurring cost due tothis. But now, we are communicating with insurance companies. All other delivery companies operating in Ethiopia do not have such insurance coverage, except for Eshi.

Is Eshi using its own vehicles for the piloting phase in Adama and Hawassa?

We deploy our own vehicles to deliver high risk packages. But usually, we use private vehicles which have insurance coverage.

Which sectors have high demand for delivery services, is it exporters, households, or wholesalers? And Ethiopia is ranked low on the logistics index. How can delivery companies improve this?

Our business is last mile delivery. We deliver from shops to end users, or consumers. Last mile delivery is the most difficult business in a given economy. One is due to a lack of precise addressing technology. It is also the most expensive logistics system. So the demand could be consumer goods, medication, and invitation or gift cards.

Last mile delivery also creates job opportunities. Millions of youth can deliver goods door to door. So, it is the best logistics sector for job creation. If we could make the delivery price cheaper, it can activate the economy, and affect millions of lives positively. It is a phenomenal sector.

By how much rate is Eshi growing from a startup to a large enterprise?

Our package delivery business size is growing at close to 10percentper month. It is not an impressive growth but we are making good progress.

We plan to grow by 15 percent on a monthly basis. Comparatively, Eshi is growing faster, because most of the delivery companies operating in regional states are highly affected by the conflict in Ethiopia.

How much does Eshi deliver in Adma and Hawassa?

Our delivery in these towns is just a couple of packages per day, for now.

But Blood Bank, the NEBE, Goh Betoch, Nile Insurance, Ramada hotel, hello market, and Ethswitch are some of our major institutional clients across the country. We do cash-up-on-delivery for our customers. We also provide full insurance coverage, which no delivery company does in Ethiopia. We also have warehouse for e-commerce companies.

Does Eshi directly buy goods and deliver?

Usually customers order e-commerce companies to supply the good. Then the e-commerce company orders us to deliver the packages to the customer who has placed the order. Hence,Eshi does not purchase the packages. The package is purchased by the e-commerce company. Since the customer cannot pay online, we collect the payments and give it to the companies, usually on a weekly basis.

If we directly engage in buying and delivering, it will take a huge capital. The e-commerce companies have the packages and the digital presence. I believe e-commerce should be much cheaper. Some e-commerce service providers give up to 15 percent discount, but the business is just taking up in Ethiopia. It is at very early stage.

Eshi does not want to play the role of e-commerce companies. If there are 40 e-commerce companies in Ethiopia, we do not want to become their competitors. Rather, we want to deliver their packages. But if there are packages not found in e-commerce warehouses and if Eshi can find those goods, we can supply it directly to the customer. Under this circumstance, we receive orders of packages worth less than 2,000 birr.

English Version News

Suzuki vehicle prices explode, shaking up the automobile industry

Yoseph Asfaw, a mid-level manager of one of the branches of Bunna Bank, was excited when he learnt he was eligible to take out a two million birr interest-free loan, courtesy of the performance his branch achieved last fiscal year. He did not hesitate to take the opportunity. After a few weeks of deliberation about what to buy with the money, he decided to purchase a vehicle. His choice was the 2022 model of the Suzuki Dzire, the most sought-after automobile in the car market. He was asked to pay 1.5 million birr.

“Are you sure I will recoup the money within a short period of time,” Yoseph asked the car retailer.

“Trust me, give it one month, and the price will surpass two million birr,” the retailer replied.

The trader was right. The price of Dzire 2022 has shot up to 2.2 million now, a development that helped Yoseph net a profit of 700,000 br in just a month. “You cannot get this money by saving or opening a trade store. And not surprising at all, given the volatility of the market,” said the banker, adding, “I don’t want to sell it as this is a treasure whose value appreciates every second, and the most profitable venture without adding value.”

It is not unusual to see the price of vehicles spike in Ethiopia. Cars are believed to be a big treasure, the same way apartments or houses are. A car costing less than USD 2,000 in neighbouring countries, the Toyota Vitz, costs nine times more in Ethiopia. The high tax on old cars, which could reach 500 percent, was used to justify the hike. Though the same is true for old cars now, the story is different in the case of new vehicles, a category given to automobiles produced within three years of imports.

Three years ago, the government introduced a new tax law to encourage the imports of new cars while discouraging the old ones. Such a reform was meant to make new cars cheaper, though it was a target that never materialized. A case in point is the Dzire 2022, an automobile imported through a duty-free scheme and flooded the market, along with other brands of Suzuki, including Espresso and Swift.

Toyota is still the dominant player in the vehicle market, though traders say Suzuki is now commanding the lion’s share, probably as high as 60 percent in the last two years. It is partly because the cost of new Toyota vehicles is higher than in the past, as older ones were less costly. For the same reason, Suzuki is the most preferred brand for importers now because the lower the cost, the lower the amount of foreign exchange importers needs to get.

“We get the forex from the parallel market with a premium, as banks barely cover the cost of the imported cars. Suzuki has become a preferred option for many importers as it is less costly and brings a better return with a higher profit margin than Toyota, which is expensive and requires a tiresome process to get the forex needed to import it from countries like Dubai,” said an importer.

Last year saw a spike in demand for new vehicles, largely due to the huge amount of finance availed by banks to borrowers eligible to take a loan to buy automobile. During the third quarter of the last fiscal year, 330 million birr was imported, twice what was imported in the preceding quarter. It is also 20 percent higher than what was imported during the same period in 2020/21. The increase is the outcome of the growing demand in the market, according to retailers. But that comes with a cost.

“The demand is way higher than the supply. We are receiving orders more than what is available in our stock,” said Ezra Hailemariam, marketing manager of Tamrin, one of the major market players in the car market and known for importing Suzuki brands.

The change in the global market has also contributed to the spike in price, according to Ezra.

“Over 90 percent of Suzuki cars are imported from India, which is not producing much now due to a shortage of inputs because of the tension between China and Taiwan, which is the major supplier of semiconductors for the factory in India,” Ezra added.

According to a senior company official, Maruti Suzuki said “it could not produce 51,000 units in the April-June quarter owing to the ongoing chip shortage situation.”

India’s largest carmaker, which sold 1.4 million vehicles this year, underscored that the semiconductor shortage is a challenge in planning its production activities.

“The electronics component shortages are still limiting our production volumes. In this quarter (Q1), the company could not produce 51,000 vehicles,” said Maruti Suzuki India (MSI) CFO Ajay Seth in an interview with a local media in India.

The scope of the fighting between government forces and militants of the Tigray People’s Liberation Front (TPLF) along the border of the Tigray region has widened with both sides acknowledging that the conflict has spread to more areas in addition to the area where it initially erupted. The fighting between government and TPLF forces resumed on August 24 after a five-month lull. Though combat had been heaviest around the southeastern border of Tigray, TPLF militants have pushed into the neighboring Amhara and Afar regions, sending residents fleeing. Clashes on the ground and air raids over Tigray have poured cold water on the efforts underway since June to find a peaceful solution to the 21-month war that began following an attack on federal army camps based in the region. The warring sides have accused each other of firing first and shattering the months-long relative calm that has been prevailing in the northern part of Ethiopia following the federal government’s announcement in March of a truce to allow humanitarian aid to be delivered to Tigray.

The federal government has also blamed what it calls the west and Ethiopia’s “historical enemies” for using the TPLF as a Trojan horse to advance their evil design on the nation. Ever since the administration of Prime Minister Abiy Ahmed (PhD) commenced a military operation in Tigray in November 2020 in response to attacks on the Northern Command of the Ethiopian National Defence Forces (ENDF) the country has been subjected to unprecedented pressure at the hands of Western governments, the U.N., mainstream media, think-tanks and rights groups. The U.S. particularly has sided with the TPLF, slapping a slew of sanctions on Ethiopia and withdrawing its benefits under the United States’ tariff-free African Growth and Opportunity Act (AGOA) while it gave the TPLF a slap on the wrist. Furthermore, the U.S. and its allies at the U.N. Security Council have tried over a dozen times to formally admonish Ethiopia but failed thanks to the vote of China, Russia and India. Apart from exerting undue diplomatic pressure, the West has also been waging an information warfare against Ethiopia through a disinformation campaign undertaken by the mainstream media, think tanks and so-called rights advocacy organizations. Its end-game, as some analysts plausibly argue, is to engineer a regime change or if that does not work to coerce Prime Minister Abiy’s administration into accepting to the demands of the TPLF.

It’s not only over the Tigray conflict that the West is pressurizing Ethiopia though. The filling and operation of the Grand Ethiopian Renaissance Dam (GERD) has been a bone of contention between Ethiopia, whose highlands supply more than 85 percent of the water that flows into the Nile River, and the lower riparian states of Sudan and Egypt. In 2020 the U.S. tried to force Ethiopia into signing a binding agreement on the filling period. The Ethiopian government declined to sign-off a U.S.-drafted agreement regulating the filling time of the dam, which Egypt insisted should be completed over 12-21 years, saying it has the right to fill the dam at its own pace and would do so in no more than seven years. Although Sudan initially supported the building of the dam, since then it has taken Egypt’s side on the ground that filling the dam without the agreement of downstream countries imperiled its national security. Again the Security Court, at the behest of Egypt and Sudan, convened on several occasions to consider a resolution calling on Ethiopia to cease filling the GERD’s reservoir and pushing for a binding agreement between the three sides on the operation of the dam but failed to adopt it.

The West’s motives driving its pressure campaign on Ethiopia, its long-standing regional ally, are purely self-centered and zero-sum. It is wary of Ethiopia’s pursuit of an independent foreign policy, which may very well frustrate the accomplishment of its strategic goal in the Middle East and Africa. First, Ethiopia’s apparent reluctance to do toe the West’s line has been perceived to make it harder to protect the interests of Egypt—the cornerstone of its Middle East policy. Second, its attempt to thread a needle as animosities between the West and China ramp up is not appreciated by the West, which feels threatened by Beijing’s growing clout on the global stage. Given Ethiopia has been a beacon of black Africans’ struggle for freedom and could inspire continental resistance to neo-colonialism, the West might deem that forcing Ethiopia to forsake China is instrumental in containing the influence of its top geopolitical rival in Africa.

The West better realize that the essentially undemocratic and unipolar global world order that had prevailed over the last several decades following the end of the Cold War is ebbing. As a country that has never been colonized and is home to a fiercely patriotic people, Ethiopia will never cave in to the West’s demands. Needless to say this requires on the part of the federal government to develop and implement a robust diplomatic policy aimed at nullifying the threat posed by its historical enemies through a variety of tried and tested mechanisms. Some of the steps it can take in this regard include forging a compromise with its adversaries where possible and failing that to foil their destabilizing policies and measures. Ethiopia has the capacity to find a resolution to the political crisis engulfing it. Any nation or organization which has its interest at heart should stop meddling in its domestic affairs and instead support it in seeking enduring solutions.

The abrupt eruption of fighting between government forces and militants of the Tigray People’s Liberation Front (TPLF) along the border of the Tigray region this Wednesday has left Ethiopians apprehensive and disheartened. The resumption of active hostilities shatters the months-long relative calm that has been prevailing in the northern part of Ethiopia following the federal government’s announcement in March of a truce to allow humanitarian aid to be delivered to Tigray. Predictably the warring sides have blamed each other of provoking the hostilities. The Ethiopian government has accused the TPLF of striking first, saying it had “destroyed the truce”. In a statement it issued on the same day the Government Communications Service said, “Disregarding the numerous peace options presented by the Ethiopian government, the armed wing of the terror group TPLF, pushing with its recent provocations, today committed an attack” around southern Tigray. The TPLF though has said government forces and their allies had launched a “large scale” offensive towards southern Tigray early Wednesday after a months-long lull in fighting, adding its forces were defending their positions in the southern front.

The lead up to the current round of conflict portended the escalation of the now 21-month civil war. War drums were repeatedly being beaten with all the sides in the conflict issuing statements pointing to the outbreak of an impending war. The TPLF said on several occasions that the peaceful path to resolve the situation was not working and that it was considering “other options.” The government of Ethiopia on its part accused the TPLF of engaging in extensive military mobilization in preparation to restart the war and called on the international community to condemn the terrorist-designated organization and dissuade it from its ill-fated move. The government of neighboring Eritrea, whose troops have been operating in Tigray since the war began, also pointed the finger at TPLF for plotting to launch attacks on the country to reclaim lost territory.

Since November 2020, the bloody war has exacted a heavy humanitarian toll and ravaged the nation’s economy. In addition to the tens of thousands killed and injured, millions more were displaced, psychologically traumatized and left needing emergency food assistance. Social and economic infrastructure has been totally or partially damaged, including schools, universities, health institutions, and other facilities in the Tigray, Amhara and Afar regions. The economy has taken and continues to take a battering. Its growth, which stood at around 10 percent annually before the conflict, has contracted by half; scores of industries have been damaged while some investors have suspended or totally quit operations, resulting in a surge in unemployment; the undoubtedly huge sums of foreign exchange the war has eaten up has contributed to its dearth at levels rarely seen before and to driving inflation higher. Although it’s difficult to quantify the true cost of the war, the destruction is sure to have cost Ethiopia billions of dollars.

The renewed conflict comes as efforts underway since June following the establishment of a government-appointed committee tasked with starting peace talks hit a snag. The government’s announcement in late July that it was ready to hold talks with the TPLF “anytime, anywhere” and the TPLF’s expression of its willingness to ending the war through peaceful means raised the prospects of peace. The apparent readiness of the two parties to engage in peace talks was hailed as an important initiative locally and by the international community. However, both sides have laid down preconditions that they say must be met prior to the commencement of talks—the declaration of a formal cessation of hostilities in the case of the Ethiopian government and the resumption of basic services to Tigray by the TPLF. They also disagree on who should lead negotiations, with the government demanding that the African Union oversee the process but the rebels insisting that outgoing Kenyan President Uhuru Kenyatta should chair it. While we are not apportioning blame here it’s disappointing to say the least that war has broken out again due to the inability of political leaders to do whatever is necessary to prevent it.

War is generally regarded as something that cannot guarantee a win-win solution to political conflicts. This said some contend that war is not necessarily the worst option as long as it fulfills certain considerations that lend it moral acceptance. Critics, however, argue that all war is essentially indefensible regardless of how justifiable the cause behind it may be. They also attempts to justify a particular type of war as being just serve to rationalize violence instead of constraining it. Philosophical differences aside, many agree war is a failure of imagination. Ethiopians have had enough of the internecine conflicts that they have endured for centuries. The blame squarely lies with political leaders and elites bereft of the desire to settle differences through constructive dialogues. In any kind of armed conflicts it is innocent civilians who bear the brunt, not their architects. That’s why the Ethiopian government and the TPLF need to immediately stop fighting and thrash out a durable peace accord at the negotiating table. Let’s not go back to square one!

Hopes of a negotiated political settlement to the war that erupted in northern Ethiopia in November 2020 following the attack on the Northern Command of the Ethiopian National Defence Forces based in the Tigray region by the forces of the Tigray People’s Liberation Front (TPLF) have been high ever since the Ethiopian government established in June a committee tasked with holding peace talks. The government’s announcement in late July that it was ready to hold peace talks with the TPLF “anytime, anywhere” and the TPLF’s expression of its willingness to ending the war through peaceful means, albeit the fulfillment of certain preconditions, led many to believe that peace was finally within Ethiopians’ grasp. The apparent readiness of the two parties to engage in peace talks was hailed as an important initiative in bringing a conflict that has exacted a terrible toll on the country and its people to an end.

Efforts to start the peace talks seem to have hit a snag lately though. First, this week the Main Peace Committee—the committee the Ethiopian government established to explore the possibility of talks with the TPLF—declared while announcing it had drawn a “peace proposal” that the resumption of basic services to the war-stricken region was contingent up on the creation of an enabling environment once a formal ceasefire is concluded. Meanwhile, the TPLF immediately dismissed the committee’s statement as “obfuscation”, blaming the Ethiopian government for openly defying “their oft-repeated promise to take measures aimed at creating conducive environment for peaceful negotiations”. It further accused it of “taking provocative actions against [Tigrayan] forces” and warned that “it will be solely responsible for the eruption of a second round of war that will lead to the total destruction of the country”.

The condition laid down by the Main Peace Committee in a statement it issued, namely that the declaration of a formal cessation of hostilities is a prerequisite to resume the provision to Tigray of, among others, electricity and telephone services belies the Ethiopian government’s recent unambiguous assertion that it was committed to hold negotiations without any precondition and as such represents a step backwards. While the committee has legitimate security concerns regarding the safety of federal government employees that need to be deployed to Tigray in order to restart the basic services, it should also be mindful of the fact that the continued disruption of the services only serves to exacerbate the plight of ordinary Tigrayans, not the leadership of the TPLF. It needs to demonstrate in deeds its avowed commitment to alleviate the suffering of citizens in the conflict-affected parts of the Tigray, Afar, and Amhara regional states. On its part the TPLF must stop beating the drums of war in the realization that throwing around belligerent statements is counterproductive to peace-building endeavors and just prolongs the ordeals of the very people it claims to stand for.

A host of hurdles stand in the way of the proposed talks. TPLF forces still occupy parts of the Amhara and Afar regions they invaded. Similarly, the Amhara region has ruled out negotiating over the fate of areas its forces wrested from Tigray soon after the war erupted, arguing they were forcefully incorporated under the Tigray region in 1991. The continued presence of the Eritrean troops in some of the territories they occupied in Tigray poses a challenge that complicates negotiations. Moreover, disagreements over who leads the mediation process—the African Union (AU) as the Ethiopian government insists or Kenyan President Uhuru Kenyatta, the preferred choice of the TPLF—can torpedo the entire process.

Trying to bring about a complete end to the fighting in northern Ethiopia followed by a political settlement which leads to a lasting peace is an arduous task to say the least. Nevertheless, no price is too high to pay for peace. Now is the time for the warring parties to show a genuine determination and commitment to peace. The deep-seated antagonism between the two sides understandably makes it difficult to strike a peace deal. Engaging in dialogue and making the necessary compromise requires more courage than continuing the war. Embarking on a peace process should not be about total victory for one party and a defeat for the other. It is about achieving an outcome in which all the protagonists and more importantly the people of Ethiopia emerge victorious. For the sake of Ethiopia and its people the Ethiopian government and TPLF must recommit themselves to peace.

The rule of law is a mechanism, process, institution, practice, or norm which strives to ensure that no one is above the law, everyone is treated equally under the law and held accountable to the same laws, there are clear and fair processes for enforcing laws and human rights are guaranteed for all. Ethiopia has the sad distinction of being a nation with a checkered track record when it comes to upholding the rule of law. Among the different metrics by which a country’s overall rule of law performance may be measured, Ethiopia has particularly fared badly in assuring order and security as well as respect for fundamental rights. The act of turning back some people travelling from the Amhara region en route to the capital Addis Ababa constitutes a clear example of the latter.

For over three weeks now security forces in the Oromia region have been preventing citizens travelling by cross-country bus from the North and South Wollo zones of the Amhara region to the capital through Oromia from getting to their destination if they do not carry a residence ID of Addis Ababa. Federal government officials claim operatives deployed by the terrorist Tigray People’s Liberation Front (TPLF) were recently arrested while trying to infiltrate Addis Ababa using residence IDs and administrative seals it had looted when it occupied some parts of the Amhara region, adding the measure is part of a security operation aimed at thwarting the evil designs of the terrorist group. True, a government’s primary responsibility is to protect the safety and security of citizens. Nevertheless, care must be taken to ensure that the manner in which any operation to ensure law and order does not trample basic liberties enshrined in the constitution.

One such right is freedom of movement. Article 32 of the constitution stipulates that any Ethiopian or foreign national lawfully in Ethiopia has, within the national territory, the right to liberty of movement and freedom to choose his residence, as well as the freedom to leave the country at any time he wishes to. The Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights, and the African Charter on Human and Peoples’ Rights — the international instruments Ethiopia has ratified and in conformance with which the fundamental rights and freedoms specified in the constitution must be interpreted — also afford protection to this right. Absent a duly declared state of emergency, there can be no justification for the indefensible prevention of Ethiopian citizens from enjoying their freedom of movement on the ground that they pose a potential security threat.

Aside from flouting the rights to liberty of movement, the action of the Oromia security forces has other troubling ramifications. First, it creates a perception of discrimination and ostracization in the individuals victimized by the travel restriction. Moreover, the fact that they are unable to travel to their intended destination entails damaging economic and social consequences for them. This is liable to sow the seeds of resentment and down the line to political conflict. Second, it encroaches on the federal government’s constitutionally granted power to regulate major roads linking two or more regional states. Such intrusion into the federal government’s exclusive preserve sets a bad precedent for other regions. In short it spells danger for the integrity of the constitutional order and the rule of law.

Freedom of movement is a fundamental right all levels of government must respect. Any perceived security threat its exercise may pose should be handled in a manner that does not result in the violation of the right and subjects innocent citizens to inconvenience. There can be no sugarcoating the fact that the act of preventing certain classes of people from travelling to wherever they want is an unequivocal infringement of not only freedom of movement, but also the right to equality. As such it is incumbent on the federal, Oromia and Amhara regional governments need to hold consultations on ensuring that everyone travelling from the Amhara region via Anwar Soussa has been the Managing Director (MD) of Safaricom Ethiopia since July 2021. He was the Managing Director of Vodacom DRC and the Chairperson of Vodacash (M-PESA), a position he has held since 2017 until joining Safaricom Ethioia. During his tenure, Vodacom DRC made major strides in operational performance, crossing the USD half a million in service revenue mark for the first time in 2020. The Reporter’s Samson Berhane sat down with him to understand his new beginnings in Ethiopia.

The Reporter: First, tell us about your journey in the telecom sector.

Anwar: I have been in the telecom sector since 2006. But I started in the technology sector since 1996 in Montreal, Canada. I joined Safaricom Ethiopia, the project, when I was in Vodacom in Congo. I was a CEO there. My experience perfectly suited for this type of operation.

Safaricom has been preparing for more than a year to launch service. Why did it take so long? What were the problems that you have faced while doing so?

I don’t call it a problem. I call it a challenge. Initially, when we come into the market, the idea was to launch using ethio telecom infrastructure. That agreement took longer than expected to finalize. As a result, we choose to build our own towers. We did not want to wait. To build towers, you have to find land, import materials like steel and find cement as well as hire sub-contractors. That means you need more time than the initial plan. That is the real reason why it took longer than expected to launch service. Now, we signed a deal with ethio telecom and things are gonna move faster.

Tell us about the detail of the deal. I heard you are going to pay in both local currency and USD to lease the infrastructure of ethio telecom.

I am going to keep the deal private because that is between us and ethio telecom. But there is a dollar component. The reason is, as well all know, there is a forex shortage in the market and to prepare a site for us, they are required to import materials from abroad. We recognize that. We agreed to make the component in dollar for them to make the site ready for us.

So, the negotiation is now over?

Ethio telecom has been a very good partner. The CEO, Frehiwot, has been gracious in terms of engagement with us. Everything is proceeding well. The delay was due to operational issues. How many juniors were available? How fast we can get steel? How fast we can upgrade the site? All of these are operational issues.

When you launch service in Dire Dawa, you have used your own infrastructure.

That’s correct. When we launch service, initially, we are using our own infrastructure. But as we move forward, we will be sharing infrastructure of ethio telecom and build our own in the meantime.

Is there any change in equity contribution of shareholders in Safaricom Ethiopia? Some say, there is. Is that true?

No, there is change.

As Safaricom is listed in the stock market, a change is expected when something new happens. Have you seen any change recently after you launched service?

I don’t think it is possible for you to attribute any change to a certain element. The reality is the World’s stock market has been very volatile over the past six months. There is a war and a global recession coming in. Certain things happening are way beyond the control of a certain company or what we do here in the ground.

What should Ethiopians expect from Safaricom? Many hope Safaricom will come up with a better quality of service with a lower fare.

The pricing move from ethio telecom last year was very strong. They brought down massively. I am not sure if it will be possible to bring down price from what is in the market now. However, in terms of quality, my expectation is that the quality overall in the market will improve. And the reason I say that is because we are setting up a new network and ethio telecom, or the competition, will not stay still, I expect they will bring the best game in the table. Quality of service, both in technological level and in customers’ service, will be improved massively. How customers’ complaints are going to be taken care of? I think these are areas where you see a major improvement.

The price that you are charging is almost similar with ethio telecom. Do you think you can be competitive in the market, while charging the same price, as people expect a lower fare from you?

The price for voice is one of the most aggressive in Africa. And I don’t think there is a room to drop voice prices. So do I think we can be competitive? Yes, I do. The most important thing we want to flag is that we don’t want a price war with ethio telecom. If we start a price war, that means they will automatically react. There is no way there is going to sit by and see us dominate the market because our price is cheaper. I think that will a detrimental impact on the market, not only on us. I don’t think you see a change in terms of price.

The infrastructure deal took more time than you anticipated. The global market is not helping too. Did you make any change in your financial targets, considering the challenges you have faced since you secured the license to operate in Ethiopia? For instance, do you still think it is possible to achieve breakeven within five years, as outlined in your initial plan?

Yes, I do think so. I think the biggest challenge is the global inflation. The price of fuel is increasing. The same is true for cement and steel. All these things are going to be more expensive. I think this element of the business will be very challenging. Yet the plan is still to breakeven within four or five years. But we have to pay attention to the cost.

You are investing heavily in infrastructure development. And can you tell us how far you have gone thus far?

We will continue to invest with the money that we allotted when we started the business. Some places are easier. Addis is easier than the regions. This is because there are a lot of buildings to put on the antennas. So it is simple to deploy in Addis than other areas.

If it is easy, why did you first launch service in Dire Dawa?

That is a small town. It requires fewer sites. It is easy to optimize. The network rollout was very fast.

How long it would take to launch service in Addis?

Six weeks. We believe there is a massive opportunity in the capital, in every element. I have been working in 12 countries. I never had been in a country where a single company dominates everything. The market will be split.

Is there any place that you want to capitalize on, especially an area where ethio telecom has a little presence?

That is a nature of businesses. You grow until there is no place to grow.

How long it would take for you to be independent from ethio telecom?

I don’t think we want to be independent. The reason I say that is because old days where everyone builds its own infrastructure are gone. You have to share infrastructure. That makes more sense because that does not have any impact on your competitiveness. Why do you build a fiber where there is a fiber? That will be a waste of money.

There has been a social media outcry against your recruitment process. What is your reflection on this?

To be honest, I think it was not only on the recruitment process but also on the language we are using. It was also about distributors and how we are allocating distributors across regions. It was also about the religious mix of what we have in the office and what we have employed everywhere. There were a bunch of requests the activists raised with us. So, we did not respond immediately because we were supposed to understand whether these are true or not and see ourselves if there are problems. To be honest, I don’t think the problems are as acute as people are saying. What they did say is to be careful. For instance, if we go to Oromia, we have to use Afan Oromo. We have to pay attention to laws. We have put signs saying coming soon. It was us not being sensitive. We met guys behind the campaign. They were very moderate. None of them want to hurt Safaricom. They want what we do to be fair. They did not make extraordinary demands. That’s why we are comfortable to engage with them. I understand we have to be sensitive to the history, the culture and the current politics without going too far. It has to merit-based. Everybody coming to the company should be the best of the best. We have received a lot of advises from the government. All of them said “you must choose the best but be careful.”

Do you think it is possible for Safaricom to apply meritocracy in light of the current situation in Ethiopia?

I think there has to be a meritocracy. The qualification of the candidates has to be there. There should be no compromise. However, as we choose candidates, the priority must be given to the people within the region. It is not appropriate to start shifting from one region to another. Not because of other issues but language considerations are critical. People have to speak the language of the area where they are working.

Now let us talk about mobile money. I know you are in the process of launching M-Pesa here. Do you see any progress from regulatory body in introducing a legal framework to govern the sector?

The legal element is going fine. I think it is gonna be available very soon. Our shareholders are engaging with the government. From operational perspective, things are going well. We have put the app in place. We have put configurations in place. Everything is in a good shape. In technically perspective, we will be ready to launch service in the next three months.

The approval process of the bill may take another three months. Do you think that will have an impact on your plan?

No. We got so much to do. We have 25 cities to cover. We have massive network to build.

Do you think you can repeat the success of M-Pesa in Kenya here in Ethiopia?

Absolutely. Kenya is particularly amazing story. Wherever we launched M-Pesa, we were successful and we are leading the market. So we don’t see any way it is not going to be successful in Ethiopia.

Ethio telecom is already advancing in the mobile banking market. Are you expecting fierce competition when you launch M-Pesa?

I do expect very strong competition. They have done a great job in recruiting customers and strengthening the network.

From what I have observed, ethio telecom is taking an advantage of its link with public offices to facilitate payments in the public sector? Have you get any promise from government officials whether you will get the same opportunity when you launch M-Pesa?

We are talking them to now. There is no one said we are not going to get this opportunity. Yes, they had a one year head start. They have done great job in services they have launched. Yet I believe we can catch up.

How is the war in North Ethiopia affecting you?

We have a huge amount of work to do. I think it will slow us down in certain areas but we will continue doing our work in other areas. But everyone is sad to see the resumption of conflicts.

Are things in place to launch service in North Ethiopia, particularly in Tigray, if the war ends?

We will be ready as soon as communications are stored and get the blessings to go back in. We want to reach all over Ethiopia.

My last question is on repatriation. Many international companies usually complain about the difficulty of repatriating profit in Ethiopia. Some say it takes over a decade. How is your plan in that regard?

Repatriation is not a big issue. The issue is finding dollar to buy equipment after the investment window closes. After our money runs out, we need to get forex to buy equipment. Regarding repatriation, we knew the issues when we came. If it takes 10 years, it takes 10 years. We gonna be here longer than that. Of course, we want to repatriate but we are here for long term.

Oromia without fear that they will be turned back before getting to their journey’s end. Given upholding the fundamental rights laid out in the constitution is vital to assuring the very survival of Ethiopia as a cohesive polity, overstepping the constitution in the name of containing elements bent on wreaking havoc cannot and should not be tolerated. That is why it’s imperative to put an immediate stop to the blatantly unconstitutional violation of freedom of movement and see to it that it’s not repeated ever again. Goitom Tsegaye is deputy chairperson of Arena Tigray, an opposition party popular in Tigray. He has been voicing his concern over the war in Tigray since it broke out almost one and half years ago. The second time the conflict started, Goitom found it heartbreaking. He thinks that in carrying out the eagerly anticipated negotiations between the two warring groups, the African Union did not fully fulfill its obligations to the organization. The Reporter’s Selamawit Mengesha sat down with the opposition leader to get more of his perspective on the recent resumption of hostilities.

The Reporter: Let’s start with the war that erupted anew this week. Before the battle resurfaced, there were talks of a peace agreement. Is there still hope for negotiations?

Goitom: It is heartbreaking that the dispute has resurfaced this week. Since it began, there is a potential that it will continue, although much will be lost if it does.

War’s casualties are well known, and hopefully we have a government that cares enough about its people to put an end to it. They should have learned from their previous mistakes and avoided them, in my opinion.

Both parties demanded that mediators be appointed. What was the reason the two parties couldn’t agree on who should undertake the mediation?

Essentially, I believe there is one thing we should all remember: everyone must be fair and impartial while looking at things.

In a war, not everyone carries a weapon, but what we’re seeing in Tigray is people lacking necessities such as banks, water, transportation, telephones, and electricity.

We were taught to believe that these services were destroyed during the war and that the government was unable to repair them, but it is now clear that this was not the case all along.

According to the Tigray regional government’s discussions with the EU, the federal government is leveraging these necessities when it could simply provide them to the people; it’s using them as a weapon of sorts.

War has laws, but the warring side is separate from the people. The people of Tigray are also Ethiopian citizens; hence the administration is harming its own people. Personally, I believe it is not the best way to proceed.

I believe that the federal government should have learned from its failures from the beginning. I don’t think initiating a full-fledged war with the TPLF was the best course of action. Instead of attacking, it should have been defending.

It was not a prudent move, especially with other powers involved. What I mean is that the items the Tigray regional government is requesting from the federal government are essentials for the people.

Both parties bear responsibilities for doing the right thing by the people. I’m not sure why it’s framed as a difficult choice. It is for the people of Ethiopia; hence the government should have established a consensus for its people by now.

To return to the subject of the negotiations, the government already pledged to begin them without any preconditions. However, the offer was to negotiate solely with the TPLF, without including Amhara, Afar, or even Eritrea. Do you think these groups should have been taken into account during the negotiations?

I believe the government’s strategy was flawed from the start. We’ve observed unlawful acts such as Tigray transferring land to Amhara with the assistance of other forces, so what has the Amhara area lost from Tigray?

We’ve heard on several times, particularly in the case of Welkait, that the region is attempting to reclaim their land. Is it even their land is the question?

The structure of the regions, in my opinion, is fairly apparent.

I say this because there was a region called Show that later became part of the Amhara and Oromo region, a place called Bege Medhir became part of the Tigray and Amhara region, and if Welo became part of Afar, Tigray, and Amhara, then there is really nothing new that happened between Tigray and Amhara, unless there is a belief that if I am living here, there is no one else there, which in that case makes comprehension difficult.

Ethiopia and its land are inextricably linked, so stating the land was mine and I want it back makes no sense to me. Questioning the demarcation system is understandable, just as arguing “using language as a way of defining regions is wrong,” but claiming land in the same country is not.

Ethiopia’s land is reserved for Ethiopians. Sitting and talking with Tigray and the federal government makes sense because the government is clearly offending Tigrayans and requires mediation.

Because Eritrea was involved in the attack, having Eritrea participate in the talks makes more sense than having the Amhara region participate in the talks.

Understanding this, I believe, is critical.

As a representative of Tigray, Eritrea and the federal government should have discussed Bademe and other issues. However, in actuality, the federal administration has not been representing the people and territory of Tigray.

Negotiations have been attempted by international groups. We’ve seen people like Obasanjo come to the country and make attempts, and many people were optimistic that the talks would take place. Do you believe the conflict resurfaced because those bodies failed to carry out their duty properly? Or do you believe they carried out their responsibilities correctly?

I believe we should have taken the initiative.

Both the federal government and the Tigray regional government should have demonstrated interest in the negotiations from the start; only then could other groups assist in getting the talks started.

According to my knowledge, they did not fulfill their obligations, particularly the African Union. Aside from creating articles and laws, I do not feel the AU has a consistent and capable ability due to one of their articles; Article 2H, titled humanitarian integration.

Although the article has been ratified, the Union lacks the resources to put it into action. According to that provision, the Union has the right but not the resources to intervene in cases of humanitarian rights breaches.

For example, the AU did nothing to address the Tigray situation; there were words but no action. For these reasons, I didn’t have high hopes for the AU. It still has a long way to go, in my opinion.

Other international organizations with influence and power have their own military intervention regulations as well. The west has previously attempted to exert pressure on the administration, but international organizations such as the EU and countries such as the US are preoccupied with other matters such as the Ukraine-Russia war.

They have the ability, but their focus has been diverted away from Africa. They, too, lack consistency, as evidenced by their actions in Ukraine. As a result, I don’t believe they’ve done their part

They have the power and capability, and yet here we are.

Who do you believe is to blame for the re-ignition of the war? Could the difference in negotiation beliefs be the cause, or do you believe the absence of the Welkait and Humera concerns is a contributing factor?

As I stated at the outset, if we refer to the Oromia area, we need to know which cities and counties comprise that region. That is, the problems of Tigray and Welkait should not be a problem. I cannot argue that the requirement should not be met because the federal government granted the land without Tigray’s approval and is now requesting that Tigray accept it.

People who lived there before are now refugees. People are unable to use their own funds because banks are closed. All of these difficulties should be considered as prerequisites.

It’s not difficult to grasp, even for the federal government. People are hungry, so shouldn’t that be addressed first as a prerequisite before any negotiations begin?

I cannot accept the idea that there are no prerequisites. Negotiations would be conducted with a boot on the people of Tigray if those demands were not met.

I don’t have any information on who restarted the war. To be certain, I would have to live there. I am like everyone else, listening to all sides’ arguments.

What will the people of Tigray face if the fighting continues? You’re already aware of the issue. What do you think about the present humanitarian crisis?

I don’t believe that anything positive can come from conflict.

War will take innocent lives, destroy property, and deplete the economy, and what could be worse than that? Tigrayans are at a significant disadvantage.

They are under attack from their own government, former foes such as Eretria, and adjacent territories such as the Amhara region. It’s painful to see how something that should have been resolved amicably has turned into an injustice against the people of Tigray, which is also an injustice against the rest of the country.

Hopefully, people will realize this soon. I’m sure there will come a day when our empathy will be tested. Ethiopia will pay a high price as a result of the conflict. In the war, there are no winners, but all are losers.

Do you believe the constitution can deescalate and resolve the conflict? What are your thoughts on the matter? Is it possible to resolve the disagreement based on the current constitution and the new statute established by the federation under which regions could decide directly to be regions?

There aren’t enough people organized to hold a referendum. Furthermore, Tigray has no representatives in the House of Federations. How will Tigray make its case? Who will be Tigray’s representative?

At this stage, it would be child’s play; the most serious offenses have already been committed. Atrocities in violation of the constitution have occurred. International agencies have branded it ethnic cleansing, and some have even called it genocide.

So this is pretty strange. On paper, the constitution is just and fair, but its implementers are not.

Is it truly conceivable to exclude Eritrea from the war in the future if Eritrea’s government refuses to withdraw its troops? Will their departure solve the problem in any way?

I believe we must consider how they got to be involved in the war.

Did the federal government request that its troops participate? Was the Parliament able to represent them? I mean, there are multiple options, right? Who delegated authority?

These points must be addressed first.

It would be pointless to question something that has no legal foundation. Was a formal agreement reached between the Ethiopian government and President Esaias? If so, what were the terms, and where are the documents?

Is it even conceivable for an Ethiopian Prime Minister to pull out such a deal out of the blue? He cannot. To begin with, it must go past Parliament.

As a result, the question of whether Eritrea should withdraw has become extremely convoluted, with numerous loose ends.

We have observed that since the beginnings of the war, a large number of Tigray-born residents living in various cities throughout the country have faced discrimination and harassment everywhere they go. They couldn’t return to Tigray due to the war, and during this time, everybody from Tigray or of Tigrayan ethnicity was in a plight. That had been subsiding to a degree in recent months, but now that tensions have resurfaced, what does this mean for Tigrayans living around the country?

This is a clear problem. Kibrom authored a book and was detained because of his ethnicity; he traveled to Afar and got into a lot of problems; I’m using him as an example, but there are many others like him.

What is the UN peacekeeping mission doing now? To be honest, I don’t think it was even this horrible during Derg’s reign.

Innocent people are openly mistreated based on their race, with some even losing their lives as a result. Tigray is not being represented by the government, and this must change. It must reflect on its previous activities.

We are on the verge of a major crisis, which must be examined thoroughly.

It is unacceptable to feel unsafe and to face severe discrimination in your own country because of your heritage. There was a glimmer of hope. As you stated, the current circumstance may pass as it always does, but it may leave wounds and scars that will not go as readily.

Do you believe Ethiopia will be restored to its former glory in the future? What is the hope in a situation when many already believe Tigray is no longer a part of Ethiopia or that it would have a referendum? Do you believe Ethiopia is one of them?

It depends on the next steps we take.

As far as I am aware, Tigray is still a part of Ethiopia. Even Eritrea would have been a part of Ethiopia if not for the Adwa war and its consequences.

Right now, looking at the government’s actions against the people of Tigray, such as refusing to reopen banks, the internet, and transportation, it appears that there is a power that does not want Tigray to be a part of Ethiopia, which is incorrect. The China Foundation for Poverty Alleviation (CFPA) is a non-governmental, non-profit organization that was established in 1989 as one of China’s largest charity organizations dedicated to poverty alleviation.

The foundation, among other things, provides healthcare and nutritious food to vulnerable populations, with a focus on mothers and children; supports education programs; provides scholarships; builds infrastructure; and distributes stationery to help communities thrive.

The Ethiopian Civil Society Organizations Authority registered the Foundation in 2019, and it has been actively working since 2015 by collaborating with local and international non-governmental organizations on various projects such as school feeding, clean water, women’s economic empowerment, and refugee support. Sisay Sahlu of The Reporter spoke with Emma XiaocenXuang, the country director of the foundation’s Ethiopian office, about some of the project activities in Ethiopia.

The Reporter: It is unusual to see the Chinese government involved in such areas, particularly in poverty alleviation. What are the goals of establishing this foundation?

Emma XiaocenXuang: This is the basis of a total charity organization founded in 1989.

The Chinese government’s fund for social enterprises provides 99 percent of its funding. In China, the foundation works in the fields of health, education, rural development, and livelihood. We are now investing in similar international engagement areas.

In Ethiopia, our official implementation agreement began in 2015 in collaboration with Ethiopia’s First Lady, Roman Tesfaye, specifically to begin school feeding in Addis, in over 43 schools.

We were collaborating with a local organization called E-network at the time, but they changed the name to Hailmariam and Roman Foundation. We were officially registered as a civil society organization in Ethiopia in 2019 after working with this foundation for about four years.

We started the registration process in 2017, but the government changed, so we put it on hold. We restarted in July of 2019.

What is the foundation’s international experience?

In 2005, we began working as an emergency aid provider, and in 2015, we officially began in Myanmar and Nepal as our first steps in Asian countries, with Ethiopia becoming our first African destination.

We began our project in Ethiopia and Sudan in 2015. However, we chose Ethiopia as the location of our regional office.

The Chinese government has extensive experience in poverty alleviation. What is the secret to their success? Are there any suggestions?

One component of the foundation is poverty alleviation. The People’s Republic of China has a very strong system, and China is very good at mobilizing all of the parties involved, such as companies, non-governmental organizations, the public, the government, schools, and research institutions, to engage in poverty alleviation.

All of those parties are working within this system, and there are numerous methods and areas for collaboration in the education and nutrition sectors. We incorporated the school feeding system into children’s basic rights and the education system, not just the Zero Hunger plan.

We also give quotas to poor areas, particularly at China’s two best universities, Tsinghua and Peking. According to policy, we provide a quota for the poor. This is because if you want to end poverty, you have to invest in education.

Similarly, we must construct a very strong housing system to ensure that all citizens receive the full package so that they won’t have to stress over things like, “Oh, I’m sick right now, so I’m going to the hospital and spending a lot of money, since the government is covering most of the cost.”

Both the government and non-governmental organizations offer benefits like insurance.

For instance, I was born in China. Both the government and my company provided insurance for me. However, I believe that identifying the poor is the most difficult task because doing so is the first step in providing aid to the underprivileged.

In this regard, the Chinese government created a system that can store all of a person’s information on a card that serves as an ID card. You can discover a person’s complete information using this card.

A person also has a complex set of criteria and evaluation standards.

If you have an income of up to 2300 Chinese RMB, that means you are getting out of poverty, and the next step is to observe and follow-up for a few years until you make steady progress out of poverty.

If they are in an accident or become ill, they will be forced to return to poverty and their names will be added to the poverty list again. So this is a national system implemented with strong leadership and complex evaluation criteria to identify, follow-up, and evaluate the entire system.

How can we balance the demands of the expanding population with the available resources? Is there any advice, particularly with regard to the food system?

You know, it could be the geographical location, but if you look at China, we have a very large land area. Even the climate in the north and south is vastly different. People in the south, for example, prefer rice as their main food, whereas people in the north prefer wheat. The majority of Ethiopians consume Enjara.

I believe it is about food diversity and nature’s gift. I couldn’t find any seafood in Ethiopia. Everything is imported. So, in comparison to geography and location, it is the gift of nature that I want to emphasize.

The second point to mention is that China has made substantial investments in its agricultural sector. We simply devised a number of methods for producing more food while working with limited resources.

For example, there is a well-known Chinese man who developed a type of improved seed by changing the genetics and received an international award. In the same situation, this new seed can produce more than ten times the yield of the original local seed.

Thus, we put more time, effort, technology, and other resources into our endeavors. The northwest region of China is characterized by extremely dry land devoid of any water. In order to effectively use rainwater for farm work during the dry season, we constructed a water sailor.

The other thing we do is drip irrigation, and we make good use of all the available resources. There are just too many aspects to it for me to list them all now.

When the land is distributed in pieces, the government in some places tries to use the entire land and bring all of the necessary equipment to do the farming all at once, saving money, time, and human resources while producing more products.

What can Ethiopia learn from Chinese agricultural practices in order to make better use of its resources?

The most important industry is agriculture. Ethiopia is also dependent on it.

I noticed teff is a main product, and it appears that farmers are having difficulty making a living from it. I recently traveled to the Amhara region, Somalia, Oromia, and other parts of the country. I noticed how friendly and hardworking the people are.

Their farming equipment, however, only uses cows; such farming was abandoned in China more than 30 years ago.

When I see this practice, I think to myself, “Is it possible for Ethiopia to develop without using adequate technological instruments?” And I believe it is preferable to bring more technology and do it more efficiently.

I want to be modest. I sometimes admire how they learn this from their ancestors and local wisdom, even knowing the direction of the wind and when it might rain.

However, because I am not an expert in the field, it is difficult for me to speak out without conducting an assessment and a survey. In China, there are numerous agricultural universities with a large number of professors and college students working in the sector.

They are professionals who are learning from both abroad and at home, and they provide an excellent representation of Chinese planting culture. Farmers are constantly being introduced to new cultures, technologies, and skills. We also organize farmers into groups to teach them how to plant properly in order to produce more products.

Another experience is that you are aware that individual farmers are extremely vulnerable and lack the clout and knowledge to bargain with the market and the upper chain. They only sell the original fruit for a very low price. They put in a lot of effort and got very little in return.

There is something in China known as a “cooperative” or “organization.”

It is a unified organization made up of all farmers, and the farmers choose just one or two people to lead their organization and send representatives to determine the prices of all products.

They bargain to determine the market price, and if they work together and make a profit, they split it.

The majority of Chinese practical and recognized engagement in Africa mostly takes the form of investments, loans, and credit provision. Humanitarian commitment to Africa is little known, particularly in comparison to the Western world. What prompted the Chinese government to get involved in such foundations and poverty-relief efforts?

The first point I’d like to make is that the China Foundation is a non-governmental, non-profit organization, and we take great care when discussing political issues. We are always neutral and on the side of the vulnerable.

My personal observation is that, initially, international aid is provided all over the world, particularly after World War II. So there is a tradition, and 40 years ago, China suffered greatly and received significant assistance from Western and other developed nations.

They invested heavily and brought some goods to China. You know, for example, for people like me, I have received an English education from the UNDP.

China was the first recipient of aid, and now that the country has matured and can no longer ignore these countries, it is time for China to accept responsibility.

So, doing business is one thing, and taking on social responsibility is quite another. There is no conflict, and we must proceed.

You earn money and support your people there, but you must invest locally to support the local community, which is natural. Here, we share common sense and concepts with both the government and the general public.

But, you know, because we only recently developed our economy to support the Chinese public, the concept of social responsibility is something that comes from a good heart. China has done a lot to eradicate extreme poverty, but poverty still exists, and people are becoming wealthy in a very short period of time. We sometimes solve the poverty problem, but we still need to work on the nutrition problem.

We can’t solve it quickly because it’s a long-term process.

However, the Chinese government is always concerned with the need to do something for the locals, and they encourage businesses to assist the locals and take more responsibility. It also encourages companies to invest abroad while also taking on social responsibility.

The funds for this foundation did not come from the government; rather, they came from the South-South cooperation initiative.

How much money have you put into Ethiopia?

We used USD two million this year, but depending on the project, the fund may grow if the situation allows us to move forward.

What have you done in Ethiopia thus far?

We want to do a lot of things, but some of our plans have to be put on hold, not only because of the COVID-19 outbreak, but also because of the conflict in Ethiopia.

We are now investing in education, especially in school feeding, panda bag, wash, and solar light projects. But school feeding is the first thing we’ve focused on because we believe the children deserve it and that it’s a basic human right.

In addition, we intend to construct the school kitchen and provide cooking supplies for the students.

We have received funding for it, but we have yet to make a decision.

The city of Addis Ababa has adopted the full standard of cooking that we developed based on Chinese experience combined with the first lady’s local experience. Initially, it was 40 birr for two meals (breakfast and lunch) per child.

We recently visited the Oromia region and plan to visit the Amhara region; we simply want to share our limited resources’ experience, models, and any other relevant information.

Our main goal is to create a model and share it with the government and other non-governmental organizations (NGOs) that want to get involved and contribute to the local community.

Do you believe this school meal can be sustained?

Of course, we will conduct an evaluation, and once we see how the school feeding program is working, we will not suspend it for at least three years. We need to ensure that once the program is running smoothly, we can extend it for more than three years.

But our aim and goal is to keep this school feeding program running from kindergarten to grade eight, and that is how we will proceed.

However, if the government says, “We have money and we don’t need you anymore,” we suspend it and shift our focus to other sectors.

Addis Ababa has started the program, but if you look at mothers’ cooking, you will notice that they only use three stones in the pot to cook the sauce, which consumes a lot of energy and is bad for their health.

They must get up early and are paid very little. As a result, we are attempting to provide more integrated and comprehensive support, such as building and maintaining the kitchen as well as providing cooking materials.

We commissioned some Chinese construction firms to create the design, which we have already implemented in one school.

It is a pilot project, and if it is useful and effective, we will undoubtedly expand it. However, the first step is to obtain electricity in order to provide modern cooking materials, which can also save energy.

How are schools chosen for this project?

We communicate and collaborate with the government, and they know which areas and schools require the most attention. We will go there on the ground and compare one school to another based on their recommendations.

Are you planning anything else?

Yes, there is a Panda Bag project that aims to provide kids with school bags that contain more than 100 school supply items, such as lunch boxes, water bottles, hygiene items such as soap and toothpaste, and all the necessary materials for the students.

Every year, we conduct an assessment by asking children, teachers, parents, and members of the local community what kinds of items they most need and which items they do not want.

We need to make more adjustments if any item is more needed. We make every effort to avoid any political or religious content in this gift. The donation was made in collaboration with the Ministry of Education.

We will send the entire quota to the Afar and Amhara regions this year because they are affected by the conflict.

What exactly is the challenge?

Of course, there are numerous challenges. Each project has its own set of implementation challenges. We have to buy the panda bags from local factories when we need to provide them to the children. We talked, argued, and bargained about the price and shipment from China with them during this process, because we couldn’t find the item in the local market.

Actually, we made it easier for you to invest in it in the local market, but you couldn’t find the right quality.

And something that worries me is that when we try to collect some items from the local market, I notice that they are coming from India or Turkey, and I believe that if we need to invest in the local market, we should get the materials from here, because buying imported materials is very expensive.

Of course, not this year. We paid nearly one million birr per year for the damage in the previous three years because we did not receive the tax-free letter. However, we received this letter this year. This entry was published on August 1, 2010. Yohannes Benti (PhD) began his career as a chemistry teacher for a high school in West Oromia in 1992, the same year he got his degree in chemistry from Addis Ababa University. He has been the president of the Ethiopian Teachers Association since 2009, having been elected three times. He is the lobbying group’s longest-serving leader, having ruled over it for more than a fifth of its existence.

He immediately became an active member of the Association. Before getting his master’s degree in Educational Planning and Management from Addis Ababa University in 2005, he earned a second bachelor’s degree in law from a private university. While running the Association, he got a certificate in Advocacy and Citizen Management from the Coady International Institute in Canada and a PhD in Educational Policy and Leadership from Addis Ababa University in 2019.

The Association has 700,000 members at all levels. For the past six months, university instructors have been protesting about inadequate remuneration and other difficulties, but the government appears to have mainly ignored them. They have even vowed to strike in the coming month if the administration does not present a satisfactory solution.

Yohannes is the president of the association that represents each university’s associations, as well as a member of the Board of Education International, a 32-million international union organization. The Reporter’s Samuel Bogale sat down with him to discuss the concerns of lecturers and the education sector.

The Reporter: What compelled university academics to issue an ultimatum as they request the government to make an adjustment on salary and work grade? Can you tell us what they asked, and why they didn’t get a response?

Yohannes Benti (PhD): The query from university lecturers is on Job Evaluation Grading (JEG) and its implementation, which the government decided to impose for all civil servants in 2019.

There were approximately 65 salary scales among civil servants when the government agreed to reduce these scales in 2010, but it was later reduced to 22 scales in 2019 and applied immediately.

Since 2016, the Association has represented both general education and university teachers in the study to implement the JED on civil servants.

We detected a problem with the scales and wages of general education instructors when it was brought to us for comments in 2019, soon before implementation. We later requested an adjustment to increase their grades from the Ministry of Education, which then met with the Civil Service Commission.

During the process, the requirement for university instructors was disregarded.

What substantial modifications were made to the pay scales for general education teachers but not for university lecturers?

The highest work grade for teachers, regardless of experience, was only six. When the JEG was established, we asked the government to help them improve their grades, and they eventually made it to grade nine.

These are the salary adjustments that university lecturers did not have the opportunity to make. High school teachers with a bachelor’s degree currently earn more than 12,500 birr per month, or 1,400 birr more than university lecturers.

The higher the grade point average, the better the salary.

What has been the reaction of university instructors since then?

They have been complaining during our series of meetings since its deployment in 2019, and have even requested back pay.

Last year, the associations at each university formally developed a list of approximately 14 questions. Our association was then part of a committee that made the requests to the then-Ministry of Science and Higher Education, which was later dissolved before responding to our queries.

The petitions have since been passed on to the Ministry of Education, which is now the regulator of Ethiopia’s universities.

They had complained not just about the JEG and salary scales, but also about overtime pay, consultancy fees, housing allowances, and tax-related difficulties.

Housing has long been a demand of the teachers, and the government has always claimed that it is taking action. So far, how has it been?

Since the implementation of a directive in 2016, teachers have been given preference for housing at their places of employment, either by building on a plot of land or by purchasing condominium homes in cities like Addis Ababa.

University academics are excluded from this due to claims that they were receiving housing benefits, and their universities may be in a better financial position to have their own buildings and house the teachers. However, some city administrations, such as Addis Ababa, have already started offering housing subsidies to their general education instructors.

For teachers, a home is not just a place to live but also a place to work. Regions like Oromia have long been doing outstanding work in providing teachers with houses by giving them land to build on. In Addis Ababa, some 5,000 instructors were also given condominiums.

For the obvious reason that many other people of the community also urgently require homes, the housing question does not receive a prompt response. However, up until the end of the previous year, roughly 110,000 teachers received land on which to construct homes, along with a few condominiums.

The government was recently warned by university teachers to respond to their inquiries or face a strike by the end of September. What is the position of your association on that?

Discussions can help solve issues. Such actions have a significant negative influence, thus we don’t advise them. We should keep asking and be open to the strong arguments we hear while at work.

The administration views raising the scale and compensation as a difficult task, given the current economic climate. The Association also understands the situation.

The homogeneity of pay across various universities is one of several other issues that are currently being addressed. Our Association is attempting to mediate disputes between the government and educators. Both the things that the nation can change and the things that should be put on hold should be done.

Threatening with prerequisites is useless. We condemn that.

The government has been supportive of general education teachers at primary, secondary, and vocational schools, including acts such as granting land for them to build their homes.

We will continue to request the same perks for university instructors.

The government recently announced that universities will have autonomy, beginning with Addis Ababa University this academic year and expanding to ten universities in two years. What are your thoughts on this development?

The proclamation for university’s autonomy has been in existence for a long time. It is unclear how it would be used at all universities at this point, but they are starting with Addis Ababa University and expanding to other campuses. That is something that universities would like as well.

Several teachers work at schools, primarily private ones, despite not having completed the teachers’ training program, also known as the Post Graduate Diploma in Teaching (PGDT). Who are the association’s members and who are the teachers?

Any educator working at any institution is eligible to join. A teacher is someone who possesses the necessary credentials, such as the necessary training, education, and capacity. The worldwide standard is also being followed in our nation.

Not everyone who attended school for a certain field of study is qualified to teach. Additionally, it is essential to possess the required pedagogical skills. Teaching abilities and expertise should be present.

You can’t teach English because you studied it. This isn’t just a problem in private schools.

Do government schools hire teachers who have not received PGDT training?

Sure. When schools experience a teacher shortage, one option is to train applied science graduates in PGDT and hire them in schools.

Initially, the goal was for these graduates to be trained and deployed, but due to an acute shortage of instructors, they were authorized to begin teaching immediately.

This is an issue in both private and public schools. After much deliberation, the government decided to require instructors in both private and public schools to complete the PGDT program.

The requirement that teachers need to fulfill after completing PGDT training has actually been a part of government legislation for quite some time. This training is offered by a small number of universities to all teachers, domestic and foreign. Private schools will be required to pay for their own staff training.

Teachers in universities and in general education are unemployed in northern Ethiopia’s conflict zones. How is your organization supporting these educators?

University professors from the universities in the Tigray Regional State would be able to register online and request reassignment, according to a statement from the Ministry of Education.

Even while we know that some lecturers accepted the risk and continued to work, there may still be individuals in the area who are unable or reluctant to do so.

We have a list of the teachers who were displaced in relation to general education teachers. We are giving a small sum to a few of them as a sign of solidarity.

Our request for assistance in reassigning 43 instructors was made to the Ministry of Education and even the Ministry of Finance, but we heard back that neither the Ministry of Education nor the Ministry of Finance oversee any elementary or high schools.

We will continue to support them while putting pressure on the government to transfer them to any school and location around the nation.

How is the Association, a significant player in the education industry, reacting to the most recent changes and new rules?

The education reform research, which began in 2016, was the catalyst for reform. The public then debated it in 2019 prior to its implementation. University education was expanded to four years, and a national high school graduation exam was administered in grade twelve. In Ethiopia’s justice sector, Tamiru Wondmagegnehu is a colossal figure. He has been working for fifty years and has witnessed four regimes in addition to becoming a walking library. He has a master’s degree in legal studies and international law.

He started out as a judge under the imperial regime and eventually worked his way up to become the vice president of the Supreme Court, Special Court, and High Court under the socialist Derg regime. However, he was detained along with three other Supreme Court justices when the EPRDF seized power.

Following his release from prison, he founded the Tameru Wondm Agegnehu Law Office, which rose to prominence in the nation. Ashenafi Endale Of The Reporter sat with Tamiru to talk about Ethiopia’s legal system.

The Reporter: What similarities and differences can you find between the legal system, the institutional makeup of the judiciary, and its operations under the imperial rule, the socialist Derg, the EPRDF, and the current administration?

Tamiru Wondmagegnehu: The Ethiopian legal system can be divided into four periods: before 1900, between 1900 and 1941, between 1941 and 1974, and since 1974.

Since Derg, we have been ruled by autocrats akin to the French Revolution. Under these regimes, the courts have been altering their characteristics and duties.

Ethiopia’s triumph at Adwa falls under the first category because it is known around the world and has received attention. Four diplomatic consulates started operating right away in Ethiopia. Ethiopia became the only nation of color to be acknowledged under international law.

Following the 1648 Westphalia treaty, Europe came to the conclusion that there was no other nation state than Europe and decided to establish a European nation state. Therefore, only European nation-states were subject to international law before 1900.

According to international law, Muslims and Blacks in particular were not eligible. That is why Europe began its colonization of the western hemisphere, including its policy of rushing to conquer Africa.

No international law imposed sanctions on Europe. They consequently run ferociously to satisfy their need for resources and markets. Ethiopia was the only African nation at the time to have created its own state boundary.

In circulars he sent to England, Germany, France, and Italy, Emperor Menelik described and mapped Ethiopia’s active boundaries. Ethiopia did not draw its border with other African governments, but rather with European invaders. At the period, as to this day, Ethiopia was surrounded by European colonial governments.

What modifications were made to the foundational rules of justice by the regimes?

Fetha Negest, a 500-year-old written code of justice in Ethiopia, was created under Zerayacob’s rule. However, the zufan chilot (the king’s court) was the only institution at the top until 1900. All the officials of the kings judge matters according to their ranks.

Foreigners began to enter Ethiopia after 1900, and Fetha Negest was no longer useful for adjusting to modern rules. The first cabinet was founded in 1900 by emperor Menelik.

The emperor was under pressure from the foreigners, particularly the French ambassador, to create a consular court. Foreign judges were therefore permitted to sit as judges alongside Ethiopian justices after 1900. The consulate court operated from 1900 until 1941.

Emperor Haileselasie I disliked the consulate court system when he returned from exile in 1941. Thus, in 1941, he issued the Negarit Gazette’s founding proclamation for the first time. The second Negarit, which announced the development of a modern legal system in Ethiopia, was released that same year.

Haileselasie gave the order for English professionals to set up police and court institutions in Ethiopia, which were established at the supreme, upper, Awraja, and woreda levels.

The head of the Supreme Court was a foreigner. Experts received their education elsewhere. However, all of the judges on the supreme and higher courts were foreigners. This persisted up until 1965, when Niguse Fithawok, the first Ethiopian, assumed the presidency of the Supreme Court.

The final judge during the emperor’s reign was Hailessilase. After the emperor was deposed, there was a void. Thus, in 1987, the cassation bench was formally constituted.

I served as one of the justices on the cassation bench during the Derg administration.

Derg didn’t interfere with the system of civil courts. However, the government formed the military court system in addition to the already-existing civil court system. It never presented its cases before a civilian court; instead, it either executes its victims immediately or takes them to a military court.

Judges were therefore shielded from political interference.

The judges were fully removed when the EPRDF came to power. It stocked the legal system with cadres and individuals who could advance EPRDF interests. This persisted up until the 2018 inauguration of the present administration. There are several things that the present administration is working to fix.

What aspect of Ethiopia’s legal system is most lacking?

The practice of law is not based on reason but rather on experience. Justice must be acrobatic, just like life. Every judge gains knowledge from the rulings of earlier judges. Of course, some claim that this only applies to “common law” and not “civil law.”

Ethiopia adopts a system of “eclectic law.” This indicates that the principles were taken from several legal systems. Ethiopia’s legal system, however, is a little unclear.

On the one hand, we have the civil law cassation bench. However, a cassation bench’s ruling becomes law, and all courts below the bench must follow the sentence. The model is now comparable to common law.

The Ethiopian justice system has been disrupted by this difference in legal systems. Continuity refers to the use of prior judgments as standards for upcoming cases. Continuity is crucial.

Continuity provides predictability and confidence, two important advantages. Your win-loss ratio must be accurately known before you file a lawsuit. All of the stepping stone articles are already familiar to you. The courts would be unable to accomplish their jobs if every case required an interpretation of the law. A predictable life cannot be ensured by a judicial system like this.

In both the United States and Europe, attorneys provide clients with percentages indicating their odds of winning and losing. Ethiopia is the only nation without consistently applied laws. The main flaw in Ethiopia’s justice system is this.

The court systems and Ethiopian Bar Association must cooperate on this.

The Ethiopian justice system’s organizational structure is the second significant shortcoming. Ethiopia’s legal system was totally centralized, like one sun, one sky above everyone, prior to the EPRDF.

Ethiopia was divided by the EPRDF into nine different states, and that number is currently rising. There was discussion about how to reorganize the legal system after the EPRDF came to power and Kifle Wodajo was selected the leader of a group of specialists.

Some contend that, like prior governments, the justice system must be centralized. But the head of the Indian Supreme Court, Bagwati, present to offer advice, contended that Ethiopia cannot afford a decentralized court system. Others, however, believe that since the EPRDF formed a federal government, it must be decentralized.

Finally, the regional states and nine distinct court systems with nine supreme courts were approved by Parliament.

Ethiopia became the second nation after the US to implement a decentralized judicial system.

Under the US Supreme Court, there are 52 supreme courts. Because of this, America is the nation with the most lawyers. It is a new jurisdiction every time you enter a US state, thus the lawyers have to learn numerous laws in one nation.

The American federal structure is imitated by many countries, including Germany, but not its legal system. A decentralized court system was rejected by Nigeria, India, and many other federal governments because it was too expensive.

A decentralized court system appears advantageous at first glance. However, it is also expensive in terms of resources, both human and governmental. All we can do is hope and pray that Ethiopian leaders will be able to change this and unify the legal system.

How can the two main bottlenecks be eliminated at this time?

The constitution ties everything together. Ethiopia’s judicial system, however, can be centralized despite the fact that the structure is a federal one. India and Nigeria are two prime examples.

Currently, if a lawyer in Ethiopia wants to practice in many regional states, he must obtain a license from each of the regional states. However, if Ethiopia’s justice system is centralized, all of the regional states use the same article. A single license allows a lawyer to practice law across the entire nation.

In comparison to a federation, Ethiopia’s legal system is more like a confederation of states. Such a system is unique to the US, and only they can afford it.

Ethiopia is a small nation when compared to the size of America. Therefore, a decentralized justice system is not needed. It is incredibly difficult to reform and modernize Ethiopia’s judicial system. There may still be ineffective judicial systems in remote areas of the nation even after creating a centralized one.

How can the present border disputes with neighboring nations be resolved given that Ethiopia’s boundary was shaped by colonial powers?

England, France, and Italy all had boundary accords with Emperor Menelik. However, agreement does not imply demarcation. Ethiopia naturally agreed with England but not with Sudan. The current issue with Sudan stems from this.

The Prime Minister of Sudan, Alnimeri, and Haileselasie got along well. Just before the emperor was ousted in 1972, they were about to start demarcating the border. I hope Sudan and Ethiopia will start the delineation process right away.

Emperor Yohannes pleaded with England in the 1870s for assistance in keeping Masawa under control. Even though Yohannes assisted them in rescuing English troops in Sudan who were being surrounded by Mahdists, England refused. Meles Zenawi voluntarily gave over Assab a century later.

This is a huge contradiction.

But the situation with Sudan is becoming increasingly complicated.

As long as the 1972 agreement is in force, it can be resolved. The issue is that the borderlands’ value has increased recently. Ethiopia’s biggest issue is the absence of a succession plan whenever a new regime takes power.

Haileselassie came to an accord and was about to draw the line with Sudan. Sadly, Derg surpassed Hailesselasie. Derg, however, started over after stumbling everything the emperor had begun.

No Ethiopian administration adds on the successes of the preceding administration. Whether it be with the legal system, politics, development, or anything else, this is the root of practically all of Ethiopia’s problems.

Others have suggested Ethiopia may be able to reach the Red Sea via Ras Dumera, a thin free line that runs between Eritrea and Djibouti border.

Africa is home to fourteen landlocked nations. There is no other nation, however, that is as big, and as populous, as Ethiopia. The thirteen African nations that were already landlocked begged the UN to intervene before Ethiopia became landlocked.

Aid couldn’t get to these landlocked African nations. Even when a machine is replaced by a different brand, spare parts still come in. Because perishable goods take longer to reach the landlocked countries, importing them was unimaginable.

In order to negotiate between the African states, the UN tasked Yusuf Ahmed, at the time Ethiopia’s transport minister. This occurred under the Derg, shortly after which Ethiopia became a landlocked country.

A Kenyan academic once stated that Africa shouldn’t have more than 20 ports-accessible nations. He claimed that because even tiny governments are permitted to be countries, landlocked nations are created, dividing Africa into 55 countries.

However, the AU is introducing a very efficient procedure to grant all African nations access to ports. This will become a reality once the African Continental Free Trade Area (AfCFTA) is completely operational.

Of course, until Ethiopia uses them, the ports in Djibouti, Eritrea, Somalia, and other countries on the horn of Africa stay inactive. Masawa Port was undoubtedly a crucial tactic in WWII, acting as a stepping stone for the allied troops’ advance into Eastern Europe.

Currently, Ethiopia is attempting to enter Berbera port, which is positive.

Haileselasie made every effort to integrate Eritrea into Ethiopia in order to get access to the port. Assab port is obviously useless if there is a blockade of any type at the Suez Canal or Babel Mandab. Ethiopia is better off using Berbera port. There is nothing anyone can do because Berbera is the gateway to the ocean.

How can Ethiopia’s efforts to secure ports be impacted by Somaliland’s de facto status and lack of recognition?

The issues in the Horn of Africa can only be solved by peace. The horn has a sizable population. The chaos persists if this force is not used to development. Countries in the Horn of Africa must work together for the benefit of all.

The fewer jobs we produce, the more unstable we become.

Why do young people join OLF-shene, TPLF, or other armed organizations when they could get a respectable job, a home, a car, and vacation packages? Everyone wants to see equal development because they want to see their own country prosper.

Progress can lead to peace.

Due to the absence of an independent African state at the time, Haileselasie was banished to England. For that matter, there was no state.

Many people agree that Africa’s instability stems from the distribution of the same ethnic groups among its various states. Can African countries redraw the borders that colonial forces drew and reestablish nation states?

Ethiopia was at the vanguard of African decolonization in 1963, when the Organization of African Unity was established in Cairo. The main issue when the UN decided to decolonize was how to recognize and define the borders of African states. War was imminent amongst Africans if they had to trace frontiers back in time.

The UN and OAU ultimately opted to keep things as they were. In other words, borders and states begin at the location of the colonial boundary.

Each nation in Africa has territorial claims. We can’t, however, go back in time and fix it.

Ethiopia once ruled a sizable region, including the modern-day nation of Yemen, during the administration of King Kaleb in the fourth century. But we can’t claim it now.

The answer is that by uniting Africa through the AfCFTA, the AU’s economic integration agenda can eliminate the need for political frontiers.

Of course, Ethiopia is the nation that will be most negatively impacted by the status quo. The Congo, a sizable nation abundant in natural resources, was about to become landlocked. However, they were able to enter the Atlantic Ocean by Kabinda that was incredibly small. By the way, Congo provided the uranium for the bomb dropped on Japan.

A little opening between Djibouti and the Eritrean border allowed Ethiopia to reach the Red Sea. However, nobody is willing.

A serious hunger broke out during the Derg, and Nordic nations wanted to send aid cargoes. However, there was no way for the supplies to reach Ethiopia. Nobody would have protested if the Derg had taken one of the ports in the Horn of Africa at the time by force.

Ethiopia’s survival will depend on how its ports are handled in the current context of rising import volumes and growing population. It will either receive a peaceful response or a harsh one. Ethiopia must have a port, if only to use the congested route between Eritrea and the port of Djibouti.

The Ethiopian government also has to improve diplomatic connections with the surrounding nations so that they will consent to us establishing our own port.

Do you believe that Ethiopia’s conflict and ongoing instability are a result of the country’s power structure?

Ethiopia’s primary issue is underdevelopment as a result of missing out on the Enlightenment, the Industrial Revolution, the Agrarian Revolution, and the Technical Productivity Periods of the middle Ages.

According to Gibbon, who lived two hundred years ago, “the Ethiopians slumbered for over a thousand years, oblivious of the world by which they were forgotten.”

Of course, since we remained closed, we were not colonized. The mountains of Ethiopia were impenetrable to any force. Due in part to the progress that colonizers sparked, several African nations outperformed us.

Ethiopia nevertheless continues to be rich in resources and treasures. The only nation in Africa with a written past and its own alphabet is Ethiopia. 80 percent of Ethiopia’s bibles were completed and authored in the sixth century. At the time, the western bible was still in its infancy.

Additionally, Ethiopia was crucial in the spread of Islam and Christianity. Ethiopia was the destination of the first Hijira, not to Meca and Medina.

Unfortunately, because we were isolated for a millennium in between, Ethiopia’s civilization did not maintain its early impetus. We woke up when the world is already way ahead of us. We were still plowing the ground with oxen and yolk when Ethiopia awoke once more.

Youth in rural communities no longer have access to land for farming as a result of the land policy. Therefore, everyone is moving to the cities. Not only are Ethiopian towns crowded, but the proportion of farmers is out of proportion to the country’s growing consumerism.

Unemployment is widespread. There is a shortage of farmland. Ethiopia’s current issue stems from this. For the first time, PM Abiy Ahmed is attempting to spread large-scale agriculture to lowland areas in addition to the rain-based, often small-scale farming in highland areas.

What do you think of the administrations ongoing judicial system reform?

We voluntarily submitted to Ethiopia’s complicated legal system. One institution cannot bring about justice system reform. Huge amounts of public resources are being used by the decentralized justice system.

Ethiopia cannot support a decentralized judiciary when dozens of regional entities each have their own legal framework. This has to be combined.

Abiy recently complained to the parliament about how corrupt the legal system and police are. A few judges have been furious. It is well known that some judges accept bribes. Even judges of the top court experience this.

It is incorrect to hold the PM responsible in a legal system as tainted as Ethiopia’s. Though it is a challenging undertaking, we must find solutions to fix the issue rather than pointing the finger at one another.

The Court has the most authority in any nation that wants to advance. The future of the nation, business, and daily life depend on the Court.

What big setback do you believe has occurred since PM Abiy came into power? Was the transition peaceful?

We must research the causes of our ups and downs. Ethiopia has not done a very good job at nation-building. There are distinct state borders in Europe. However, the societies are very interconnected and quite similar. They are similar in terms of culture, languages, and universities. But the Ethiopian society has been segregated from one another, living in separate cultural enclaves.

Social media is currently dividing our society even more and pitting everyone against one another. Nobody is accepting accountability. We have much work to do in order to build a civilized society.

Ethiopia’s unemployment and unrest don’t surprise me because I am aware of our incapacity to provide quality labor and excellent jobs.

Five years ago, nation-building and good governance were the social movement’s top demands. Today, the issue has expanded to include the state’s continued existence. The student movement during Haileselasie began with a “class struggle” and concluded with ethnic politics in a similar manner. Why do political groups in Ethiopia consistently fail to achieve their goals?

Due to the students’ limited exposure to other ideas and the “class struggles” popularity in Cold War-era politics, the students’ movement adopted it. However, the class battle diminished and gave way to an ethnic conflict, which Meles Zenawi pursued.

Many Ethiopian academics today, particularly those in the diaspora, believe that ethno-nationalism poses a threat to the state’s very survival.

This indicates that the nation-building process in the country has been derailed by ethnic identity politics, which is having an impact on both the nation-building process and the state’s very existence.

Nationalism is not necessary for Ethiopia. The United Kingdom, France, the Netherlands, and even Italy are examples of nation states. The US, however, is not a nation-state. Europeans make up half of the American population.

One hundred years ago, Ethiopia became a nation-state. However, due to a number of criteria not being met, Ethiopia was unable to become a nation-state.

Many academics, particularly those from Addis Ababa University, continue to vehemently inform the media that Ethiopia needs to become a nation-state.

Talking about nation states now is a farce. Instead of a nation state, Ethiopia needs to be a patriotic state. Everyone in their own ethnic group is patriotic. Every Ethiopian, including Oromo, Kembata, Amhara, and everyone else is a patriot. That is what the United States is.

Everybody is present in America, including Latinos, Chinese, Indians, French, and Blacks. However, they never give up on the United States, which is their nation. Although they are patriotic states, they are not nation-states. To advance a patriotic state, we must work together.

In Gojam, there is no such thing as a pure Amhara. Every ethnic group has ancestors from different ethnic groups. Only our names reflect our racial origins.

Ethno-nationalists and ethio-nationalists swing back and forth in Ethiopia’s politics all the time. This constantly sparks conflict and a struggle for dominance. How can we transform it into a nation of patriots?

The constitution may impose restrictions on it. It can be written into the constitution if everyone agrees to it. Otherwise, Ethiopia will experience civil conflicts and revolutions.

Many people concur that the majority of Ethiopia’s issues can be resolved if the present constitution is altered. Do you agree?

It should be altered, in my opinion. Both educated and uneducated individuals are condemning PM Abiy for sticking with the current constitution. The constitution is frequently compared to an Ark. If the public does not believe in the law, it is just a piece of paper.

Therefore, if a carefully considered constitution is substituted, Ethiopia’s issues can be resolved.

Human rights advocates and even government representatives claim Ethiopia’s judicial system, especially the court system, is unprepared to handle cases involving human rights violations. They advise Ethiopia to start accepting the jurisdiction of extra-national judicial systems as a result. This means that Ethiopia must recognize the authority of regional and international tribunals over any violations of human rights.

Does doing so undermine Ethiopia’s sovereignty?

Only when the executive, judicial, and legislative branches operate in accordance with the check and balance principle can Ethiopia’s justice system be said to be in operation.

Judges are only answerable to the law. Because I criticized the Derg’s military court system, I was removed from my court position. Since 1948, Ethiopia has fully embraced the rule of law. Judges must, however, exercise their authority.

Courts have full authority to resolve any dispute, with the exception of arbitration disputes. Ethiopian courts have the authority to adjudicate matters involving violations of human rights, particularly at the high courts and Supreme Court.

The establishment of a different type of court system in Ethiopia must be spelled out in the constitution. For human rights matters, we can set up special benches, but we cannot establish a separate court or division.

The UN human rights commission is currently requesting entry to the country in order to examine human rights abuses that occurred during the Tigray war. The agreements and treaties were approved by Ethiopia. What would happen if Ethiopia resisted?

We have observed that the west consciously wants to harm Ethiopia in numerous instances. Since the founding of the League of Nations, this has been the case. Sanctions are being imposed on Ethiopia.

Mussolini would not have been able to attack Ethiopia if only the US had imposed gasoline sanctions on Italy. Because the US continued to supply fuel to Italy at the time, Mussolini resumed the invasion.

Ethiopia was brought up thirteen times in UN Security Council discussions last year.

International law thus serves as a vehicle for both justice and abuse.

The US regularly uses the UN to impose sanctions on nations it wants to destroy.

Never should Ethiopia yield to outside pressure.

Ethiopia has ratified a number of international human rights accords and conventions. By the way, Theodore Roosevelt’s wife was the one who first proposed the 1948 Universal Declaration of Human Rights (UDHR).

It forbids the use of cruel or inhumane punishment. Ethiopia had a death penalty at the time. The emperor delayed ratifying the UDHR rather than repealing the death penalty law. Ethiopia, however, is the first country in Africa to sign the deal.

Politics is at play right now, not just a general worry about human rights abuses. Before authorizing foreign investigators and acknowledging their jurisdiction, it is imperative to exhaust all domestic options. Extra-national venues may be taken into consideration if there is no statute allowing human rights victims to appear in court or if the court is unable to uphold the law.

America commits to defending democracy. Democracy is the majority’s way of ruling. Therefore, by simply agreeing, the majority can flip the truth on its head.

Can the Chief Justice of the Supreme Court call the executive to inquire of him or her? How are checks and balances made?

The Chief Justice of the Supreme Court lacks any judicial or executive authority. The president only serves as the court’s speaker. The president only responds when asked.

By the way, a judge on the Supreme Court is distinct from a judge in a lower court. The author of ye’ ewunet Mirkuz, and a lawyer, Wondimu Ibsa was born in 1947 in Arsi. Having survived the 1969 revolution, he joined Wez League and then started teaching. In his career as a former politician, Wondimu had gone through several challenges as a former politician before becoming a lawyer. He survived the 1969 revolution in Ethiopia and was arrested in the famous Maekelawi for 150 days. When he decided to become a lawyer, his first task was serving political prisoners facing terrorism charges. Lately, he is more known for sharing his political views on main stream media outlets. The Reporter’s Selamawit Mengesha sat down with him, as he reflects on current affairs and his journey in politics of Ethiopia.

The Reporter: can you tell us a bit about yourself?

Wendemu Ibsa: I was born in what is considered a large family. I had 17 sisters and brothers and my father had 47 children from 3 different women. When I was growing up the schools in Arsi used to encourage us to learn Amharic. And some people associated it with racist remarks but it was purely to help us learn other languages.

I was amongst the students who survived the 1969 revolution, I was in ninth grade and I remember crying to my mom when soldiers would beat us senseless. When the ‘edget behibret’ campaign started, the Ethiopian People Revolutionary Party (EPRP), wez league (ወዝሊግ) and All Ethiopians Socialist Movement (AESP) were wreaking havoc across the country.

I joined senay leke’s party Wez League. Students whose average was above 90 were selected to give after class courses back then, for which I was selected. I started working as a teacher starting from 1969 to 1971 with a 180 birr salary. Through all of this, we were running the revolution on the side.

I’ve went from having my parent’s religion to having no beliefs but I eventually got baptized at 40 years of age and became an orthodox Christian. I then worked as a money collector at the church for four years.

I was also detained in the famous ‘Makelawi’ for 150 days, when EPDRF took power in 1983.

I’ve also worked as a supervisor and a director in Hawassa. As a lawyer in Adama, I joined the Oromo Federalist Congress in 1998–2002. In 2006, when more than half of OFC members, including Merara got arrested, I decided to give my services as a lawyer. Back then, lawyers used to charge more than 300,000 birr to represent people accused of terrorism, because representing people accused of terrorism could label them as terrorists as well. Knowing this, I offered my services at makelawi for free, and since then I have represented 600 people accused of terrorism.

When I was serving free of charge, I faced a lot of opposition from people including my family. I remember a judge telling me that I can’t defend people charged with terrorism anymore, but 17 of my colleagues had already decided to represent those accused of terrorism.

Prime Minister Abiy Ahmed (PhD) has said they will not arrest anyone without due diligence, yet we are seeing a lot of people arrested abruptly and detained for several days without cause. What do you think changed?

“We don’t arrest without due diligence,” is just a political way of speaking. Currently, the parties in Ethiopia including the incumbent follow a party politics system, meaning it is the top executive’s playground. A political party stands for justice for those that are with it or against it. The parties in America, the republicans and democrats, are political parties, while Prosperity Party, Ezema, ABEN, Enat, amongst others, look like they are trying to shift from party politics into political parties.

A lot of Ethiopians were involved in the green legacy campaign. But out of the 53 parties, not more than 10 were involved. Why weren’t the rest involved? The legacy is not for the PM but rather for generations to come. They could have contributed to something that made a difference but the only objective of party politics is to obtain power.

When Abiy said that, it was in the essence of party politics. To whom does the PP belong to? Is it for the prosperity of the city, the rural area or the farmers? It should have been called “Ethiopia’s prosperity political party.”

Political parties care about the country, its people, history and culture. Even if political parties try to gain power they still stand for the people. The Civil Code, which has been in action since 1952, says that people can be arrested based on suspicion with or without a court ruling. Back in the feudal days, it was only allowed to arrest suspects from 6 in the morning till the sun sets but not after even if they were guilty. Police can surround him but they can’t arrest him, no matter who the person is. If Abiy does not practice this law, then the EPRDF and Derg’s plague hasn’t quite left his system yet.

The practice that is becoming normal these days where they hold people in prison for eight or nine days is not acceptable by law. Statements like “We don’t arrest without due diligence” are said with a political intent. Politicians and political parties think about what to say to get more applause instead of thinking what would actually benefit the people.

What is the cause for the killings of innocent people in Ethiopia? Who do you think is responsible for these acts?

The instability in Ethiopia has its roots dating hundreds of years back, back when colonizers had their eyes on Africa. The victory at Adwa was not just a victory against Italy but against the whole of Europe. Ethiopians used to unite to defeat these outside forces. When the west found out the secrets to Ethiopia’s victory happened to be in our unity, they needed to dismantle this unity through civil wars and parties. These parties who have a budget from the west have the sole purpose of creating conflict and rift between ethnicities.

Controlling the source of income was also a measure used by the west since the country is dependent on donations. After the 1945 World War, Japan was forced to adopt a strong military system. Within 30 years, Japans capacity was just as good as the UK, after changing the policies they were forced into. The donations are an indirect attempt at colonization.

The crimes we’re witnessing today is a result of years of planning by the west. There is this thought process circulating where people think their ethnicity came first or that it is better.

Even banks organize themselves based on ethnic lines; they have the “divide” mentality. People that are losing their lives are Ethiopians and there is no need to classify them based on ethnicity. Being proud of your ethnicity only validates Ethiopia more, because our ethnicities are found within Ethiopia.

If we take the religious approach on how humans originated, it started with Adam and Eve. They were human beings and not Amhara or Oromo. We are Ethiopian’s first then ethnicity follows; so, to refer to the atrocities in Wollega as atrocities committed on Amhara women is accepting the narrative pushed by colonizers.

Amhara’s policy is Oromia’s policy and vice versa; we can only salvage Ethiopia when we stand all for one and one for all. Being Oromo, Amhara or any of the other 80 ethnicities is natural but claiming one is superior over the other is immoral.

How do you think this can be mitigated?

Parties and politicians that stand for terrorism should be dealt with to make way for the people to have an active role. The government feeds 1.7 million students in Addis Ababa and its surrounding. It provides books, uniforms and bags. The only thing families worry about is providing the dinners. This is not something to overlook. When I say this am not saying prosperity party or Dr. Abiy are without flaw, all governments have flaws.

The community’s outlook on laws and courts is relatively better than it was before. Do you think this has anything to do with the organizational change? If there is change since most organizations are individualistic, how can that be mitigated and continue long after the individuals have left?

Prosperity Party asks organizations to help it achieve democracy. A strong military can only be formed when there is a strong organization. Law enforcement is the government’s duty while respecting the law is everyone’s responsibility.

In a meeting amongst 1000 lawyers in Oromia held by the Oromia Lawyer’s Association, a lawyer said “there are no courthouses in Oromia, or judges. The only place where judges and courthouses exist is at the Oromia Supreme Court.” But there are Oromo judges and courts in Ethiopia. If we’re accounting for injustices, then every other supreme court could come into question. The acts of a few lawyers and judges that are deeply intertwined in ethnocentric beliefs do not dictate the profession as a whole. Even the PM has no right to misjudge the profession because there are honest judges and lawyers.

What should be done to promote accountability? Would people who have violated human rights be questioned in the court of law?

The current atrocities are due to terrorists, whether they are Oromo terrorists or Amhara terrorists. Both cultures have their own way of justice that involves forgiveness. The involvement of the elderly is needed.

Political parties are creating a better life for their children while condemning the innocent. Those responsible for these acts of terrorism shouldn’t be judged in court. All the region’s religious leaders and elders should judge and reconcile things themselves.

The newly formed National Dialogue Commission plays a vital role for this, but political parties have been skeptical since its inception. If all Ethiopians come together, it will help the national dialogue to be successful. As politicians put it, the dialogue is not one carried out between parties but one that involves farmers that make up 85 percent of the population. As of now racist politics and ethnocentric politics have spread.

The current problem will not go away easily. It will take several years of working together.

There is a noticeable change in courts after Meaza Ashenafi took power, but there are also a lot of problems at the same time. Just like how a teaspoon of poison could ruin a barrel of water, the acts of a few taint the entire institution.

How can we stop the problems in all the regions of Ethiopia? How can the region’s questions be answered while maintaining peace?

The people should give information as a way of solidarity with the government. The 547 representatives at the Parliament represent 120 million people. For a parliament member to talk about their own ethnicity alone is really shameful, they are not there to represent the Wereda that put them there but to represent the people of Ethiopia.

If there are people in Parliament that spread fake news, then prosperity party is negating its own progress. There are a few that are openly opposing the death of fellow citizens. When a citizen is hurt in wollega, there should at least be an opposing brief against it from the Parliament. If prosperity is leading the country, a region’s Special Forces should be able to help another region’s army. The defense force alone cannot save the country.

Rophnan Nuri, commonly known as Rophnan, is a prominent performing artist, musician, DJ, singer, songwriter and an audio engineer that blazed a trail for Ethio-infused electronic and house music. The Artist made a name for himself as DJ Rophi before releasing his first album, Reflection, in 2018. The album made him the first ever artist to release an electronic music LP in Ethiopia, becoming an influential figure locally and internationally.

Mixing traditional sounds with futuristic undertones and a powerful lyric, he dedicated his debut work as a voice for his generation. His work earned him multiple awards, featured with world famous groups like Major lazer, and collaborated with the Zambian rapper Chef 187 on the coke studio stage. He also held a successful country wide tour for a year and half.

His work and demeanor has earned him a feature on Forbes Africa’s 30 in the creative category, making him the first Ethiopian to feature on the list.

He recently released a successful album “3” earlier this year, which he followed up by “6” this past week. The two albums, which were released after his deal with Universal Records, offer incredibly produced music directed at the youth.

Rophnan announced the final album of the trilogy will be released before the end of 2022. Yosthena Aynalem of The Reporter sat down with Rophnan to talk about the mystery that is Rophnan Nuri.

The Reporter: let’s start from the beginning. Can you tell us about your upbringing and how you got into music?

Rophnan: Funny enough, it did not start out with music for me. Yes, I have known and loved music all my life but my journey did not start there. I am a singer but I am not just a singer, or just a writer. I am a recording artist that engineers and produces as well, but I am also a DJ. I think when you’re all of these things your journey must start with one thing. For me, it was recording.

I started recording sounds from a young age and little by little I went from recording to learning the guitar, DJ’ing and then singing. It all unfolded gradually to make me the artist I am today.

I remember I started recording my mom when I was 10 years old. That was my first experience of getting into music. Because to me it wasn’t just music, I thought everyone had the same relationship with sound and music as I did. Through time, I came to realize that not everyone was drawn to it the same way. At that age, I used to perform in front of students and they would love it, but I thought that was normal at the time.

I started recording my mom out of the love I had for her, I would use tape recorders that I make from scraps; I have always been a physics head because it helped me know the world better. I would always make things up from run down electronics or collect parts like dynamos; I have always been that kid.

I always wanted to keep a record of my mom’s voice in my tape recorder, so I’d play it on repeat until my battery dies and that was a 10-year-old me falling in love with sound and frequency. From then on, I started recording my little brothers, my neighbor’s kids, and my friends.

It became my way of keeping a photograph or picture of some frequency, those records painted pictures in my head that ensued emotions in me just like a picture would. I have recorded my mom till my last conversation with her, she is not here anymore, but I’ve kept her voice till our last conversation, so I have basically recorded my mom for 21 years.

So, how exactly do you experience sound?

I always see colors when I think of sounds, even when I am asked to do commercials. I will always ask them what their theme color is so I have a sound for that color. Every color in the way it’s painted or crafted has the same pattern in music because in order for something to exist it needs pattern. Music and creativity have a pattern of their own. A very good example for this is the project I did in Dorze in my first album, it was literally the pattern of their denguza (Welayeta Traditional Cloth) that inspired the music, and it is a mixture of black and red patterns.

So, the pattern on this attire is that when one color goes in, the other goes out, their song is the same way, so you can represent the color in different voicings and you have a pattern which is a harmony and the Dorze people are one of the most harmonious people and that is one of the things I learned from them.

Harmony is everything. It is embedded in their music, their day today life, culture; they know how to sing and be in sync within. That is how I see sound no different than pictures or any creative work.

What classes have you taken to master your craft?

Endless practice and my experiences were my lessons. I remember building my first studio with Abu-Walad biscuit box and Miyota DVD microphone when I was 13. I continued performing in class rooms and jamming, and I have also been listening to FM Addis 97.1 from the first day they opened. Eventually I started working there for three years later on in my life.

I think I was 10 or 11 when they started and from that moment on, my whole teenage time was spent listening to a lot of radio. Radio became a huge part of me, sound was everything because my experience is my mom’s voice but I started hearing her voice through other moms. Even when I travel and record, I know that tone, it has the same spirit.

A sound does not lie. That is why mostly my music is based on tone and notes. These are my inspiration when I make my music especially when I am trying to go deeper in the culture and get something out from it.

At what point did you start DJ’ing?

I started DJ’ing or I would say playing in mini media at the age of 15. I got introduced to computers at the same time and realized there is a thing called “software,” which allows me to record vocals and play with instruments that are already recorded, make patterns out of them and make music. So, I started doing that when I was 15.

What most people don’t understand is the reason my recordings are clear is because I’ve been recording for 21 years. I am more experienced than most people who are in my age group. I have been producing for 17 years now and I just turned thirty-two. So the reason why my production is this good and I am getting better every day is because I have been doing it for a long time. You have to understand that this recording, this clarity and this skill doesn’t come easily. You have to work on it and you really have to put your time.

When I turned 17, I actually started DJ’ing. I got introduced to a DJ mixer. I put out my first mixtape when I was 16, remixes of songs at that time, whether Amharic or English, I literally did what I used to do in the classroom and changed it into a record.

I already had recorded data in my head and the computer allowed me to turn that into a recording so I started DJ‘ing that music. It was a way to put my music out. It became the best platform for me instead of being a guitarist, a vocalist or anything else. DJ’ing was the first introduction for me to put my music out and then it goes on to working in Radio.

I used to play my mixtapes on the radio when I was 18, 19 or 20 and that gave me the platform to be famous. After that, I put out my second mixtape and then I continued producing even more, production has been there since I was 15 till now.

When I turned 21, I stopped putting out mixtapes after the third one because I wanted to do an album of my own. It took seven years of my life in the studio, worked day and night, 16 hours a day, every day, while DJ’ing at night and paying rent. That circle went on for seven years straight and then Netsebraq was born.

I went from 21 to 28 years old doing nothing but producing, learning how to write, learning to sing better, learning how to record, buying new better equipment, working on myself and my craft. It took everything out of me.

That is why Netsebraq sounds the way it does, it was crafted from scratch and I found a new sound for my generation the world has never heard of, a new sound for my country and for the industry and that took time.

I found myself in music, in a new way of writing, progression, of sounding, recording and all this took time. It was not just a project. Its impact can be seen through DJs coming into the mainstream, singers to find themselves. I hope I am not fooling myself when I say this but, I think Netsebraq proved to artist to be themselves and to sound like themselves. It brought free thinking to this industry but it didn’t happen overnight. It was something that was crafted for a long time.

When was the first time you Disk Jockeyed professionally?

I started doing my own Day Party’s after high school in college where I started throwing parties for people in my own age group and a lot of people came to my sessions. Back then, there was no platform you can use like Tik Tok so people just attended my parties using flyers and a lot of people showed up because of the mixtapes I used to release. At those parties’ attendees didn’t pay attention to the music, just how it made them feel, they don’t really understand the craft.

Out of the whole experience, what has been your favorite part?

Definitely my first album release party, because I had been working none stop before that and when reflection happened, I was famous in most cities as a DJ. I would go to Arba Minch and pack a place of 2000 people, as a DJ I was doing really well. I was making good money and had good exposure as well, especially on the last year before Netsebraq.

Netsebraq brought me to the stage as a singer, song-writer plus a DJ. The DJ part has been subtly following me. But my first album release party was a very special moment for me. It was three months after the album had dropped and the place was packed, people were at the gates lined-up because the place filled up early.

All of that happened within three months and it was very historic. An up-and-coming artist, who is a DJ, selling out a concert was not common; it was unheard of then. For me it was a moment I will never forget, because I remember the energy that night. I had never seen an energy like that in my life, that made me think to myself “oh wow, I have made it this far.” Seeing people sing along to songs that I wrote felt surreal, something I created spoke to them enough for them to know it by heart and that truly astounded me.

To answer the question, the release party truly stands out for me, especially when I was playing the piassa song. I remember time freezing, my friend and fellow DJ, who I grew up with, was back stage with tears in his eyes because of how amazing it was. We used to walk back home after DJ’ing because the first two years of my career, I didn’t have enough money to even pay for my taxi-fare home, so we walked to places instead. I dropped opportunities my family offered me to go to the US, I dropped out of Piloting school after completing almost everything, and I then joined computer school.

And were your family supportive through all this?

Well, my brother wanted me to go to Pilot School, he was ready to pay for it and arrange everything. I went and did everything, I didn’t think I would get in but then I ended up getting in. When I did, I went to my mom and told her that I made it in, that I could follow this path and that I didn’t think it was for me.

The only thing closer to music for me at that point was computers and I would rather go and study that. And she was very supportive, she said ok and that I should be careful. My family had always been supportive of my aspirations which I am forever grateful for.

I remember when I finally got the deal with Universal Records, the first thing I did was to tell my mom and record her in the process. She was always willing, she never turned me down. She was always there for me, had she said no to me backing out of pilot school back then, I would not be where I am today. Rophnan, as a musician would have never existed. I am forever indebted to them for that.

My father on the other hand used to always tell me “Whatever you do, sell it.” He never told me what to pursue or to stop music just that I should do what I love and whatever that is I should sell it. He raised all of us like that, if you love something learn how to sell it, so you’d learn to perfect it and love it even more. Selling it would give you the money, time and opportunity to grow it and polish it into something better.

If I never sold my first mix tape, even if my first salary was just 500 birr, I wouldn’t have had the resources to support my endeavors down the line. Money is money no matter how small it may seem; it will serve as a stepping stone. I am not saying to just do it for the money but you have to account for your time with something; gain something from it, no matter how small it may seem because your time is the most valuable thing you have.

You are currently amongst one of the top artists in the country, yet you are very private, not very active on traditional media but you’re also active on social media, why is that?

I wouldn’t say I am private, because I am always posting. People know what I eat, what the studio looks like, where I work out, when I’m working. If you ask an average person who follows me on social media what I do, they’ll tell you that “he eats healthy,” I go to gym at midnight.

But as for media, I usually don’t go out unto media because I don’t really have anything to say. I have been away from media for around two years now and that’s mostly because I didn’t believe I had anything substantial to say and I don’t want to come on and lie, so I chose not to say anything.

I am the kind of person who likes to understand people’s truth and delve in to it. I believe a lot of truth is subjective and I am open to hearing other people’s truth but I know that a lot of people don’t see it that way.

What I consider my truth might not be what people want to hear. So, if I were to come out on media and say what people want to hear and not my truth, it would be a lie. I never want to lie to my fans; that is disrespectful. I would rather communicate with my people through social media and show them what I hope would inspire them, show my craft and take them through my creative process. And when this album comes out, it wouldn’t be alien to them because they saw the work that went into it through my social media posts.

I would rather communicate through that because who am I to comment on things I don’t know and understand.

I know and understand that everyone also has their truth that they’re exposed to and I am nobody to negate or support that. Until we all find a common ground of saying I respect your truth as much as you respect mine, I don’t see the importance of going out in public and creating controversy instead of looking for a solution because we can see that nobody is listening to anybody anymore.

Everyone is looking for voices and opinions that confirm their truth instead of openly listening to everyone unbiased. So, of course I am private, because I have nothing to share that my fans don’t already know. I am just as confused as everybody else and if I can’t help, I would rather listen and try and learn about everyone’s pain and truth.

And to me, music helps me do that.

Interesting, steering a bit off topic, you’ve mentioned you regularly attend the gym at midnight, why do you do that?

For me, it’s more mental than physical, because I don’t want my studio to be the hardest thing that I do in my day. Because the hardest thing is always seen in comparison, the hardest part of your day is the most dreaded part no matter how much you love it.

To not lose the love, I thought I would create something more challenging for myself. Now for me, the studio will continue to be more exciting because it’s not as hard as getting up at midnight and going to the gym. Contrary to what most people would think being in the studio is very tiring. You sit there for hours and hours daily; the not knowing of what will come out of each session creates a lot of anxiety as well, so when I add the midnight gym on top of that, I would have a much harder thing to do, which pushes me to like the studio better.

I needed that push because I had to finish three albums in two and a half years. It took a lot out of me and not just me but it took a lot out of my management as well. To deliver three albums in this time frame was really hard. Normal working hours don’t quite cut it.

Back in the days, it was really hard for artists to make a living off of music but the tides are changing now and artists like you are making a difference in that. What do you think propelled that change from your part and your peers as well?

I know it is getting better comparatively but it is not on the trajectory it needs to be at. There are still artists that are not earning their fair share but I think YouTube democratized so many things. It gave the power to artists to some extent. What got better is not the payment but the exposure. Artists get to be discovered in a quicker, better way.

As for back in the day, if the person who worked at ‘hire treat’ did not like you personally no one would know your name. Now, we’re exposed to more artists because we have access on our own terms. Young artists have better platforms now and bigger exposure where their music gets the chance to be discovered by many.

For me personally, I am rooting for all of us. When I hear an artist getting paid a million birr or dollars for music, it makes me ecstatic whether I like the music or not. It makes me so happy because the industry is getting paid this much, which is a win for all of us. It would mean fewer artists who are unable to support themselves and their family through their craft.

At least they would set a standard of artists earning a good life. I think what is happening is there is the YouTube market that is supporting local artists. Even if the public isn’t directly paying for the music, they are exposed to it at least. There are platforms that would support artists even more like Awtar but people barely use them.

When people buy the music, the artists will directly benefit from that so I encourage listeners to get their music from platforms like that. I think that is the main market but for now, YouTube works wonders for the industry.

What are your thoughts on people saying Ethiopian music died after the golden age? Some might say today’s music is more diverse and the time for it is now. What is your input on that?

Whoever says the time for Ethiopian music is now, I just want to say that I appreciate you all. Because a lot of people discourage what the industry is right now, saying it could never amount to what it was back then. The way I see it, if you grow up listening to any type of music, even if it’s just whistling, you’re going to have an attachment to it because it would be nostalgic.

It is hard to compare today’s music to something that has been part of people’s memory for 40 plus years. There is a lot of memory attached to it that can’t be compared. It is like expecting a new born baby to win a race against a 40-year-old, if you were to give 20 more years to the new born they will definitely win against a 60-year-old.

So, if you give us time, we too will have that nostalgia factor that would make us amongst the classics in people’s mind. Every generation has a favorite and it mostly has to do with the memory attached to it. I think it has more to do with nostalgia rather than production, quality. The golden age music was well produced, very powerful and well written too but I don’t think they need to be compared with today’s music.

Today’s musicians are very creative. They too have things to say, they too are well written; the people making the comparison probably grew up with those songs and they might not understand today’s music. Not understanding something does not make it lesser.

Considering artists back then, even the greats, did not put out a lot of albums or singles when compared to today’s artists who put out music more often. Why do you think that is?

I think it was very hard to put out albums back then than these days. But artists suffer to put out albums these days as well. There are easier platforms to make and sell your music on but I think artists are still suffering in a sense that studios are not easy playgrounds to play on.

The industry still does not really pay creatives; studios, composers and writers are not paid the right way. So, until that day comes, don’t expect too much creativity because creativity is also run by the freedom of time that you can make music.

If I am not getting paid well, I’ll just do something to pay my rent. Something that is easier. That is why getting paid can make a difference. When I say this, people might automatically say in the 60s they were not paid but they did so many things, no they were hired by the government.

These writers were hired by the Ethiopian National Theatre, Ras theatre, Cinema Ethiopia, and all those bands in mazegaja were hired and they were workers who were paid a monthly salary especially during the time of Haile Selassie I. That’s their actual job. They were workers who went in at 2 o’clock and left at 8. Most of us are self-employed so that also has its own impact on what you’re going to do and what you’re going to deliver to the art because you can abuse that freedom as well.

In general, I don’t agree with the comparison and I don’t think it’s fair. My generation is putting out a lot of good stuff. Think about it, if you call your days the good days and things were so well in the 60s and everything was nice, then why you would expect better things from me then, while you understand I’m living in a worse time.

So, coming to the new album, you said earlier that you were into physics; does that have anything to do with the 3, 6, 9 and the universal numbers?

Yeah, I mean you have to understand the Orthodox Church has a big explanation over this because it has a lot of knowledge about the world and the universe and everything from ancient times, but also those teachings were spread throughout the world in different ways and one of the people who understood this in early times was tesla.

He brought this idea of these three numbers being the key to unlock the universe and to understand the whole thing. If you understand things from the perspective of frequency, vibration and energy, you’d understand the world in a much better perspective.

Instead of saying me, me, you will start to say us; instead of just boosting up your ego and saying, man is everything in this world. You will understand the relationship of man in the world. And then you will protect the world.

What I’m trying to put here is for my generation to see things from a bird’s eye view. Let me put it this way, everything that we use today, phones, computer, internet, technology, all these things that we kill each other for is made by the people who understood this, these higher understandings of the world. Because how can a person make a phone that can do miraculous things without understanding the world holistically. I think the perspective that we have about ourselves and the universe is distorted and that’s why we’re very tribal and biased.

The bottom line is, I think the understanding we have about ourselves and the world should change or should be in check.

So, what I try to do with this 3, 6, and 9 is to show people that there is a higher perspective of looking at yourself, the world, how it goes and how it functions. If you understand that, everything becomes lighter, everything becomes a shape that will be understandable by the next person.

The names are inspired from that. So, when people say, oh, it’s three, it’s six, it’s nine, it’s like you’re engaging with these numbers, raising curiosity amongst listeners to look into these numbers, which will hopefully raise a question in people’s head so that they can have a better understanding of the world.

It’s always much better to look at yourself within the world. What I mean by that is like, yes, you are you, but you are in the world so know the relationship you have with the world, and then you’ll have a healthy thought, instead of saying what did the world give me? You’ll understand and you’ll start to say, what did I give to the world, what are the things that I said this morning? Most of us we’re just living inside our head, we don’t really live.

How has the experience been with Universal Records?

Well, I’m learning a lot from how the world moves, how it works, how everything is intentional; intentional in a sense that the world is moving faster. It was like going from being a small fish in a tank into a small fish in an ocean, it’s so big and sometimes it’s challenging but exciting for the most part.

I’ve seen a lot of people working day and night to make things go the right way. For me, it starts from my management company, Dots, all the way to universal music Africa and the whole team who have worked tirelessly to make things go smoother for me. I am very thankful.

The one thing I’m most thankful for is getting to release 6 at this moment, because according to our deal with the record company, I wasn’t supposed to release it now but we demanded it because I felt my generation needed it. There are songs in the album I really want to put out at this moment because my generation needs it.

They’ve been willing to compromise on things for me and understand that I’m coming from a different side of the world that they never existed in. So, it’s been challenging for them and I can understand but they they’ve been nice to me, I feel like I’m in great hands to join the world.

Other artists like Aster and Gigi have signed to international companies and represented our country. Hopefully, I’ll be able to get to do that as well. I’m following in the footsteps of giants. I hope I deliver something worth a while. Honestly speaking, to join the international world has been a dream come true.

Do you still get to work on crafts that are still true to yourself?

Of course. They do not affect my craft, rather they just help. That’s what people don’t understand. People thought they’ll make me do things their way, if that was the case, I would have never signed anything.

They’re here because they loved what I do. So, why would they touch it? But they will help me delve in deeper. They want me to experiment in our cultural music more and they also allowed me to stay here. I’m still based here; I’m producing my music on our soil. I’m still intact with the people. I’m still a part of the community.

The future is exciting. I have a full control over my artistic freedom. They don’t bend my music into anything, they even provide me with more freedom and guide me through the lines, and present me with better opportunities.

What is the perspective of 6 and what does it mean?

Yeah. So 6 means a perspective of a six-year-old. When we were at that young and impressionable age, our intentions were clear and our ego was not built the way it is now. We were not stiff. We were eager to learn and we had a better understanding of the world.

I think in order to become a better generation, we have to learn how to become young and find our inner child. To tap into my inner child, I went to kids. I went to orphanages and just spent time with the kids, communicating with them, asking them to paint me stuff.

I’ll give them words and learn their perspective. For example, I’ll ask them for testify. Like, what do you think about the word testify? And they’ll just paint me stuff. Through the genius of my graphic designers Fanuel Leul and Tsegaw Tesfa, we were able to incorporate those paintings on the album art.

I also wanted for those six-year-olds to see themselves being represented, so that they can have better guts, that our traumas cannot hurt them, for them to have a thicker skin to say no to us, if we are ever to push our biases onto them.

I want my generation to be purposeful in not passing that trauma to the young. I am hopeful this would empower them both. We are alien to kids because our biases have molded us somehow. They don’t quite vibe with us that much. When they hear their voice in my album, they’re automatically engaged through the things that I say and to the songs that I put in there. It will eventually become theirs. So, when they grow up people will not manipulate them, the way we have been manipulated.

What can we expect going forward?

“9” is coming out in December and somewhere between then and now, we’re planning on having a festival celebrating all my music with fans.

It’s going to be a series of beautiful engaging events, and till then I hope everyone enjoys 6 and gets the message.

The TPLF is the enemy of Ethiopia and the people of Tigray point blank. The government says that it would make peace with the group but as Ethiopians we can’t forgive that party even if the government fulfils its diplomatic responsibilities. I did not say the people of Tigray, rather just TPLF.

The role of Ethiopia’s government should be identified; the election board should not be giving out certificates for parties that work with terrorists. If they get a certificate, then the TPLF would need one as well.

The country is on the precipice of prosperity now. Our current state could be depicted as a nine month pregnant women ready to give birth on any day. It is always darkest before dawn, Ethiopia’s people come together even stronger when there problems pile up.

We should be careful with parties that try and create the gap between ethnicities.

How can the government enforce a justice transition? What should be included?

Justice transition means the world did not get civilized through a revolution, but rather through reforms. Reform means averting the negative impacts and carrying on already started projects.

Justice transition implies those that refuse forgiveness and acceptance from the recently started national dialogue and the people that are being accused. Each one of the perpetrators will not be brought before court but instead will have to reconcile their differences in the regions customs, which is according to justice transition.

This is the outcome of the reforms. A new education law is now being drafted, in addition to changes to the education policy. These and other innovations in teacher education are greatly appreciated.

The Association applauds the improvements and supports the next developments.

In the last three years, for example, the panda bag arrived in Djibouti and stayed for more than a month, and we were required to pay tax. We would not pay that money if the Ethiopian government was facilitating faster. We occasionally lose bags or items in a warehouse where we keep the bags.

It’s pointless for me to go over what happened. It is all well known that we simply need to take our time and evaluate everything before coming up with a way to mediate it.

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ከ ፖለቲካ አምድ

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Ethiopian Reporter Political News

Officials at the Ministry of Agriculture are worried about the global fertilizer scarcity as the nation becomes unable to endure the increase in the price of the agriculture input owing to the conflict between the Ukraine and Russia.

The global fertilizer crunch continued as the country sees a growth in demand for fertilizer due to expansion of irrigation farms and new agriculture projects that prompt farmers to increasingly shift to artificial fertilizer with subsidized price.

“Demand is growing substantially as Meher farms expand and irrigation activities surges across the country,” said Umar Hussein, the Minister of Agriculture, in an event held at Skylight Hotel to honor stakeholders who have been involved in the timely delivery and distribution of fertilizer.

Last year, the price of fertilizer more than doubled in the international market, a situation that have bulged Ethiopia’s annual budget for the commodity from USD 600 million to USD 1.2 billion.

“The last year has been very challenging due to forex shortage and security concerns that have affected distribution,” Umar said.

This week, the World Bank warned that there would a further increase in price of fertilizer, with the rapid increase in gas prices turning into an increase in the cost of the commodity.

“The challenge is meeting the immediate demand for fertilizers to support next season’s crops. Current projections suggest that Africa’s unmet demand could reach four million metric tons this year, with West Africa facing the most acute challenges this growing season,” said World Bank Group President, David Malpass, during the opening of the 77th session of the UN General Assembly (UNGA 77) on Tuesday, 13 September 2022.

Last year, the Ministry had to float a tender more than twice as suppliers failed to fulfill contracts due to the global fertilizer crisis, which was first caused by the coronavirus pandemic and then worsened by the war between Russia and Ukraine, which supply over 50 percent of inputs needed to produce urea.

“Taking a lesson from last year, we are in contact with potential suppliers to avoid delays. Invitations have been already made,” said Sophia Kassa (PhD), State Minister for Investment and Input Sector at the ministry, told The Reporter.

During the last fiscal year, almost 13 million quintals of fertilizer was supplied by Fertiglobe, one of the largest producers of the nitrogen fertilizer in the Middle East, and Morroco OCP, a renowned supplier in Ethiopia, where it is currently building a fertilizer plant in partnership with the government.

The government expended a total of 64.5 billion birr for the procurement, shipment and distribution of fertilizer last year. It accounts for 11.4 percent of the budget during the same period.

The government had to allocate another 15 billion birr in subsidy as farmers become unable to withstand the surge in price of fertilize quadrupled in the local market.

Three directives on broadcast media go operational effective this month

The Ethiopian Media Authority enacts three directives to regulate the public, community, and commercial broadcast media. They are part of the eight directives the Authority has been issuing since the ratification of the media proclamation in April 2021.

To be applicable beginning this month, the directives list the rights and responsibilities, and how licenses are granted for the public, community, and commercial broadcasting media. The directives rule on how television and radio media should conduct their reports during national occasions like elections.

Lists of administrative measures by the Authority as well as legal actions have also been stated. Beginning from warnings to suspension of licenses and legal actions, several measures would follow should the media houses engage in illegal activities.

One of the actions, as it was the practice before, was to prohibit the dissemination of a program considered to be a danger to national security before going public on any of the broadcast media.

On the issue of impounding and injunctions, article 45 of the proclamation states that prosecutors might request a court order to stop publication of the programs. In the event of an emergency, the broadcast of the programs will be called off with the order of the Ministry of Justice. This should be notified to the court of law within 48 hours.

The Authority also prepared and approved several other directives to govern the media landscape in Ethiopia. These include directives for religious broadcasting services, online media, and print media.

Following the approval of the religion broadcasting service directive, which forced the registration of religious-based media, several of them have been registered.

Among the 46 media outlets that started the process and are working with the Authority to finalize registration, 23 have received their licenses, according to Dessie Kefale, communications director at the Authority.

“There was a deadline on which all had begun the registration process. Some of them were already operational for a long time, of course,” he said.

Before the ratification of the proclamation, as Dessie explained, there had not been adequate legal frameworks for all kinds of media houses.

All the directives and regulations before last year’s proclamation were based on the Mass Media and Access to Information issued in 2008, and Broadcasting Service Proclamations issued a year before that.

“There are several other laws under discussion and preparation, which includes a directive on hate speech and misinformation,” Dessie told The Reporter.

It is the “largest pandemic fraud” in the US

Ethiopians are among 47 people who have been charged in connection with a fraud scheme in the US involving Feeding Our Future. The alleged fraud is said to be the largest pandemic fraud in the country, involving USD 250 million.

The defendants are charged across six separate indictments with charges of conspiracy, wire fraud, money laundering, and bribery. The defendants are suspected of creating dozens of shell companies to enroll in the program as Federal Child Nutrition Program sites, while allegedly creating shell companies to receive and launder the proceeds of their fraudulent scheme.

The defendants submitted false invoices purporting to document the purchase of food to be served to children at the sites and submitted fake attendance rosters purporting to list the names and ages of the children receiving meals at the sites each day, according to the US Department of Justice.

“These indictments, alleging the largest pandemic relief fraud scheme charged to date, underscore the Department of Justice’s sustained commitment to combating pandemic fraud and holding accountable those who perpetrate it,” said Attorney General Merrick B. Garland. “In partnership with agencies across the government, the Justice Department will continue to bring to justice those who have exploited the pandemic for personal gain and stolen from American taxpayers.”

Feeding Our Future’s founder and executive director, Aimee Bock, was among those indicted. She is charged with conspiracy to commit wire fraud, conspiracy to commit federal program bribery, and federal program bribery. She oversaw the USD 240 million fraud scheme carried out by sites under Feeding Our Future’s sponsorship, according to the US Department of Attorney.

An Ethiopian born Abdikerm Abdelahi Eidleh, 39, of Burnsville, Minnesota, is charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit federal program bribery, and money laundering. Eidleh was an employee of Feeding Our Future who solicited and allegedly received bribes and kickbacks from individuals and sites under the sponsorship of Feeding Our Future. Eidleh also created his own alleged fraudulent sites.

Ethiopian born-US nationals, Bekam Addissu, 39, Hadith Yusuf, 34, and Hanna Marekegn, 40, are each charged with one count of conspiracy to commit wire fraud. Another six siblings who are originally from Ethiopia have also been charged with wire fraud, federal programs bribery, conspiracy to commit money laundering, and money laundering.

Another Ethiopian-born US national, Liban Yasin Alishire, 42, the president and owner of Community Enhancement Services Inc., a company located in the JigJiga Business Center in Minneapolis, is charged with receiving more than USD 1.6 million in fraudulent Federal Child Nutrition Program funds. Ahmed Yasin and Khedir Jigre have also been charged with conspiracy to commit wire fraud and money laundering in the same center. These three defendants have been accused of buying properties, including beach property, in Kenya.

Another defendant with links to Kenya, Salim Ahmed Said, 33, of Plymouth, Minnesota, is charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit federal program bribery, federal program bribery, conspiracy to commit money laundering, and money laundering. Said was the owner and operator of Safari Restaurant, a site that received more than USD 16 million in fraudulent Federal Child Nutrition Program funds, the US Department of Justice said.

“An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law,” the department said.

A startling revelation regarding the war in northern Ethiopia was announced last week by the International Commission of Human Rights Experts on Ethiopia, an independent organization tasked by the UN Human Rights Council with conducting a thorough and impartial investigation in Ethiopia. The stern warning emerged after the organization released a study that stated there are reasonable grounds to believe that parties to the conflict had violated and/or abused human rights since combat began in November 2020.

It was a report that not only angered federal government officials but also countries and experts that had already questioned the mission and real interests of the recently formed committee of experts.

“The report of the commission is prepared in defiance of the UN best practice guidelines such as professional independence, impartiality, and standard of proof,” said Tadesse Kassa (PhD), secretariat of the inter-ministerial taskforce that was formed by Prime Minister Abiy Ahmed, slamming the UN Commission of Human Rights Experts report of human rights violations in the northern Ethiopia war.

At a press conference held on September 21, 2022, he referred to the Commission’s initial report, which was created with only two full-time human rights investigators and remote interviews, as nothing more than mediocre. At the press conference, the Ministry of Justice unveiled the task force’s first phase report, which was prepared by 158 experts deployed in the conflict-affected Amhara and Afar regions.

In its first phase investigation report, which covers violations committed by the Tigray People’s Liberation Front (TPLF), the inter-ministerial taskforce (IMTF), formed to implement the recommendations of a joint investigation by the Ethiopian Human Rights Commission (EHRC) and the UN Office of the High Commissioner for Human Rights (OHCHR), presented its findings.

The Task Force found reasonable grounds to believe the commission’s findings that there were 2212 rapes, 2831 extrajudicial executions of civilians, and other violations during the war. According to its 46-page report, the team came to this conclusion after analyzing the testimonies of 10,000 witnesses and analyzing thousands of videos and material evidence.

For Tadesse, who has been monitoring the task force’s research and report-writing process, the UN Commission of Human Rights Experts’ report on Ethiopia is only a “snippet” of the full extent of the damage that has been inflicted throughout all three regions.

“The report’s conclusions are presented on the basis of either no evidence or evidence whose credibility is highly questionable,” the secretariat told the room full of reporters questioning the report in regard to its standard of proof and data collection. Tadesse even went on to call the report “a political statement” that was prepared to “help implement” the agendas of “some forces.”

This week, the commission accused all combatants in the conflict of committing various human rights crimes. In order to reach the conclusion that there are “reasonable grounds” to suspect that the offenses amounted to war crimes and crimes against humanity, the Commission listed incidents that it employed as a basis.

The selected incidents were the shelling of Mekelle and attacks on civilians and civilian objects; killings in Kobo and Chenna; and a drone strike on an Internally Displaced Persons (IDP) camp in Dedebit. Rape and sexual violence, and denial and obstruction of humanitarian access were also selected themes for the investigation.

The commission’s two-month investigation into selected incidents and themes found “reasonable grounds” to believe the Ethiopian National Defense Force (ENDF), Tigray forces, and Eritrean Defense Force (EDF) committed war crimes, according to the report. In this case, the report accused the ENDF of using “starvation of civilians as a method of warfare.”

It further stated that it found “reasonable grounds” to believe extrajudicial killings, rapes, and sexual violence were committed by ENDF members “as part of a widespread attack” directed against “the civilian population of Tigray.”

The accusations were part of a joint investigation by the Ethiopian Human Rights Commission (EHRC) and the UN Office of the High Commissioner for Human Rights (OHCHR) that was adopted by the federal government.

The federal government, on the other hand, blasted the commission’s report, adding that it had opposed its formation from the start. It described the report as “substandard quality” and its allegations as “unsubstantiated.”

“It makes grave accusations against the government and its armed forces without offering proof, just based on telephone conversations and web-based submissions. This is irresponsible,” Zenebe Kebede (Amb.), the Permanent Representative of Ethiopia, told Federico Villegas, Human Rights Council president, at the Interactive Dialogue with the commission on September 22, 2022, in Geneva, Switzerland.

As the commission was not allowed to go to the war-affected areas of northern Ethiopia to investigate by the federal government, all the 185 interviews with victims, survivors, witnesses, and other key interlocutors were conducted remotely, it said. Even the governments of Sudan and Djibouti haven’t granted the Commission access to interview Ethiopian refugees within their borders.

Authorities in Benishangul Gumuz Region are preparing a conflict recovery project that would need a 38.5 billion birr budget to be implemented. It is an initiative that arose as the security situation improving.

The plan is expected to be implemented in five years in three phases, with execution scheduled to begin next month.

The region’s sectoral bureaus will start adapting the plan and mobilizing resources based on their needs. The region is drafting a directive that will guide resource mobilization.

The required budget for the recovery plan is nearly six times the region’s 6.7 billion birr budget for the 2022/23 fiscal year.

“Non-governmental organizations and UN agencies have already expressed their interest in supporting the initiative,” Tarekegn Tasisa, the region’s disaster risk management commissioner, said.

The recovery and rehabilitation project, based on a study prepared by the region’s disaster risk management commission, will be implemented in the region’s 17 districts in the Metekel, Kamashi, and Asosa zones. The plan outlined a list of main activities that would be carried out in six sectors, including disaster risk management, agriculture and natural resources, health protection, and education.

The study for the plan was conducted using the regional government’s root-level apparatus. They have identified the extent of the damage, and the commission compiled it, according to the Tarekegn.

Besides the study carried out by the commission, another study is also being prepared led by Assosa University. The university’s study estimated that the region sustained 79.4 billion birr damage due to the conflicts in the past years.

The conflict has resulted in the loss of 16 million quintals of crop, valued at 44 billion birr, according to the study.

“The university’s study has already been presented to the regional government, but it’s not finalized yet. That’s why we are using what we studied. Ours is already ratified by the recovery steering committee,” the commissioner said.

Officials say the security situation in the region is improving now. The number of civilians killed in the past five months is at its lowest.

The region has been a place of horrific civilian killings and conflicts between government security forces and Gumuz rebels since 2019. While the Metekel and Kamashi zones are the main fighting grounds for the rebels, Metekel zone has seen killings targeted at ethnic Amharas.

Even though the region is rich in gold and coal mining resources, investors are not able to mine the reserves, especially in the Kamashi zone. The region ranked second in the country in terms of gold production, with artisans producing more than 90 percent of the region’s gold.

475,384 residents are displaced from their villages due to the insecurity in the region, of which 77,500 are children under the age of five, and 20,000 are breastfeeding mothers, according to the conflict impact assessment. The conflict is also a reason for the destruction of 43,640 houses.

The region, which has been witnessing conflict and the killing of innocent people in various places, saw 113,000 students are out of school due to instability. The destruction of schools has created a difficult situation for students to return to school. In the conflict-affected areas of the region, 201 schools were completely destroyed and 86 schools suffered partial damage.

The region’s 142 health facilities, including 126 health posts, have also sustained damage due to conflicts.

Benishangul Gumuz, which provides agricultural land to investors who engage in large scale farms, has had its 109 agricultural institutions’ warehouses looted and partially or completely destroyed.

The study showed that 291 farmer training institutes and 140 animal health facilities met the same fate.

The recovery and rehabilitation plan has prioritized the implementation of the return of internally displaced people and the rehabilitation of those people in their former homes in a sustainable manner. It also focuses on rebuilding social and economic institutions and providing the necessary equipment for the institutions.

The project need assessment showed that 38.5 billion birr will be needed to implement the plan in disaster risk management, agriculture and natural resources, health protection, education, water irrigation and energy resource development, women, children, and youth sectors, as well as peace building and security sectors.

“The cost of the recovery budget is so much higher than the region’s capacity. But we are planning to mobilize resources from diaspora communities that are from the region,” Tarekegn stated.

Funds from donors including the federal government and the World Bank recovery project are expected to be part of this project.

The Benishangul Gumuz region is one of the six regions, including Tigray, Amhara, and Afar, where rehabilitation project was launched by the federal government together with the World Bank this year. In May 2022, the bank signed a USD 300 million grant to assist the reconstruction, and the federal government has allocated 20 billion birr in the current fiscal year for reconstruction.

In areas that have security threats, the project will be implemented by a third party. The Ministry of Finance has delegated United Nations Office for Project Services (UNOPS) to implement the reconstruction in the Tigray region.

The Ministers of Health and Education studied the damage in all six regions and prepared a report detailing the cost of the five-year reconstruction project.

The Ministry of Education stated that USD 96.5 million is needed to recover from the damage to schools in the Benishangul Gumuz region, while the Ministry of Health stated that USD 22.35 million is needed to recover from the damage in the health sector of the region.

However, the question of equitable distribution of wealth is being raised in the reconstruction project of the federal government. The Boro Democratic Party, which shared power in the region’s government, blamed the federal government for not paying enough attention to reconstruction.

In a statement issued by the party a month ago, the party urged the federal government to pay attention and allocate resources to the replanting zone in the same way that attention and resources are allocated to the destruction and displacement of citizens in northern Ethiopia.

Yohannes Tesema, the party’s Political Sector head, believes the government is not giving enough attention to the recovery as much as it gives to the Amhara and Afar regions.

He claims that out of the USD 300 million granted by the World Bank, the amount of funds allocated for the Benishangul Gumuz region is small.

It says there is no military solution to this conflict

The US Department of State called on “Eritrea and others to cease fueling” the conflict in Ethiopia and urged Eritrea to withdraw its forces from Ethiopian borders. The department accused Eritrea of increasing tensions throughout the Horn of Africa region.

The US also called on “both the Government of Ethiopia and the Tigray regional authorities to halt immediately their military offensives and pursue a negotiated settlement through peace talks under the auspices of the African Union.”

At a press briefing on September 15, 2022, Ned Price, spokesperson of the US Department of State, stated that Ethiopia should look for a non-military solution to the conflict.

“We are increasingly concerned by the growing military activity in northern Ethiopia. We strongly condemn the resumption of hostilities. There is no military solution to this conflict. These actions are inconsistent with the government of Ethiopia and Tigrayan regional authorities’ stated willingness to go to talks,” Price said.

The US special envoy to the Horn of Africa, Mike Hammer, who is in Ethiopia over the week and canceled his expected press brief on Friday, is also advancing a similar position to secure a peaceful resolution to the third wave of war that resumed in Ethiopia on August 24, 2022.

The special envoy is reportedly making efforts to bring warring parties to the table, while Olusegun Obasanjo, the designated AU official to broker peace in Ethiopia, has been silent since the third wave of war broke out.

Both optimism and worry dominated the just-ended Ethiopian year. A year that began with aspirations for wider peace and stability in the nation ended with the resumption of another deadly conflict. In a war with no apparent end in sight, thousands of people are still dying in the highlands. The economy is still in a difficult situation after recovering a little in the last Ethiopian year, on the top of the stockpiled macroeconomic problems.

It was such a challenging year. In the last year, more than the year before, the effects of the one-year-old conflict was felt. This is especially true in terms of the economy. The cost of living remains high despite recent indications that inflation is slowing down nationwide.

“The government found it difficult to contain inflation and in the third quarter of the past fiscal year started to slow down the pace of depreciation of the national currency. Maybe this contributed to stabilize the inflation rate somewhat but it may also have contributed to foreign exchange shortage in the economy,” Patrick Heinisch, an economist said.

Some conflict-affected areas are experiencing a more than 1000 percent increase in commodity prices as a result of severe supply shortages. It is still a problem in the country’s north, particularly in Agew Zone, Tigray Region, and parts of Afar Region.

“Up until the resumption of the war, I was sending money to my family living in Tigray, paying 30 birr for every 100 birr I transfer,” said Kirubel, whose last name is withheld for security reasons. “For obvious reason, this is not something normal in a country with a sound economic condition.”

Kirbuel’s story is actually the tip of the iceberg. Just two months after the previous Ethiopian year began, Ahmed Shide, the Minister of Finance, was among the first to voice concerns about the status of the economy. In the same broadcasted speech on the state broadcaster in November 2021, his comrade Yinager Dessie, the governor of the National Bank of Ethiopia (NBE), did not conceal the fact that the economy was poised to collapse because of the war.

It didn’t take long for Prime Minister Abiy Ahmed (PhD) to react. While also paving the way for a negotiated settlement with the warring party in the North, the Tigray People’s Liberation Front (TPLF), which the Parliament designated as a terrorist organization, his administration declared a humanitarian truce. Humanitarian organizations had relatively easier access to provide food supplies to people in the war-torn region.

First, some progress was made in the effort to bring about peace. The economy showed signs of improvement, and the IMF, which had previously included Ethiopia on its list of nations with unpredictable and unstable economies, predicted that it would rebound. Soon after the ceasefire in North Ethiopia, the other Bretton Woods organization, the World Bank, similarly predicted Ethiopia’s economy would revive.

Though such encouraging developments helped the government rebuild its ties with the West and western financial institutions, they did little to prevent the country’s fundamental problem—the shortage of foreign currency. From approximately USD two billion to barely USD 290.7 million in loans, development partners and lenders cut their commitments.

The net inflow of external debt was negative USD 551 million, indicating that the amount of creditor loans disbursed was less than the principal amount of debt the government was servicing.

Businesses have also faced a financial crisis due to the forex shortage, a situation that has plagued them for decades, though some found last year to be their most difficult ever.

More than any other businesses, those involved in the water bottling industry felt the pinch. Twenty water bottlers had to shut down because they were no longer able to run their businesses due to a lack of inputs, and they had even reached a point where they were unable to pay their employees’ salaries.

Overall, access to foreign currency remains challenging for businesses. At the end of 2021, foreign exchange reserves stood at USD 1.6 billion, or 1.3 months’ worth of imports of goods and services.

The authorities tightened foreign exchange regulations numerous times over the previous fiscal year in response to the shortage, upping the percentage of foreign exchange companies’ must surrendered to the government (central bank) to 70 percent. Even exporters had to deal with the shortage because the restriction prevented them from using more than 20 percent of the foreign exchange they had earned.

Another major economic burden that persisted in the country last year was the widening budget deficit, made worse by the war in the North, which increased spending for military. The budget deficit widened and is now expected to exceed 300 billion birr this year, which is more than twice what it was in the just-ended fiscal year. These difficulties compelled the government to take desperate decisions, such as freezing loans or introducing new taxes, in an effort to increase revenue and narrow the mounting deficit.

However, not every problem can be solved.

For many workers in industrial parks, the suspension of Ethiopia from the African Growth Opportunity Act (AGOA), a trade benefit granted by the US to developing countries so they may export their goods without paying an import duty, has been a bad news.

Due to significant layoffs brought on by the suspension, more than five factories have left the park, and over 5,000 workers have lost their jobs as a result.

“The year has been tough for all workers in Ethiopia. From the inflationary pressure to the war that has made many jobless, they have been in a pickle. Some had to live in poverty since their salary is not enough to cover expenses,” said Kasahun Follo, president of Confederation of Ethiopian Trade Union (CETU), urging employers to consider the challenges and make adjustments in the coming New Year.

Although the amount of jobs created by industrial parks is relatively low compared to the agricultural sector, the country had planned to industrialize. For Heinisch, these efforts are now being thwarted.

“Worryingly, since 2019 the share of the industrial sector in GDP has actually decreased. The trend is likely to have continued in the past fiscal year,” he said.

Despite the difficulties last year, industries did well.

The export of industrial items reached a record-high USD 500 million in exports during the previous fiscal year. However, this is negligible in light of the development in the coffee industry, which generated USD 1.4 billion in revenue during the previous fiscal year. It is a success that has helped officials to record the nation’s record-high exports revenue, which exceeded the USD four billion mark during the previous fiscal year.

Despite some progresses, however, the overall economic condition seems to be in worst shape, according to economists.

“We have undertaken a study and discovered that the economy is not in a stable condition, which is indicated by the unpredictability of the exchange market, the fiscal policy and the forex market, adding to global-wide problems,” said Tewodros Mekonnen (PhD), an economist and a policy analyst.

Another economist, Mengistu Ketema (Prof.), also believes the economy had not been in a good condition last year.

“Inflation was growing, above 30 percent throughout the year. External debt are maturing, thus forcing the country to allocate more budget for debt servicing. The drought in the south also worsened the already tense situation. And when you add all these to the global economic challenges, including the war in Ukraine, it indicates the economy is between a rock and a hard place,” Mengistu said.

For Heinisch, who believes Ethiopia did not experience a “post-COVID” recovery in 2021/2022 as many other countries did, the outlook is more benign, assuming that the war that has broken out again will come to an end quickly and the country can focus on its economic reforms again. “Debt restructuring could free up resources that the country needs for reconstruction but also new investment projects. So there is still reason for hope,” Heinisch concluded.

Both optimism and worry dominated the just-ended Ethiopian year. A year that began with aspirations for wider peace and stability in the nation ended with the resumption of another deadly conflict. In a war with no apparent end in sight, thousands of people are still dying in the highlands. The economy is still in a difficult situation after recovering a little in the last Ethiopian year, on the top of the stockpiled macroeconomic problems.

It was such a challenging year. In the last year, more than the year before, the effects of the one-year-old conflict was felt. This is especially true in terms of the economy. The cost of living remains high despite recent indications that inflation is slowing down nationwide.

“The government found it difficult to contain inflation and in the third quarter of the past fiscal year started to slow down the pace of depreciation of the national currency. Maybe this contributed to stabilize the inflation rate somewhat but it may also have contributed to foreign exchange shortage in the economy,” Patrick Heinisch, an economist said.

Some conflict-affected areas are experiencing a more than 1000 percent increase in commodity prices as a result of severe supply shortages. It is still a problem in the country’s north, particularly in Agew Zone, Tigray Region, and parts of Afar Region.

“Up until the resumption of the war, I was sending money to my family living in Tigray, paying 30 birr for every 100 birr I transfer,” said Kirubel, whose last name is withheld for security reasons. “For obvious reason, this is not something normal in a country with a sound economic condition.”

Kirbuel’s story is actually the tip of the iceberg. Just two months after the previous Ethiopian year began, Ahmed Shide, the Minister of Finance, was among the first to voice concerns about the status of the economy. In the same broadcasted speech on the state broadcaster in November 2021, his comrade Yinager Dessie, the governor of the National Bank of Ethiopia (NBE), did not conceal the fact that the economy was poised to collapse because of the war.

It didn’t take long for Prime Minister Abiy Ahmed (PhD) to react. While also paving the way for a negotiated settlement with the warring party in the North, the Tigray People’s Liberation Front (TPLF), which the Parliament designated as a terrorist organization, his administration declared a humanitarian truce. Humanitarian organizations had relatively easier access to provide food supplies to people in the war-torn region.

First, some progress was made in the effort to bring about peace. The economy showed signs of improvement, and the IMF, which had previously included Ethiopia on its list of nations with unpredictable and unstable economies, predicted that it would rebound. Soon after the ceasefire in North Ethiopia, the other Bretton Woods organization, the World Bank, similarly predicted Ethiopia’s economy would revive.

Though such encouraging developments helped the government rebuild its ties with the West and western financial institutions, they did little to prevent the country’s fundamental problem—the shortage of foreign currency. From approximately USD two billion to barely USD 290.7 million in loans, development partners and lenders cut their commitments.

The net inflow of external debt was negative USD 551 million, indicating that the amount of creditor loans disbursed was less than the principal amount of debt the government was servicing.

Businesses have also faced a financial crisis due to the forex shortage, a situation that has plagued them for decades, though some found last year to be their most difficult ever.

More than any other businesses, those involved in the water bottling industry felt the pinch. Twenty water bottlers had to shut down because they were no longer able to run their businesses due to a lack of inputs, and they had even reached a point where they were unable to pay their employees’ salaries.

Overall, access to foreign currency remains challenging for businesses. At the end of 2021, foreign exchange reserves stood at USD 1.6 billion, or 1.3 months’ worth of imports of goods and services.

The authorities tightened foreign exchange regulations numerous times over the previous fiscal year in response to the shortage, upping the percentage of foreign exchange companies’ must surrendered to the government (central bank) to 70 percent. Even exporters had to deal with the shortage because the restriction prevented them from using more than 20 percent of the foreign exchange they had earned.

Another major economic burden that persisted in the country last year was the widening budget deficit, made worse by the war in the North, which increased spending for military. The budget deficit widened and is now expected to exceed 300 billion birr this year, which is more than twice what it was in the just-ended fiscal year. These difficulties compelled the government to take desperate decisions, such as freezing loans or introducing new taxes, in an effort to increase revenue and narrow the mounting deficit.

However, not every problem can be solved.

For many workers in industrial parks, the suspension of Ethiopia from the African Growth Opportunity Act (AGOA), a trade benefit granted by the US to developing countries so they may export their goods without paying an import duty, has been a bad news.

Due to significant layoffs brought on by the suspension, more than five factories have left the park, and over 5,000 workers have lost their jobs as a result.

“The year has been tough for all workers in Ethiopia. From the inflationary pressure to the war that has made many jobless, they have been in a pickle. Some had to live in poverty since their salary is not enough to cover expenses,” said Kasahun Follo, president of Confederation of Ethiopian Trade Union (CETU), urging employers to consider the challenges and make adjustments in the coming New Year.

Although the amount of jobs created by industrial parks is relatively low compared to the agricultural sector, the country had planned to industrialize. For Heinisch, these efforts are now being thwarted.

“Worryingly, since 2019 the share of the industrial sector in GDP has actually decreased. The trend is likely to have continued in the past fiscal year,” he said.

Despite the difficulties last year, industries did well.

The export of industrial items reached a record-high USD 500 million in exports during the previous fiscal year. However, this is negligible in light of the development in the coffee industry, which generated USD 1.4 billion in revenue during the previous fiscal year. It is a success that has helped officials to record the nation’s record-high exports revenue, which exceeded the USD four billion mark during the previous fiscal year.

Despite some progresses, however, the overall economic condition seems to be in worst shape, according to economists.

“We have undertaken a study and discovered that the economy is not in a stable condition, which is indicated by the unpredictability of the exchange market, the fiscal policy and the forex market, adding to global-wide problems,” said Tewodros Mekonnen (PhD), an economist and a policy analyst.

Another economist, Mengistu Ketema (Prof.), also believes the economy had not been in a good condition last year.

“Inflation was growing, above 30 percent throughout the year. External debt are maturing, thus forcing the country to allocate more budget for debt servicing. The drought in the south also worsened the already tense situation. And when you add all these to the global economic challenges, including the war in Ukraine, it indicates the economy is between a rock and a hard place,” Mengistu said.

For Heinisch, who believes Ethiopia did not experience a “post-COVID” recovery in 2021/2022 as many other countries did, the outlook is more benign, assuming that the war that has broken out again will come to an end quickly and the country can focus on its economic reforms again. “Debt restructuring could free up resources that the country needs for reconstruction but also new investment projects. So there is still reason for hope,” Heinisch concluded.

The envoy is wrapping up two weeks in the Horn region.

“He remained actively engaged with the Government of Ethiopia, with the Tigray regional authorities, with the African Union, and with international partners to seek to advance an important effort to bring peace. He met on September 12 with the AU’s high representative, Obasanjo,” stated Price.

On September 16, 2022, the US embassy in Addis Ababa also stated that Hammer held productive meetings with Ethiopian government officials, civil society representatives, the African Union, and international partners.

Moussa Faki, the AUC chairperson, who extended Obasanjo’s mandate on September 10, 2022 to continue engaging with warring parties in Ethiopia, also met with Hammer on the next day. On the other hand, the UN Security Council, which was set to discuss the situation in Ethiopia, was postponed.

The five months of ceasefire and humanitarian assistance to Tigray were shattered when the third wave of war broke out on August 24, 2022. The ongoing peace initiative under the AU umbrella hit a deadlock, which the special envoy is trying to reactivate.

The Tigray regional government, which has been refuting AU-led peace negotiations prior to the latest war, also issued a statement on September 11, 2022, agreeing to negotiate under the AU umbrella.

Nonetheless, reaching a ceasefire agreement and resuming the peace talks remains farfetched, worsening the humanitarian crisis, as Eritrean forces are reportedly drawn into the war and regionalizing the conflict.

“These actions are worsening the humanitarian situation at a time of pronounced drought and food insecurity,” stated Price.

He called on the government of Ethiopia, Tigrayan authorities, and all parties to allow the unhindered delivery of humanitarian relief.

“Humanitarian assistance should not be used for military purposes—it should be used to save lives. And we urge the parties to cease the fighting and to begin talks under the auspices of the AU as soon as possible. Peace needs to be given a chance. Too many people have died, and too many more are suffering,” he added.

“Our region doesn’t have the capacity to mobilize this amount of budget for the recovery. It definitely needs the federal government’s support more than this,” he asserted.

The commission’s requests to various UN entities operating in Ethiopia to share documents and materials of interest were largely deflected, or responded to after an inordinate delay. Its request to access the internal database of the joint investigation team was also delayed.

“Despite these challenges, the Commission is confident that its findings are supported by information that satisfies the standard of proof for UN investigations,” the report reads.

The commission’s recommendation, which asks the UN Security Council (UNSC) to include the war in northern Ethiopia on its agenda for the 14th time since December 2020, worries the Ethiopian government more than the report’s findings and conclusions do.

In order to stop further violations and abuses of international human rights law and humanitarian laws, it also calls on the council to take action targeted at restoring peace, stability, and security in the area. During a session held this week, officials of the federal government have already expressed their resentment at the recommendation of the commission.

“The Commission’s political pronouncements referring to the UN Security Council are ultra-virulent and betray political motivations that go beyond human rights,” Zenebe said.

It is a sentiment shared by countries that are members of the Human Rights Council.

“The Commission went beyond its mandate and made a statement on things that were not in its remit,” said Konan François, a representative of Côte d’Ivoire on behalf of a group of African States.

Wondemagegn Tadesse (PhD), an international human rights lecturer at Addis Ababa University, believes there are three options in which the UN Human Rights Council can decide to approve the commission’s report and recommendations. The first option is to end the matter within the council itself.

“In this case, there will be nothing more to do than call on the warring parties in the country to implement these recommendations,” Wondemagegn explained.

The second option is to refer the matter to the UN General Assembly. “However, since the assembly gathers over a long period of time, it may not have a big impact on Ethiopia,” he added.

Apart from that, even if it is presented to the General Assembly, its voting system does not have veto power, so there is a high possibility that it will not be approved. A large number of developing countries at the General Assembly will not vote in favor of the resolution as they consider such decisions as interference, according to Wondemagegn. Moreover, experience so far shows that if the country in which the decision is made does not accept the decision, the chances of its implementation are low.

However, if issues are referred to the UNSC, the third option may take a different path than the two options.

“The Security Council is the only institution that has the power to take military action among the UN institutions, but as we always see, the proposal to the Council is overturned by the veto power, so it does not make a difference,” Wendmagegn asserted.

In the past two years, the council has not passed any decisions on Ethiopia. The war in northern Ethiopia and the Great Ethiopian Renaissance Dam have been on the agenda tabled before its members for discussion. When a resolution was proposed, China and Russia, who have veto power, supported Ethiopia.

For Wondemagegn, even if the Security Council passes a resolution, it is difficult to implement it. If the Council decides to send troops to stop human rights abuses, there may not be many countries to contribute troops to a country as large as Ethiopia.

“Even if countries contribute soldiers and send them to Ethiopia, they will have to fight a war with Ethiopia because the Ethiopian government will not accept the decision. No one wants this,” he said.

Another human rights expert, who asked not to be named, explained that even if the UN Human Rights Council does not pass any decision as a result of this report, countries that want to take unilateral action can use it as a cause for their measures.

“Those like the US and the EU may use the report to suspend loans and impose sanctions,” the expert said, adding, “but this would only hurt the people affected by the war more.”

The Ethiopian Human Rights Commission also agrees with this idea.

“Decisions should be made to reward the people affected by the war and bring reconciliation, not where parties with differences of opinion are dragged into a corner,” said the Deputy Chief Commissioner for Human Rights, Rakeb Melesel, while underscoring that EHRC is ready to share its database if the Commission is willing to undertake another investigation.

The Ethiopian government is exerting pressure to block any attempts by the Commission to extend its mandate. “The Council should reject the report and oppose any attempt to extend the mandate of this Commission beyond December 2022,” the government emphasized.

Farmers reject the much-anticipated Bt cotton.

Cotton growers in Ethiopia resort to unauthorized GMO cotton illegally smuggled from Sudan. Bt-RR cotton seed is currently being cultivated in Afar, Metema, Benishangul Gumuz and Gambella regions after being smuggled via Metema, Humera and other border areas between Sudan and Ethiopia.

Once the first generation of open-pollinated (OT) is acquired, it can be sown for between three and five years, after which the seed cannot be recycled. Ethiopian cotton farmers are currently buying the smuggled cotton seeds and multiplying them locally at 10,000 birr to 13,000 birr per quintal.

Bt-RR originated in Brazil, and was largely cultivated in Sudan. Most other GM cotton seeds are non-OT, which means they cannot be used after the first year. As a result, the farmer has to buy the seed every year.

The cotton farmers The Reporter talked to underlined that the smuggled cotton seed is preferred mainly because it resists bollworm, which has been devastating the existing local cotton breeds. This is because a one-time chemical spray on the vegetation is also highly effective in eliminating all weeds except the cotton itself.

The productivity of the Bt-RR is between 10 and 14 quintals per hectare, slightly superior to the local varieties. But the Bt-RR is advantageous mainly because it beats the bollworm, and requires less pesticide.

“A number of farmers are now multiplying the Bt-RR seed and selling it to cotton farmers across the country. The farmer liked the seed, instead of the local existing varieties and the GM cotton approved by the government,” said a manager of a large-scale cotton farming company. He cultivated the new seed on 200 hectares in Amhara regional state.

Melkamu Telake, board chair of the Ethiopian Cotton Producers, Ginners, and Exporters Association, says farmers are resorting to smuggled seed as access to other cotton seeds depletes. “The government failed to provide the type of seed preferred by the farmer.”

After the Parliament legislated the GMO proclamation in 2015, the Biosafety and Invasive Alien Species Follow-up and Control directorate at the Environmental Protection Authority (EPA) and EIAR commercialized Bt cotton for the first time in 2019.

However, a number of commercial cotton farmers in Gambella have tried Bt cotton and lost interest after the first year. The first reason was that the authorized Bt cotton could not effectively resist the bollworm.

The other major reason was that the authorized Bt cotton, which is imported from India, is expensive costing USD 28 per kilo. As a result, the EIAR picked Indian-based JK Agri Genetics Ltd. to open a subsidiary company in Ethiopia and multiply the seeds in Ethiopia to avoid the forex problem required to import the seeds annually. However, this plan also bore no fruit, as the Ethiopian farmers rejected the authorized Bt cotton.

“All the cotton farmers in Ethiopia are boycotting the authorized Bt cotton. It did not effectively resist the bollworm. It necessitates the repeated application of insecticides and pesticides. We have to buy the seeds every year at an expensive price. Plus, our farmers lack the technology required to cultivate the authorized Bt cotton with the right agronomical practices. So the farmers are resorting to the smuggled variety, instead,” said Melkamu.

Mesele Mekuria, Cotton Development Director at the Ethiopian Textile Industry Development Center, also said the authorized Bt cotton did not work.

The productivity of existing cotton seeds in Ethiopia, which are Ggedera and DP90, dropped, especially after the varieties were in use for over 30 years and were unable to resist diseases. Currently, rain-based farming of traditional seeds offer anywhere between eight quintals and 28 quintals per hectare.

However, if irrigation is coupled with precise agronomical practice, the local seeds can offer between 45 quintal and 54 quintals per hectare, according to Melkamu.

“Big cotton farmers like Lucy in Afar, and other farmers in Arbaminch have achieved this level of productivity. But there are certain interest groups who are trying to enforce certain Bt cotton on Ethiopia. We need GMO cotton only after we achieve maximum productivity with the existing local varieties,” Melkamu said.

These interest groups, according to him, do not want the local varieties. “Global GMO patent holders are behind these interest groups. Once we start using such GMO varieties, we will be their slaves because the existing local varieties will be ousted in five years and we have to buy their seed every year.”

Yet, other cotton farmers argue that the EIAR has to take samples of the Bt-RR that are smuggled from Sudan, study them, and approve them for Ethiopian farmers.

The meager productivity of local cotton farming has been the Achilles heel for Ethiopia’s aspirations to become the manufacturing hub of Africa, mainly capitalizing on textiles, garments, and apparel.

Damage to health and education infrastructure in six regions of Ethiopia resulting from conflicts need a USD 3.6 billion recovery budget, according to a new Recovery and Rehabilitation Plan document released by the Ministries of Health and Education.

The ministries outlined an intervention plan for the five-year rehabilitation project that will be implemented in three phases. The recovery intervention plan is part of the “Response – Recovery – Resilience” project launched by the Ministry of Finance in March 2022.

The ministries assessed the damage that occurred in Tigray, Afar, Amhara, Benishangul-Gumuz, Oromia, and Konso zones of the Southern Nations Nationalities and People’s (SNNP) regions. The assessment and recovery plan were prepared by the government, with a technical assistance from the World Bank.

Education suffered the most harm. According to the recovery plan, the sector requires USD 2.2 billion to recoup lost learning and rebuild destroyed facilities.

The Ministry of Health’s plan proposed a USD 1.4 billion intervention.

As the assessment shows, the conflict destroyed 2,681 schools completely and another 4,158 schools partially in these regions. 38 Technical and Vocational Education and Training (TVET) institutions and three universities have also sustained varying levels of damage. The number of destroyed TVETs and universities in the Tigray region is not included due to a lack of data.

This destruction of the education sector has affected more than 4.2 million learners and close to 200,000 teachers and education staff, the report reads.

The number of people affected by the damage to the health sector is estimated to be close to 24 million people. The people in conflict-affected area have been “adversely impacted.”

The assessment showed that 3,217 health posts, 709 health centers, and 76 hospitals were partially or completely damaged in the six conflict-affected regions.

Among the six regions that were affected, the Amhara region suffered the most damage to the sectors. Out of the 3,217 health facilities that sustained damage, 69 percent of them are found in the Amhara region. Furthermore, out of 248 ambulances that were damaged or looted, 50 percent were in the region.

The region’s 4,020 schools have also been destroyed, accounting for 58.7 percent of the total damage across all six areas.

However, given the region’s penetration of health institutions, the damage to health facilities in Tigray is substantially greater. 82.9 percent of the region’s hospitals have been damaged. The same fate has befallen Tigray’s 76 percent of health posts and 50 percent of health centers.

In the health sector, out of the overall estimated recovery cost, USD 1.4 billion, the largest share, USD 501.19 million, is for health centers. General and specialized hospitals follow at a cost of USD 342.54 million.

In the education sector, USD 1.36 billion is planned to recover damaged primary and secondary schools in the six regions.

The recovery and reconstruction program will be implemented for five years in three phases, according to the documents prepared by the ministries. The program’s early recovery phase needs will be met within the first six months. Short-term demands range from six to 24 months, whereas medium-term needs range from three to five years.

According to the ministry’s Stakeholder Engagement Plan document, the implementation of the program will be led by a Federal Project Coordination Unit (FPCU) in the Ministry of Finance. Various sectoral ministries and other mandated offices are responsible for the implementation of the program.

In the Tigray region, where the ministries have no access, the recovery project is planned to be implemented by a third party. The Ministry of Finance signed a third-party implementation agreement with the United Nations Office for Project Services (UNOPS) last month.

The World Bank granted USD 300 million in May for the implementation of this project. While the government, which has just begun its fiscal year, has allocated 20 billion birr.

Abiy Ahmed’s (PhD) time as Ethiopia’s prime minister is not without difficulties. He even called himself “a Prime Minister with no time to even undergo a medical checkup” in front of lawmakers. Since taking over after Hailemariam Desalegn’s departure, Abiy has ruled a nation that has been plagued by economic distress, political unrest, and even a civil war that has lasted for more than a year. On top of the never-ending problems he dealt with, with most of the incidents occurring in the northern part of the country, there was another heavy task that challenged his leadership. That is the statehood question brought by ethnic groups living in the south.

A few months after taking office, Abiy was inundated with requests from the leaders of more than a dozen zones and woredas, placing pressure on his government to help them realize their desire for a regional state. Participation in the endeavor to achieve statehood recognition ranged from low-level bureaucrats to zonal leaders and officials in the federal government. Ten zones filed a resolution with the House of Federation (HoF) adopted by their separate councils to hold a referendum on statehood. Abiy was aware right away how urgent it was to fulfill the regions’ desire.

Soon after taking office, Abiy traveled to almost all of the South Region’s ethnically divided zones. It was an attempt to win political support as he rushed to replace the Ethiopian Peoples’ Revolutionary Democratic Front (EPRDF) at the time and establish the ruling Prosperity Party. But his administration’s stance on their desire for statehood was the main topic that dominated the debates at the zones. He promised to respond to their request, which by all legal criteria is legitimate.

However, it was easier said than done to keep the pledge. Sidama was the first regional state to be established following a referendum, with 98 percent of voters supporting the establishment of a new regional state. But civilians paid a price for the government’s efforts to push through Sidama’s desire for statehood, as enraged protesters set fire to the homes of many Hawassa inhabitants and forcibly evicted many others.

In particular, ethnic Amharas were targeted in all incidents involving statehood questions across the South Region. The Attorney General recently released a report that the homes of ethnic Amharas were burned to ashes, which led to the arrest of dozens of people on suspicion of being involved in the violence.

It appears the government understood the consequences of ignoring statehood questions were brought by Ethiopians to the south. Abiy formed a team of experts and high-level government officials two years ago to launch a study on the issue after realizing the consequences of disregarding statehood requests.

The team sent out three recommendations. The first option is to maintain the South Nation, Nationalities and People’s Regional State in its present configuration while making changes to the region’s appropriate number of political seats. The second suggestion was to establish the Sidama region while keeping other ethnic groups as members of the SNNPR. The third involved splitting the region into five, clustering the ethnic groups together.

The third alternative seems to be what the federal administration chose after the first two became unworkable due to rising animosity among ethnic group elites in South Ethiopia.

“I think it’s a step in the right direction, but caution should be exercised to avoid making the same mistake as SNNPR, which is now being dismantled due to growing resentment over resource sharing, political participation, and infrastructure development,” said Keyredin Tezera, assistant professor of Social Anthropology who participated in the study carried out at the request of the federal government.

Following Sidama’s victory for independence from the SNNPR, Kaffa, Sheka, Bench Sheko, Dawuro, and West Omo Zones, as well as the Konta Special District, joined to form the South West Region through a referendum. The local council members of five special Woredas – Amaro, Ale, Basketo, Burji, and Derashe – as well as the Konso, Gedeo, Gamo, Gofa, South Omo, and Wolayta zones voted last week to restructure their administrative units into a newly established regional state.

In a similar fashion, members of the Hadiya, Halaba, Kembata Tmbaro, Silte, and Yem Special Woreda local councils have begun the process of creating a new regional state. However, activists and political organizations active in the zones contested the action.

The Gurghe people, with whom the federal government wants to construct a cluster along with Hadiya, Silte, Kembata, Silte, and Yem, are among those who have objected to the concept of forming regions in clusters. The Guraghe zone has a population of approximately six million people and a land area of approximately 5932 sq.km. Its council was one of the zones that submitted a request to hold a vote on becoming a separate region.

Social activist, Misbah Kedir, is one of the ethnic Guraghes who have contested the federal government’s proposal to partition SNNPR into five cluster areas. He thinks it is wrong for the central government to “forcefully” incorporate the Guraghe Zone into the cluster.

“In addition to Guraghes, other zones that had voted to create a cluster region had also supported the motion after receiving an order from the federal government,” said Misbah.

Wolayita’s opposition wants to be heard too.

“First and foremost, the council, whether in Wolayita or other zones, does not have the power to accept such a resolution on behalf of the people because their term period ended almost seven years ago. Second, this is something that the cadres, not the people, want,” said Amanuel Mogiso, leader of the opposition Wolayita National Movement, which is active in Wolayita Zone.

Amanuel exhorts the federal government to pay attention to what the people want, comparing the situation to sitting on a ticking time bomb. “The Wolayita people have peacefully expressed a desire for their own territory. They need to be heard,” he added.

The politician urges the federal government to avoid meddling and let ethnic communities in SNNPR, including Wolayita, exercise their constitutional rights. “To reject their right to have their own regional state is unlawful,” Amanuel continued.

Jember Abdo, a legal expert, agrees.

“The state is turning into an enabler of violence. In the case of Guraghe, this is what I saw. The people exercised their right to form a region but the federal government’s response was to militarize their hometown,” Jember said urging the federal government to uphold the constitution.

There are economic reasons driving the pursuit of statehood.

“In order to obtain a permit from SNNPR officials, farmers and businessmen must travel hundreds of kilometers from distant areas in the Guraghe zone to Hawassa. And after the cluster region is established, they might be required to follow suit in order to obtain a permit from Hossana, which will likely serve as the cluster region’s capital city,” Misbah said.

Amanuel is worried too.

“The political structure is to blame for the underdevelopment of zones. When you have a significant budget and tax in a region, it is not the same,” Amanuel concluded.

Regardless of the final outcome of the campaign to achieve statehood for Ethiopians in the South, there are still many unknowns about the future of the region, which will depend on the government’s decision on how to manage the grievances of the ethnic groups it intends to organize into a cluster region.

Sergey Lavrov, Russia’s Foreign Minister, affirmed that his country is in favor of giving Africa a permanent seat in the UN Security Council. The Foreign Minister also concurred with Ethiopian officials that the Security Council should undergo reform in a bid to take into account the current state of the world.

Lavrov arrived in Addis Ababa on July 26, 2022 for a two-day trip, where he met President Sahlework Zewde; Demeke Mekonen, deputy prime minister and foreign minister, and other high officials. Lavrov also traveled to Egypt, Congo, and Uganda, before wrapping up his Africa trip by conferring with the diplomatic community at the AU headquarters.

“Ethiopia and Russia share similar stances on issues on the global and regional agenda. These approaches rely on adherence to international law, particularly the tenets of the UN charter and the respect for the sovereign rights of states,” said Lavrov.

During the 35^th ordinary session of the AU summit in February 2022, PM Abiy Ahmed (PhD) exceptionally raised the urgent topic of reforming the UN and securing a permanent seat for Africa in the UNSC.

As a result, the AU passed a resolution that requests “full representation of Africa in the United Nations Security Council, including not less than two permanent seats in the United Nations Security Council with all the prerogatives and privileges of permanent membership, including the right of veto.

The AU also proceeded to request the Committee of Ten Heads of State and Government to continue to intensify its engagement at the highest level with other interested and regional groups and key stakeholders, including the five permanent members of the UN Security Council, with a view to building on progress made in advancing, canvassing and promoting the Common African Position.

The AU’s quest for reform of the UN began in 2005 when African states approved the Ezulwini consensus and Sirte Declaration on the Reform of United Nations Security Council.

In 2010, President Goodluck Jonathan of Nigeria, told the UN General Assembly, “The exclusion of Africa from the permanent member category of the Security Council can no longer be justified. We urge the UN to quicken the pace of its reforms. Not only to better reflect the current global realities but also to ensure that it enjoys genuine legitimacy.”

Africa does not have a proportional representation in the global body.However, the consideration has become critical, as Africa is frequently impacted by decisions over which it has no say.

In particular, both Ethiopia and Russia have been haunted by the UNSC particularly since last year. In the past year, the UNSC discussed sanctioning Ethiopia in relation to human rights violations in the Tigray war. However, the considerations were vetoed by Russia and China. Ethiopia also paid back by refraining from voting, when the UNSC introduced emergency voting in March 2022 to condemn Russia’s invasion of Ukraine.

Demeke appreciated Russia’s “unwavering support during difficult times of need, particularly in the recent struggle to safeguard Ethiopia’s sovereignty.’

The major purpose of Lavrov’s trip to Africa, amidst a propaganda war with the west, is also to secure Africa’s support in similar UN voting scenarios in the future.

Gaining a permanent seat on the UN Security Council will position Africa as a balancing force between the power struggles of the east and west, as well as the rapidly changing global geopolitics. However, reforming the western-dominated organization might not be easy, according to scholars. But once the UN begins processing the AU’s request, Russia and China can play a decisive role in making Africa earn its place in the UN structure.

Over 60,000 foreigners have registered so far

Ethiopia’s Ministry of Foreign Affairs urged foreigners with expired visas and resident permits to get registered in 125 selected areas of registration established for this purpose.

Speaking at a press conference on Thursday, Ministry Spokesperson Meles Alem (Ambassador) has urged all foreign nationals living in Ethiopia without proper documents to be registered immediately before authorities start to take legal action as per the international law Ethiopia has signed.

Foreigners without any visa or residence permit, as well as refugees or asylum seekers requesting status and residing in Addis Ababa and its vicinities with or without an urban refugee permit, are also requested to register as of July 25, 2022.

According to Meles, within the last five days of the official announcement for registration, over 60,000 people have registered from countries including Canada, America, Eritrea, Congo, Italy, Syria, China, Turkey, Ghana, Burundi, Liberia, India, Bangladesh, South Sudan, and other countries.

The first phase of registration sites is installed in Addis Ababa and some Oromia administrative zones, and the second round of registration will be opened soon in regional states and the Dire Dawa City administration, the spokesperson told the reporter.

Registration is conducted under the auspices of the Immigration and Citizenship Service, through the Vital Events Registration Offices of all Woredas and the Immigration and Citizenship Service, as per its mandate given by a proclamation to register and administer legal permits for foreign nationals living in Ethiopia.

“We have started this to make sure that immigration work is proceeding as per the legal procedures,” said Meles (Ambassador), adding that there is no further intention of expelling or any other form of stunt.

The spokesperson has further called on foreigners to take advantage of this chance before officials start to take legal measures against those who failed to register as per the rule. However, the formal registration process will not be applied to the diplomatic community.

Over 180,000 foreigners are expected to be registered in Addis Ababa, Meles added.

In a similar presser, the spokesperson announced the cancellation of 162 million US dollars of rolling debt by the Russian government, which Ethiopia has borrowed since the Soviet Union period. According to Meles, Russia has changed the modality from debt to a development grant for purposes of modernizing the Melka Wakana Hydroelectric Power Station and upgrading Balcha Hospital’s technical capabilities.

Over 60,000 foreigners have registered so far

Ethiopia’s Ministry of Foreign Affairs urged foreigners with expired visas and resident permits to get registered in 125 selected areas of registration established for this purpose.

Speaking at a press conference on Thursday, Ministry Spokesperson Meles Alem (Ambassador) has urged all foreign nationals living in Ethiopia without proper documents to be registered immediately before authorities start to take legal action as per the international law Ethiopia has signed.

Foreigners without any visa or residence permit, as well as refugees or asylum seekers requesting status and residing in Addis Ababa and its vicinities with or without an urban refugee permit, are also requested to register as of July 25, 2022.

According to Meles, within the last five days of the official announcement for registration, over 60,000 people have registered from countries including Canada, America, Eritrea, Congo, Italy, Syria, China, Turkey, Ghana, Burundi, Liberia, India, Bangladesh, South Sudan, and other countries.

The first phase of registration sites is installed in Addis Ababa and some Oromia administrative zones, and the second round of registration will be opened soon in regional states and the Dire Dawa City administration, the spokesperson told the reporter.

Registration is conducted under the auspices of the Immigration and Citizenship Service, through the Vital Events Registration Offices of all Woredas and the Immigration and Citizenship Service, as per its mandate given by a proclamation to register and administer legal permits for foreign nationals living in Ethiopia.

“We have started this to make sure that immigration work is proceeding as per the legal procedures,” said Meles (Ambassador), adding that there is no further intention of expelling or any other form of stunt.

The spokesperson has further called on foreigners to take advantage of this chance before officials start to take legal measures against those who failed to register as per the rule. However, the formal registration process will not be applied to the diplomatic community.

Over 180,000 foreigners are expected to be registered in Addis Ababa, Meles added.

In a similar presser, the spokesperson announced the cancellation of 162 million US dollars of rolling debt by the Russian government, which Ethiopia has borrowed since the Soviet Union period. According to Meles, Russia has changed the modality from debt to a development grant for purposes of modernizing the Melka Wakana Hydroelectric Power Station and upgrading Balcha Hospital’s technical capabilities.

Special Forces of Somali regional state and a coalition of other regional and federal security forces have conducted an all-out counter attack to purge Al-shabab fighters that entered Ethiopia’s borders on Friday. The regional government deployed hundreds of Special Forces to conduct the operation.

“A number of Al-shabab fighters entered the Ethiopian border, after they conducted an attack at a time nobody expected. They first engaged with Somali Special Forces. And heavy casualties occurred on both sides. But we are clearing them out,” said an official in the regional government, who spoke to The Reporter requesting to remain anonymity since the federal government is also involved and information is to be disseminated from the center.

“We have also captured their fighters, and the operation will continue until they are cleared out from the area,” added the official.

The terror group first attacked two border towns in Somalia’s side on July 20, 2022, on the same day Somali regional state officials convened to evaluate its security forces performance.

After the first clash at Yeed and Aato towns in Ethio-Somalia border, the militants reportedly killed twenty Ethiopian forces including three civilians. The group lost 63 of its own.

The al-Qaeda linked group tried to enter Ethiopia through Afder zone in southern part of Somali region.

Apart from a strong presence by Ethiopian forces in the border areas, Ethiopia also deployed close to 4,000 troops in Somalia under the AU Transition Mission in Somalia (ATMIS), a reconfigured version of the former AU Mission in Somalia (AMISOM). Ethiopian troops maintain a stronghold in Baidowa.

However insiders question why Al-shabab is attacking Ethiopia at this moment.

“The attack is intended to divert the attention of Ethiopia. Al-shabab is conducting the attacks in coordination with the TPLF and other insurgents in Ethiopia,” said a security expert who focuses on Al-shabab.

Other insiders also link the rising Al-shabab attacks with the instability in Ethiopia. The restructuring of AMISOM and controversies shadowing the continuity of ATMIS, is also contributing to Al-shabab’s resurrection.

Over the past few months, Al-shabab’s attacks have evolved from suicide bombings to attacking military bases in Somalia, including an AU military base. Experts stress that the group is gaining momentum as Horn of Africa countries are occupied with domestic conflicts and the EU, the largest financer of AMISOM/ATMIS, is backtracking.

A few weeks ago, the newly elected Somalia President, Hassan Sheikh Mohamud said negotiations should be considered with Al-shabab, a rare gesture, which is becoming almost a shadow state.

However, the militant group in a statement said it fights to establish an Islamic state in the Horn.

In a continued conflict in West Wollega Zone, over 1,105 civilians are killed this year, including 28 officials who were shot in one day. The zone has also lost properties worth over three billion birr to extended conflict during the just ended fiscal year.

Reports of the devastating impact of the conflict presented to the Caffee Oromia, council of the Oromia regional state, which held its annual meeting over the week. Gammachis Dabala, administrator of West Wollega zone, told the council that both ethnic Amhara and Oromo are killed in his zone.

The regional government has repeatedly launched operation to eradicate the Oromo Liberation Front (OLF-Shene) group, which designated terrorist by the House of Peoples Representative (HPR) and still maintaining West Oromia as its stronghold. During the last month alone, the group has killed hundreds of civilians, according to Ethiopian Human Rights Commission (EHRC) reports. PM Abiy Ahmed called it “a massacre.”

Most of the zones of Oromia are currently under threats of the insurgent group, according to official reports. Loss of life, property damages, and closure of schools are also tolling across the regional state. In North Shewa alone, some 195 schools remain closed, while over 75,000 students were out of school, according to the report presented during the Caffee meeting.

Taye Dendea, member of the Oromia Prosperity party and state minister of Peace, was at dismay after attending the Caffee meeting. “Last year, only few woredas of Oromia were affected by conflict. Currently, eight zones of Oromia have security threats. We failed the people that elected us just last year. The Oromia Regional Government failed to fulfill its duty to protect the civilians. The damage up on our people is shocking. Externalizing the problem cannot be a solution,” he wrote on Facebook after the meeting was concluded on Friday.

The state minister also harshly criticized the budget allocation of the just started 2022/23 is not enough to fight the insurgents. Nearly 400 million birr is allocated for the regional security budget, which the state minister argues should be more than one billion birr. This accounts for less than one percent of 158.6 billion birr budget approved by the Caffee.

However, the state minister did not mention shortcomings of his ministry why the insurgent group is remaining at large.

Businesses that are registered in Tigray region as a federal taxpayer but are currently located outside the region will be paying their taxes at the Northwest Branch of the Ministry of Revenue in Addis Ababa.

The federal revenue that should have been collected in the region will be collected directly by the ministry. The tax that should have been collected by the regional government will be deposited in a trust bank account.

The ministries of finance and revenue are implementing this temporary procedure because organizations and individuals registered as taxpayers in Tigray are having a difficulty to continue their business activities in other parts of the country, according to Abaynesh Abate, the ministry’s tax declaration director.

Despite their desire to continue working in their current location, the taxpayers were unable to renew their business licenses, vehicles or construction equipment.

Abaynesh said that they could not obtain loans, bid on contracts or receive other government services. “Some of them even claimed that the house they rented for their business was in trouble since their business license had not been renewed.”

More than 100 complaints from Tigray’s taxpayers have been lodged to the ministry, and the number continues to grow. The majority are taxpayers who must pay taxes to the regional government.

Abaynesh says among the complainants, ten are Tigray registered firms that are managed by Commercial Nominees and pay federal taxes.

She explained that after the ministry informed the Ministry of Finance about the complaint in April, it allowed taxpayers to get a temporary tax clearance through a temporary procedure or register as taxpayers elsewhere.

In a letter written by the Ministry of Finance to the Ministry of Revenue last month, it acknowledged the regional government’s authority to collect the tax revenue in Tigray region.

The minister cited Article 96 of the Constitution to explain saying, “Since the income collected from individual businessmen and regional public enterprises is a regional income, it is clear that it is the regional government that can levy and collect tax.”

On the other hand, the letter explains that the tax collected from private organizations located in the region is the joint income of the federal and state governments, levied and collected by the federal government. But the income collected from federal public enterprises located in the region is the income of the federal government.

Nevertheless, since both taxpayers registered in Tigray are facing difficulties to conduct their activities due to the “emerging security problem,” State Minister, Eyob Tekalegn, in a letter stated that it is necessary to establish a temporary system.

The Ministry of Revenue, which has designated the North West branch in Addis Ababa’s Lideta neighborhood, will ensure that these taxpayers receive their tax clearance.

Abaynesh added that a request has been made to the Ministry of Finance to open a trust bank account where regional taxpayer revenue will be put.

“It will be held in a trust for later transfer to the region,” she explained.

According to Abaynesh, the ministry would only collect the taxes submitted by taxpayers because there is no means to check how much the region’s taxpayers owe.

“We don’t have any information to show how much they should be paying at that point. When the situation in the region stabilizes, it will be thoroughly examined” Abaynesh elaborated.

If taxpayers want to shift their workplace to their current address after receiving their tax clearance, registrations will be completed at the preferred address.

Under typical circumstances, changing a company’s address requires amending the company’s establishment document and submitting meeting minutes. Providing permission to change address is the authority of the regional government. All these requirements are not necessary expected to be meet in the temporary procedure.

However, even though both federal and state taxpayers registered in the state will be issued a tax clearance certificate from the Ministry of Revenue, they cannot sell their property. According to the Ministry of Finance’s letter, it is impossible to verify whether they have tax debt or not in the current situation.

Berhane Mewa is not only the former president of the Ethiopian and Addis Ababa Chamber of Commerce and Sectoral Associations, but is also a lifetime patriot in Ethiopia’s private sector struggles against state domination in the economy. Before he was forced into exile eighteen years ago by the EPRDF regime, he took up the struggle to create an independent chamber system and a real private sector in Ethiopia.

An industrial chemist by profession, Berhane came back to Addis to process a pharmaceutical investment license, to the tune of USD 22 million. He already has a plastic and rubber factory, which he established before his exile to the US.

Despite positive signs in the politics arena, Berhane argues the chambers system is still far from defending the private sector’s interests and contributing to the economy. Ashenafi Endale was granted audience. Excerpts:

The Reporter: What was at the core of your struggle for the Ethiopian private sector?

Birhane Mewa: I was forced to leave Ethiopia eighteen years ago. The government at the time was not happy with struggle in the Chamber, to create a strong private sector. I had no political interests. But after I left Ethiopia, I became a member of Kestedemena and Coalition for Unity and Democracy (Kinijit) political parties in North America. I was the secretary in Kinijit’s international leadership wing.

After Kinijit’s leadership were released from prison, I went back to normal life and started working as a business consultant, and then as a project manager. Of course I traveled to Ethiopia in between to attend my wife’s funeral. But now, I came to Ethiopia to process an investment license.

We are in the process of establishing a pharmaceutical factory in Ethiopia, in cooperation with Ethiopians engaged in the pharmacy business in the US. In general, we are here following PM Abiy Ahmed’s (PhD) call to the diaspora.

What is the kind of Chamber you want to see in Ethiopia?

The Chamber was first established as ‘the Addis Ababa Traders Association,’ during the Emperor’s era. Then it was re-established as Ethiopian Traders Council. It was free and active in advising the government, until Derg completely changed that trend. Derg made memberships mandatory and all businesses had to pay a chamber membership fees after they get their licenses.

Derg also shrunk the number of board members representing the private sector in the council, from eleven to one. At that time, nine of the eleven board members were general managers of state corporations; with only Wubshet Werkalemahu was representing the private sector.

After EPRDF took power, the general managers of state corporations left the chamber. At the time, I was president of the Ethiopian Private Manufacturing Association. So I became vice president of the Chamber to close the vacuum. And when Kebour Gena left, I became president of the chamber, through competition.

The fundamental objective of the Chamber is to advise the government before it introduces polices that affect the private sector and the economy. The second is to provide services for the private sector including trainings, information and arbitration. We were successful on both. Both the Addis and Ethiopian Chambers won various international awards, including the ‘best chamber in Africa’ award.

Nonetheless, the EPRDF was working hard to create divisions amongst, Addis Ababa, regional and sectoral chambers and associations. I worked hard to cut out such divisions and create a stronger chamber. We also managed to get back the chamber’s assets taken by the government. We also managed to access 100,000 sq. m of land for the chamber, on which the Addis-Africa exhibition center is currently being established.

Where is (should be) the exact line between state and private sector roles in the economy?

In principle, the private sector is the backbone of the economy, especially in a free market system. But during the TPLF dominated EPRDF regime; the government tried to replace the private sector by state affiliated endowment companies and state owned enterprises, which are still under party control. They enjoy access to finance, bureaucratic support, information, monopoly and other privileges. This has been stunting the growth of the private sector. I am not sure whether the situation still changed. Party affiliations still control the media, not only businesses and the economy.

Besides those parastatals, there are private businesses parasitic on preferential treatments, provided from the parties. Preferential treatment is still given for businesses, in accessing land, finance, foreign currency, and other privileges. A real private sector, which is self-created and hardworking, is very limited in Ethiopia.

The parties and government affiliated private sectors, still prevail, only changing its face. If you look at past private businesses currently, it is not hard to find a party or state support.

The right private sector should be represented only by the Chamber. It should be free, with no political interests, but defend the interests of the private sector. When we say ‘private sector’, it includes the street vendor and Gulit, to the factory and bank owners. The similarity amongst them is that they have a business license, and a common interest. There are various obstacles that hinder the chamber.

Ethiopia’s future depends on the real private sector. Foreign Direct Investments are also necessary but the domestic private sector is critical in terms of self-sufficiency, sovereignty and retention of repatriation. FDI’s can leave anytime.

Even in the USA, the private sector supports either democrats or republicans. Can a real private sector exist without any affiliation with the ruling party?

If you go to Mercato, everyone works for their own interests. They are not paid by the government but they pay taxes to the government. What the government can do is improve and equalize the playing ground.

Of course the private sector in the US supports parties. The difference is corruption is legal in the US. It is called lobbying and it is not a crime. It is also regulated. But in Ethiopia, parties establish affiliated businesses and keep taking money. The biggest problem appears when the parties themselves engage in the business. This is the biggest problem in Ethiopia. Nobody knows where the money from public enterprises goes to.

Political parties must exit from businesses and the economy. In the US, individuals and businesses giving money to parties, is publicly known, and audited. The tax authority also knows it.

Do you think the existing private sector in Ethiopia can be changed into a real private sector, or should we start over?

A real private sector is not something we create. What the government should do is create conducive environment for a ‘real private sector to emerge.’ It is the demand and supply dynamism that creates a real private sector. There are shoe shiners who have become millionaires. Did the government create them? Of course the government can facilitate support, but without political affiliation.

PM Abiy’s administration rolled out privatization and liberalization initiatives in the past three years. Do you think it is sufficient to re-balance the state dominated economy previously under the EPRDF?

There are positive signs but still some individual businesses are close to the government, instead of organized business communities under the Chamber. I do not think this is good. The government must recognize, capacitate and work with the Chamber. There are improvements regarding regulatory issues and public services. But still there is a chain of corruption in the government system. It is related to power and partisanships, which is a big obstacle that must be reduced. The government has good intentions. There are various issues studied and forwarded by the chamber and sectoral associations. Things will improve if the government reacts on those issues. If it does not start punishing corruption and avoid party affiliation and preferential treatments for selected businesses, the problem will get worse. It is the government that creates a corrupt private sector.

Corruption is also unavoidable when the public servants are paid meager salaries. The government must pay public servants sufficiently. So, corruption is high not because people are bad, or the officials are greedy, but the civil servant takes corruption as supplementary revenue.

The government also drafted a new proclamation to re-establish the Chamber. The draft proposes membership as mandatory, among others. How can a strong chamber be established? Recently, two chamber officials also defected to the US. Why is there always an internal feud inside the chambers structure?

There is a structural problem in the Chamber. It is intentionally created. Making memberships mandatory generates revenue for the chamber. But it hinders the chambers from providing quality service for their members. This was seen during the Derg regime. Immediately after the EPRDF came, it worked hard to weaken all institutions, including the chamber, teachers association, and others. The EPRDF made memberships willingly, to shrink the chamber’s revenue and finally close the chamber due to a lack of fund. But we managed to survive, by improving services and generating revenue from creative works.

Especially, the Addis Ababa Chamber became stronger, at the time, while there were some problems in the Ethiopian Chamber of Commerce. When I was about to leave, there were efforts to change the Chamber’s laws and the government wanted to re-design the Chamber, to fit to the politics.

The Chamber serves wherever there are private businesses, not government structures or political leaderships. But the government shadowed and dominated cities’ chambers, by chambers of regional states. These regional state chambers are under the control of party officials. The Ethiopian chamber also fell under the influence of party members. We tried to avoid those influences and somehow succeeded to maintain a Chamber that represents only the interest of businesses.

The proclamation tried to further divide the chamber across sectors, on top of the regional structure, dissecting the interest of the private sector. Kiosk and garage owners have different interests, but also have common interests. These specific interests should be solved under sectoral associations, and their common interest under the chamber. But what the government did is bundle the sectoral associations and the Chamber together. Businesses with different interests sat on the same table, and failed to agree. So, there is still a structural problem.

I have seen the new draft proclamation too. We are unfortunate the draft did not address the problem still. The chambers and the business community still did not reach a consensus on the draft. The Addis Ababa and Ethiopian chambers are in agreement and sectoral associations have also their won perspectives.

Chambers should work only on general issues that represent the common interests of all businesses and the economy at large, aided by sectoral associations formed separately, representing interests of businesses in specific sectors. Thus, the chamber and sectoral associations should be established separately. I do not know the status of the draft proclamation currently, but if it is ratified, it would take another generation to amend.

So, do you believe the Ethiopian chamber should be the all-encompassing strong umbrella?

Not necessarily. My point is the chamber system should be separate from sectoral associations. Whether at local, cities or a national level, chamber must be strong. But they must align. The issue of sectoral associations is completely different. For instance, leather industries have problems that can be solved both through the chamber, and their association platforms. This is the right way.

For instance, there was the Ethiopian Manufacturing Industries Association. It was challenging the government regarding manufacturer’s interests. Its strong momentum even empowered the chamber. Then the EPRDF practically dismantled it. It even prohibited the association from renting an office. The EPRDF regime never wanted such strong associations and chambers. The reason why the government overlapped chambers and sectoral associations is to deny them on common grounds.

If the draft is ratified, it only maintains the problem. Currently, the government’s system prefers individual businesses, than the organized private sector.

So the draft should be revised and discussed again?

The process of crafting the proclamation has problems from its very inception. The chamber members and business communities have no consensus on the draft. The Ethiopian, Addis Ababa, and regional chambers must sit down and discuss on the issue.

The Ethiopian government is trying to allure investments by the diaspora. If the diaspora invest and save in US banks, or in Ethiopia, which return on investment is attractive? Or do you think the government should design incentive packages for the diaspora?

Businesses in Ethiopia are more profitable than other countries. The reason the US government devised AGOA from the beginning, is because African businesses can be profitable. Even in terms of savings, the return in Ethiopia is higher than Europe or elsewhere. The problem in Ethiopia is not on returns, but convertibility. Repatriation might be difficult. Saving in Ethiopia by itself is profitable, let alone investment. There are so many profitable business sectors in Ethiopia. Many sectors are emerging, and not exploited yet.

The other problem is that the Ethiopian diaspora has lost trust in the government back home. So, the current government must reverse that perception, through transparency, commitment and service efficiency.

Thirdly, the diaspora needs information supply on feasible businesses and projects in Ethiopia. Then the diaspora can form share companies, joint ventures, PLC’s or other investment modalities. If the diaspora know feasible businesses and the laws, then they can invest. Currently, the diaspora is placing their money on the stock market and other businesses abroad. They can divert that money to go back home.

Especially, the profitability in the financial industry in Ethiopia is very lucrative; but the government should facilitate currency convertibility. Plus, most diaspora’s in Europe and the US left Ethiopia three to four decades ago. They are at s retirement age now. So if the health system in Ethiopia is improved, most diaspora’s would prefer to go back to Ethiopia.

The diaspora also wants transparent systems to complain in cases of corruption and bad services. There is corruption in Europe and the US. But it is political corruption not work corruption. Political corruption is trying to twist or influence introduction of policies, proclamations or directives. Work corruption is bribing officials, institutions, and public services. There must be a complaint window for this.

The west has been shifting away from Ethiopia and imposed sanctions. Substantial number of Ethiopians vote, especially in the US. Can Ethiopians and black Africans use their voting power to discard unfavorable officials or parties in the US or influence to reverse such sanctions?

The diplomatic system has a more crucial role in this. To be specific, the US faced unprecedented situation in Ethiopia. A government that refuses foreign pressure emerged in Ethiopia.

The US even used the UNSC to pressurize Ethiopia, meeting twelve times within six months. On top of the strong refusal of the Ethiopian government to surrender, the #nomore movement strengthened the support for Ethiopia, rallying Africans behind Ethiopia. The movement is stronger than election powers. The movement eroded US’s credibility in Africa, and in the world.

Even during calls that Addis Ababa will fall to the hands of insurgents, one million diaspora opted to come back home. I believe Ethiopia will regain its rightful place in the international stage.

Unlike any time before, the diaspora is on the same page now, regarding national issues. Before this, the diaspora’s were highly divided and turned against each other. The division created a negative energy. If the diaspora was united before, the EPRDF could have been long gone. The Diaspora and opposition figures abroad were used to strife, not unity.

Can we say that the US’s pressure is normalizing since the tension with China over the horn escalated?

Their strategy differs. The US wants to ensure its interests through political influence, while China does it through investment and economic empowering. The US’s and China’s struggles will continue, whether Ethiopia is there or not. China, Russia, Turkey, Iran and India, to some degree, are joining the friction now. They have certain interests with or against the US.

The US’s fear is not what China will do in Ethiopia, but the kind of measures Ethiopia takes. For instance, Ethiopia’s normalization with Eritrea and the alliance with Somalia is a threat for the US. When the US told Ethiopia to stop the war, Ethiopia rather turned a deaf ear. Ethiopia filled the renaissance dam, when the US opposed it. These are some of the bold moves against US interests.

These moves have nothing to do with China, but they are decisions emanating from the nature of Ethiopians. So, the confrontation between the US and China continues, while Ethiopia strides to protect and implement its national interests fully.

I do not think Ethiopia will completely shift its diplomatic ties towards China. Imperialism is always imperialism, but it changes its face. The US always wants a government that listens to them. If a government refuses to carry out their interest, they depose that government, including assassinations. In cases such as Libya, Iraq and Syria, the US’s footprints in the countries politics can be seen from afar.

The US put the same type of pressures that worked before, and in Ethiopia’s case, it has failed. But the pressure will continue. Ethiopia has passed a major obstacle. Yet, Ethiopia needs to sharpen its diplomacy more.

At what stage is your investment process currently? What are your future plans?

We are establishing the pharmaceutical factory in Ethiopia, in collaboration with highly professional pharmacists, scientists and business people in the Ethiopian diaspora. Finance, knowledge and vision are required to establish a medicine factory. If you have capital, you can buy knowledge, since it is a commodity.

Our vision is to manufacture medicine and medical equipment’s in Ethiopia and provide for Ethiopians. It is not even about profits. We wanted to improve the medicine supply shortages in Ethiopia.

We have been preparing for the past two years. We came to invest in Ethiopia, amidst the rhetoric that Addis Ababa is about to fall. Our team strongly believes in Ethiopia. Currently, we are processing the investment license.

How much is the investment?

The initial investment will take us between USD 20 million to USD 22 million.

What is your conclusion on the soundness of the Ethiopian economy, especially in post-pandemic and post-conflict endeavors?

My first impression when I came to Ethiopia after almost two decades was that all the negative narratives about Ethiopia and Addis Ababa are wrong. There is still an active economy. Across streets of Addis Ababa, day and night, residents are scrambling to buy from street vendors. This indicates to a huge demand in the economy. This is a living economy.

But it does not mean there are no problems in the economy. There is a forex shortage, industrial inputs shortages, logistics problems and others. Yet, the economy has a big potential, especially if public services are improved, corruption is eliminated and bureaucracy is improved.

Do you think the government should maintain protectionism?

The US and Europe are not afraid of protectionism. Why should Ethiopia be afraid of it? Ethiopia is eager to join the WTO. But Europe is still protecting its agriculture. The US is prohibiting import of wood, aluminum and other items, especially trump did everything to protect local industries. So, Ethiopia must also protect its industries.

After America banned Ethiopia from the AGOA, US companies left the Hawassa industrial park. If it is a local factory, they would not do so.

Before, the US’s private sector had no national interest, instead they go for profits. That is why US industries moved factories to China, in search of a cheap labor. But now, the US government is asking them to come back and create jobs in the US.

The country needs a nationalist private sector. The private sector cannot just seek profits and become a pure capitalist. It must contribute to the social wellbeing and development of the country.

Even FDI’s must be undertaken in a joint venture scheme. If it has a local element, the investment can be sustainable.

How can one balance profit seeking versus national interests? Scholars also say the psychological make-up of Ethiopians is not compatible for capitalism.

Corporate governance, labor unions and social responsibility can balance capitalism. National security should be a concern of the private sector. If there is no security, there is no transport, meaning there is no market. Drought should concern the private sector. These make the private sector become a nationalist by default.

One of the major tasks of the Chamber is to make businesses discharge their social responsibility.

Thus, your conclusion is capitalism can work in Ethiopia.

The old way of capitalism, which is seeking only profits, does not exist anymore. Of course, you are responsible for your shareholders and board members. At the same time, you have to be responsible to the society.

Why you are not investing in the banking sector rather than pharmaceuticals?

The government said it opened the banking sector for the diaspora, but still, there are unsettled problems. It said the diaspora had to invest in foreign currency. This is an obstacle.

But the major reason I joined the pharmaceutical project, is because it is a matter of professionalism. Manufacturing is difficult in Ethiopia. We have a big purpose to bring change in the medical supply shortage in Ethiopia. We will produce capsules and tablets. We will also export, once we address the domestic demand. The company will also establish an R&D wing, which will conduct studies for other firms. Most of the founders are also researchers.

Are you a chemical engineer by profession?

I studied chemistry. I also studied industrial chemistry at Bahir Dar polytechnic. I already have a factory in Ethiopia, which produces plastic and rubber. It is expanding now.

Berhane Mewa is not only the former president of the Ethiopian and Addis Ababa Chamber of Commerce and Sectoral Associations, but is also a lifetime patriot in Ethiopia’s private sector struggles against state domination in the economy. Before he was forced into exile eighteen years ago by the EPRDF regime, he took up the struggle to create an independent chamber system and a real private sector in Ethiopia.

An industrial chemist by profession, Berhane came back to Addis to process a pharmaceutical investment license, to the tune of USD 22 million. He already has a plastic and rubber factory, which he established before his exile to the US.

Despite positive signs in the politics arena, Berhane argues the chambers system is still far from defending the private sector’s interests and contributing to the economy. Ashenafi Endale was granted audience. Excerpts:

The Reporter: What was at the core of your struggle for the Ethiopian private sector?

Birhane Mewa: I was forced to leave Ethiopia eighteen years ago. The government at the time was not happy with struggle in the Chamber, to create a strong private sector. I had no political interests. But after I left Ethiopia, I became a member of Kestedemena and Coalition for Unity and Democracy (Kinijit) political parties in North America. I was the secretary in Kinijit’s international leadership wing.

After Kinijit’s leadership were released from prison, I went back to normal life and started working as a business consultant, and then as a project manager. Of course I traveled to Ethiopia in between to attend my wife’s funeral. But now, I came to Ethiopia to process an investment license.

We are in the process of establishing a pharmaceutical factory in Ethiopia, in cooperation with Ethiopians engaged in the pharmacy business in the US. In general, we are here following PM Abiy Ahmed’s (PhD) call to the diaspora.

What is the kind of Chamber you want to see in Ethiopia?

The Chamber was first established as ‘the Addis Ababa Traders Association,’ during the Emperor’s era. Then it was re-established as Ethiopian Traders Council. It was free and active in advising the government, until Derg completely changed that trend. Derg made memberships mandatory and all businesses had to pay a chamber membership fees after they get their licenses.

Derg also shrunk the number of board members representing the private sector in the council, from eleven to one. At that time, nine of the eleven board members were general managers of state corporations; with only Wubshet Werkalemahu was representing the private sector.

After EPRDF took power, the general managers of state corporations left the chamber. At the time, I was president of the Ethiopian Private Manufacturing Association. So I became vice president of the Chamber to close the vacuum. And when Kebour Gena left, I became president of the chamber, through competition.

The fundamental objective of the Chamber is to advise the government before it introduces polices that affect the private sector and the economy. The second is to provide services for the private sector including trainings, information and arbitration. We were successful on both. Both the Addis and Ethiopian Chambers won various international awards, including the ‘best chamber in Africa’ award.

Nonetheless, the EPRDF was working hard to create divisions amongst, Addis Ababa, regional and sectoral chambers and associations. I worked hard to cut out such divisions and create a stronger chamber. We also managed to get back the chamber’s assets taken by the government. We also managed to access 100,000 sq. m of land for the chamber, on which the Addis-Africa exhibition center is currently being established.

Where is (should be) the exact line between state and private sector roles in the economy?

In principle, the private sector is the backbone of the economy, especially in a free market system. But during the TPLF dominated EPRDF regime; the government tried to replace the private sector by state affiliated endowment companies and state owned enterprises, which are still under party control. They enjoy access to finance, bureaucratic support, information, monopoly and other privileges. This has been stunting the growth of the private sector. I am not sure whether the situation still changed. Party affiliations still control the media, not only businesses and the economy.

Besides those parastatals, there are private businesses parasitic on preferential treatments, provided from the parties. Preferential treatment is still given for businesses, in accessing land, finance, foreign currency, and other privileges. A real private sector, which is self-created and hardworking, is very limited in Ethiopia.

The parties and government affiliated private sectors, still prevail, only changing its face. If you look at past private businesses currently, it is not hard to find a party or state support.

The right private sector should be represented only by the Chamber. It should be free, with no political interests, but defend the interests of the private sector. When we say ‘private sector’, it includes the street vendor and Gulit, to the factory and bank owners. The similarity amongst them is that they have a business license, and a common interest. There are various obstacles that hinder the chamber.

Ethiopia’s future depends on the real private sector. Foreign Direct Investments are also necessary but the domestic private sector is critical in terms of self-sufficiency, sovereignty and retention of repatriation. FDI’s can leave anytime.

Even in the USA, the private sector supports either democrats or republicans. Can a real private sector exist without any affiliation with the ruling party?

If you go to Mercato, everyone works for their own interests. They are not paid by the government but they pay taxes to the government. What the government can do is improve and equalize the playing ground.

Of course the private sector in the US supports parties. The difference is corruption is legal in the US. It is called lobbying and it is not a crime. It is also regulated. But in Ethiopia, parties establish affiliated businesses and keep taking money. The biggest problem appears when the parties themselves engage in the business. This is the biggest problem in Ethiopia. Nobody knows where the money from public enterprises goes to.

Political parties must exit from businesses and the economy. In the US, individuals and businesses giving money to parties, is publicly known, and audited. The tax authority also knows it.

Do you think the existing private sector in Ethiopia can be changed into a real private sector, or should we start over?

A real private sector is not something we create. What the government should do is create conducive environment for a ‘real private sector to emerge.’ It is the demand and supply dynamism that creates a real private sector. There are shoe shiners who have become millionaires. Did the government create them? Of course the government can facilitate support, but without political affiliation.

PM Abiy’s administration rolled out privatization and liberalization initiatives in the past three years. Do you think it is sufficient to re-balance the state dominated economy previously under the EPRDF?

There are positive signs but still some individual businesses are close to the government, instead of organized business communities under the Chamber. I do not think this is good. The government must recognize, capacitate and work with the Chamber. There are improvements regarding regulatory issues and public services. But still there is a chain of corruption in the government system. It is related to power and partisanships, which is a big obstacle that must be reduced. The government has good intentions. There are various issues studied and forwarded by the chamber and sectoral associations. Things will improve if the government reacts on those issues. If it does not start punishing corruption and avoid party affiliation and preferential treatments for selected businesses, the problem will get worse. It is the government that creates a corrupt private sector.

Corruption is also unavoidable when the public servants are paid meager salaries. The government must pay public servants sufficiently. So, corruption is high not because people are bad, or the officials are greedy, but the civil servant takes corruption as supplementary revenue.

The government also drafted a new proclamation to re-establish the Chamber. The draft proposes membership as mandatory, among others. How can a strong chamber be established? Recently, two chamber officials also defected to the US. Why is there always an internal feud inside the chambers structure?

There is a structural problem in the Chamber. It is intentionally created. Making memberships mandatory generates revenue for the chamber. But it hinders the chambers from providing quality service for their members. This was seen during the Derg regime. Immediately after the EPRDF came, it worked hard to weaken all institutions, including the chamber, teachers association, and others. The EPRDF made memberships willingly, to shrink the chamber’s revenue and finally close the chamber due to a lack of fund. But we managed to survive, by improving services and generating revenue from creative works.

Especially, the Addis Ababa Chamber became stronger, at the time, while there were some problems in the Ethiopian Chamber of Commerce. When I was about to leave, there were efforts to change the Chamber’s laws and the government wanted to re-design the Chamber, to fit to the politics.

The Chamber serves wherever there are private businesses, not government structures or political leaderships. But the government shadowed and dominated cities’ chambers, by chambers of regional states. These regional state chambers are under the control of party officials. The Ethiopian chamber also fell under the influence of party members. We tried to avoid those influences and somehow succeeded to maintain a Chamber that represents only the interest of businesses.

The proclamation tried to further divide the chamber across sectors, on top of the regional structure, dissecting the interest of the private sector. Kiosk and garage owners have different interests, but also have common interests. These specific interests should be solved under sectoral associations, and their common interest under the chamber. But what the government did is bundle the sectoral associations and the Chamber together. Businesses with different interests sat on the same table, and failed to agree. So, there is still a structural problem.

I have seen the new draft proclamation too. We are unfortunate the draft did not address the problem still. The chambers and the business community still did not reach a consensus on the draft. The Addis Ababa and Ethiopian chambers are in agreement and sectoral associations have also their won perspectives.

Chambers should work only on general issues that represent the common interests of all businesses and the economy at large, aided by sectoral associations formed separately, representing interests of businesses in specific sectors. Thus, the chamber and sectoral associations should be established separately. I do not know the status of the draft proclamation currently, but if it is ratified, it would take another generation to amend.

So, do you believe the Ethiopian chamber should be the all-encompassing strong umbrella?

Not necessarily. My point is the chamber system should be separate from sectoral associations. Whether at local, cities or a national level, chamber must be strong. But they must align. The issue of sectoral associations is completely different. For instance, leather industries have problems that can be solved both through the chamber, and their association platforms. This is the right way.

For instance, there was the Ethiopian Manufacturing Industries Association. It was challenging the government regarding manufacturer’s interests. Its strong momentum even empowered the chamber. Then the EPRDF practically dismantled it. It even prohibited the association from renting an office. The EPRDF regime never wanted such strong associations and chambers. The reason why the government overlapped chambers and sectoral associations is to deny them on common grounds.

If the draft is ratified, it only maintains the problem. Currently, the government’s system prefers individual businesses, than the organized private sector.

So the draft should be revised and discussed again?

The process of crafting the proclamation has problems from its very inception. The chamber members and business communities have no consensus on the draft. The Ethiopian, Addis Ababa, and regional chambers must sit down and discuss on the issue.

The Ethiopian government is trying to allure investments by the diaspora. If the diaspora invest and save in US banks, or in Ethiopia, which return on investment is attractive? Or do you think the government should design incentive packages for the diaspora?

Businesses in Ethiopia are more profitable than other countries. The reason the US government devised AGOA from the beginning, is because African businesses can be profitable. Even in terms of savings, the return in Ethiopia is higher than Europe or elsewhere. The problem in Ethiopia is not on returns, but convertibility. Repatriation might be difficult. Saving in Ethiopia by itself is profitable, let alone investment. There are so many profitable business sectors in Ethiopia. Many sectors are emerging, and not exploited yet.

The other problem is that the Ethiopian diaspora has lost trust in the government back home. So, the current government must reverse that perception, through transparency, commitment and service efficiency.

Thirdly, the diaspora needs information supply on feasible businesses and projects in Ethiopia. Then the diaspora can form share companies, joint ventures, PLC’s or other investment modalities. If the diaspora know feasible businesses and the laws, then they can invest. Currently, the diaspora is placing their money on the stock market and other businesses abroad. They can divert that money to go back home.

Especially, the profitability in the financial industry in Ethiopia is very lucrative; but the government should facilitate currency convertibility. Plus, most diaspora’s in Europe and the US left Ethiopia three to four decades ago. They are at s retirement age now. So if the health system in Ethiopia is improved, most diaspora’s would prefer to go back to Ethiopia.

The diaspora also wants transparent systems to complain in cases of corruption and bad services. There is corruption in Europe and the US. But it is political corruption not work corruption. Political corruption is trying to twist or influence introduction of policies, proclamations or directives. Work corruption is bribing officials, institutions, and public services. There must be a complaint window for this.

The west has been shifting away from Ethiopia and imposed sanctions. Substantial number of Ethiopians vote, especially in the US. Can Ethiopians and black Africans use their voting power to discard unfavorable officials or parties in the US or influence to reverse such sanctions?

The diplomatic system has a more crucial role in this. To be specific, the US faced unprecedented situation in Ethiopia. A government that refuses foreign pressure emerged in Ethiopia.

The US even used the UNSC to pressurize Ethiopia, meeting twelve times within six months. On top of the strong refusal of the Ethiopian government to surrender, the #nomore movement strengthened the support for Ethiopia, rallying Africans behind Ethiopia. The movement is stronger than election powers. The movement eroded US’s credibility in Africa, and in the world.

Even during calls that Addis Ababa will fall to the hands of insurgents, one million diaspora opted to come back home. I believe Ethiopia will regain its rightful place in the international stage.

Unlike any time before, the diaspora is on the same page now, regarding national issues. Before this, the diaspora’s were highly divided and turned against each other. The division created a negative energy. If the diaspora was united before, the EPRDF could have been long gone. The Diaspora and opposition figures abroad were used to strife, not unity.

Can we say that the US’s pressure is normalizing since the tension with China over the horn escalated?

Their strategy differs. The US wants to ensure its interests through political influence, while China does it through investment and economic empowering. The US’s and China’s struggles will continue, whether Ethiopia is there or not. China, Russia, Turkey, Iran and India, to some degree, are joining the friction now. They have certain interests with or against the US.

The US’s fear is not what China will do in Ethiopia, but the kind of measures Ethiopia takes. For instance, Ethiopia’s normalization with Eritrea and the alliance with Somalia is a threat for the US. When the US told Ethiopia to stop the war, Ethiopia rather turned a deaf ear. Ethiopia filled the renaissance dam, when the US opposed it. These are some of the bold moves against US interests.

These moves have nothing to do with China, but they are decisions emanating from the nature of Ethiopians. So, the confrontation between the US and China continues, while Ethiopia strides to protect and implement its national interests fully.

I do not think Ethiopia will completely shift its diplomatic ties towards China. Imperialism is always imperialism, but it changes its face. The US always wants a government that listens to them. If a government refuses to carry out their interest, they depose that government, including assassinations. In cases such as Libya, Iraq and Syria, the US’s footprints in the countries politics can be seen from afar.

The US put the same type of pressures that worked before, and in Ethiopia’s case, it has failed. But the pressure will continue. Ethiopia has passed a major obstacle. Yet, Ethiopia needs to sharpen its diplomacy more.

At what stage is your investment process currently? What are your future plans?

We are establishing the pharmaceutical factory in Ethiopia, in collaboration with highly professional pharmacists, scientists and business people in the Ethiopian diaspora. Finance, knowledge and vision are required to establish a medicine factory. If you have capital, you can buy knowledge, since it is a commodity.

Our vision is to manufacture medicine and medical equipment’s in Ethiopia and provide for Ethiopians. It is not even about profits. We wanted to improve the medicine supply shortages in Ethiopia.

We have been preparing for the past two years. We came to invest in Ethiopia, amidst the rhetoric that Addis Ababa is about to fall. Our team strongly believes in Ethiopia. Currently, we are processing the investment license.

How much is the investment?

The initial investment will take us between USD 20 million to USD 22 million.

What is your conclusion on the soundness of the Ethiopian economy, especially in post-pandemic and post-conflict endeavors?

My first impression when I came to Ethiopia after almost two decades was that all the negative narratives about Ethiopia and Addis Ababa are wrong. There is still an active economy. Across streets of Addis Ababa, day and night, residents are scrambling to buy from street vendors. This indicates to a huge demand in the economy. This is a living economy.

But it does not mean there are no problems in the economy. There is a forex shortage, industrial inputs shortages, logistics problems and others. Yet, the economy has a big potential, especially if public services are improved, corruption is eliminated and bureaucracy is improved.

Do you think the government should maintain protectionism?

The US and Europe are not afraid of protectionism. Why should Ethiopia be afraid of it? Ethiopia is eager to join the WTO. But Europe is still protecting its agriculture. The US is prohibiting import of wood, aluminum and other items, especially trump did everything to protect local industries. So, Ethiopia must also protect its industries.

After America banned Ethiopia from the AGOA, US companies left the Hawassa industrial park. If it is a local factory, they would not do so.

Before, the US’s private sector had no national interest, instead they go for profits. That is why US industries moved factories to China, in search of a cheap labor. But now, the US government is asking them to come back and create jobs in the US.

The country needs a nationalist private sector. The private sector cannot just seek profits and become a pure capitalist. It must contribute to the social wellbeing and development of the country.

Even FDI’s must be undertaken in a joint venture scheme. If it has a local element, the investment can be sustainable.

How can one balance profit seeking versus national interests? Scholars also say the psychological make-up of Ethiopians is not compatible for capitalism.

Corporate governance, labor unions and social responsibility can balance capitalism. National security should be a concern of the private sector. If there is no security, there is no transport, meaning there is no market. Drought should concern the private sector. These make the private sector become a nationalist by default.

One of the major tasks of the Chamber is to make businesses discharge their social responsibility.

Thus, your conclusion is capitalism can work in Ethiopia.

The old way of capitalism, which is seeking only profits, does not exist anymore. Of course, you are responsible for your shareholders and board members. At the same time, you have to be responsible to the society.

Why you are not investing in the banking sector rather than pharmaceuticals?

The government said it opened the banking sector for the diaspora, but still, there are unsettled problems. It said the diaspora had to invest in foreign currency. This is an obstacle.

But the major reason I joined the pharmaceutical project, is because it is a matter of professionalism. Manufacturing is difficult in Ethiopia. We have a big purpose to bring change in the medical supply shortage in Ethiopia. We will produce capsules and tablets. We will also export, once we address the domestic demand. The company will also establish an R&D wing, which will conduct studies for other firms. Most of the founders are also researchers.

Are you a chemical engineer by profession?

I studied chemistry. I also studied industrial chemistry at Bahir Dar polytechnic. I already have a factory in Ethiopia, which produces plastic and rubber. It is expanding now.

Aklilu Wubet is a veteran in the banking industry. He joined Wegagen Bank on March 2020 as the Vice President of Corporate Service, having served in different capacities in many financial companies, including the Commercial Bank of Ethiopia, in the last 25 years. He was also the deputy CEO of Nile Insurance, Bank of Abyssinia and Lion Bank, and also served as a lecturer at Addis Ababa University.

The Reporter’s Samson Berhane sat down with Aklilu to reflect on his journey at Wegagen and the challenges ahead, as the acting president attempts to bring the bank back to its usual top status it has held for the last two decades. Excerpts:

The Reporter: You have joined Wegagen during a challenging time, when it faces decline in revenue from different sources particularly due to the tense political situation in the country. How are things going since you joined the Bank?

Aklilu Wubet: Banking is always challenging, especially in a world where resources are limited. And leadership is critical during a challenging time. Leading a company during its challenging moments is a great task and makes me happy. Especially, if you have strong team, challenge is a good thing. One thing you should also understand is that Wegagen is still a very strong bank, despite the challenges it has faced.

When I decided to join the Bank, I was confident that I would overcome all the challenges by working with a strong management and team the Bank has. The conflict has impacted all commercial banks. Peace is very important for the industry than any segment of the economy since banks deal with liquid resources. The impacts of the war, in particular, were severe on us because we are among the financial institutions with large number of branches in the areas affected by conflict.

When I joined Wegagen, my priority was to help the Bank withstand the impacts of the war. That requires being prudent and to closely work with regulatory bodies, investors and other stakeholders.

In the last 25 years, Wegagen was among the most profitable financial institutions in Ethiopia. Why was it not solid enough to withstand the shock brought on by the war in Northern Ethiopia?

To begin with, the Bank has been effective in withstanding the impacts of the war. Even though the profit is low, and has declined drastically, it is still profitable. It still has a large customer base and a huge amount of assets. Thanks to the strong base, which the bank is built on; it has been successfully coping with the conflict, even though more than a third of its branches are closed.

The profitability of the Bank in the last two decades has helped it build its asset base, enabling it to withstand the impacts of the war. The rules of the central bank and its strong regulations have had its contribution in enabling us to remain strong in such a challenging period.

The strong expense management that we have applied and the strong marketing system implemented by our management team has also contributed to the success of the Bank. If it was not due to such factors, the history of the Bank would have been ruined. But thanks to our efforts, we have defied the prediction made by some, who have forecasted that we will face a loss due to the war. But we are still in a good shape.

We have devised a strategy and are also undergoing restructuring, and increasing the number of vice presidents we have. We are still among the big players in the industry, hiring elite bankers.

According to industry insiders, the bottom line in the banking industry is profits and shareholders’ return. How did you come to the conclusion that the Bank is in a good shape, while its profit dwindled from one billion birr to 193 million birr?

Business is not only about making profits. Business is about being sustainable and staying competitive in an industry. The conflicts, coupled with macroeconomic challenges, have impacted the banking industry last year and banks would have profited much higher than they did, if there was peace.

Wegagen has declared a positive profit, while much of its branches are closed, and at a period when it was not able to collect loans given to businesses operating in war-affected areas. We even held a provision in case of loan defaults. We did not use a penny from the capital invested by shareholders, despite being in the midst of series of challenges. Overall, our objective was to make Wegagen the bank of all Ethiopians, by making it solid. I believe we have been successful in doing that.

There are critics that say Wegagen is a victim of an undiversified ownership structure which exists in the banking industry. Even though Wegagen is not the only financial institution established based on affiliation or along ethnic lines, some say its recent underperformance is an outcome of lack of diversification in terms of shareholders and customer base. Do you agree?

There are those that say banks are established based on affiliation.

Is that not the reality?

I cannot be sure because I have not had a chance to look through the list of shareholders of each commercial bank. In case of Wegagen, the story is different. Wegagen is wrongly misunderstood. If you see its shareholders, no bank is as Ethiopian as Wegagen. Its shareholders are highly diversified. Many big investors from different ethnic backgrounds have a stake in Wegagen. Name any investor and they are a shareholder of our bank. If you see the board, it is highly diversified. The same is also true if you see the management.

Did you bring that change?

No. I was the vice president 13 years ago at Wegagen and it was the same back then.

Okay, but in case of customer diversification, the reality is opposite to what you have said since the Bank’s profit declined drastically, when a third of its branches closed in one region. So is it not obvious that your bank did not work on diversifying its customer base?

Not only in Tigray. We also have many branches in Gambella and Somali than any other private banks. Of course, we have many customers in Tigray but that does not mean our customers in other areas like Addis Ababa are from the same region. We have over 2.5 million customers, way higher than the adult population eligible for banking services in Tigray. That shows how diversified our customer base is.

How about loan disbursement?

It is the same. More than 75 percent our loan portfolio is in Addis Ababa. However, in terms of deposits, the northern part of Ethiopia is known for being a big source. If you go to Mekelle, many commercial banks have many branches there. Some have more than seven or eight branches and the reason is obvious. This is because there is a good saving culture there. But that does not mean we have to work on the business mix because it is important to manage risks.

Then how did your non-performing loans surge because of the conflict if your borrowers are diversified?

We have provided five billion birr in loans to our customers in Tigray. We don’t know whether it can be paid or not because of the conflict. But that is enough to increase our non-performing loans. The whole industry faced similar problems because of the same reason. We held provisions in case of defaults. If it was not due to the higher provision we held, our profit would have been over one billion birr. That would be added to our income in the future, if we recover our loans. This means that we are investing in our future and if things go smoother and peace prevails, we hope things change drastically.

How is the liquidity position of Wegagen Bank? How capitalized is the bank?

We have a strong capital base. It used to be one of the largest in the industry, though some overtook us recently. Understanding its importance, our shareholders decided to raise the Bank’s paid-up capital to six billion birr before the end of the new deadline set by the central bank. We are also thankful that we don’t have a major shareholder because that gives us room for the management to do its job.

Regarding liquidity, when the central bank raised the reserve requirement from five to 10 percent, many feared that our bank would be among those that cannot meet the new threshold. But we are among the few banks that have fulfilled the requirement first. Our liquidity is now over 17 percent. However, that does not mean we are not facing liquidity shortages, because the whole industry is experiencing similar problems due to the sluggish growth of deposits.

Shareholders want to know when the bank would reach pre-war levels in terms of profitability. When do you think that would happen?

There are two assumptions. The first assumption is that the war would stop, peace would prevail and the government puts its energy towards the economy, a scenario which would benefit the banking industry. If peace prevails, our closed branches would be opened. We will be fully operational and our deposits would surge.

The second assumption is that if the conflict continues, we will operate with our existing resources and branches that are active. New banks are joining the industry. So I am sure we can perform better even with our active branches. We have already devised a strategy to mobilize more resources. We are hopeful that we will return to pre-war levels by the next general assembly.

Founded in September 2017, Eshi Express is a pioneer and one of the successful startups in tech-based delivery businesses, in an emerging business frontier in Ethiopia. Tigabu Haile, co-founder and CEO of Eshi Express sat with Ashenafi Endale of The Reporter, to talk about his business journey.

Excerpts:

The Reporter: What was the business pitch behind Eshi?

Tigabu Haile: If you buy an avocado in Yirgalem, it is around five birr per kilogram. But in Addis Ababa, it is around35 birr. So, we believed that Ethiopia needs an efficient logistics system in the supply and logistics service. Even in Addis, we do not see companies that provide end-to-end payment systems, sourcing and delivery services.

Sending packages in Addis is expensive. There are players like DHL, the Post Office and individual motorcycle owners. But Eshi can provide the service up to 50 percent cheaper than the market.

Basically, Eshi is a logistics company. So, how do you manage your fleet? What are the types of services you provide?

We have three types of services. We have Express service, in which we deliver any package in Addis within 90 minutes. The second type is delivery in half a day. If you order in the morning, we deliver in the afternoon. We charge 90 birr anywhere in Addis. The third category is delivery in 24 hours, which costs 70 birr anywhere in Addis.

Our main operation is in Addis. We use vans, pickups, motors and other types of vehicles. Most of the Ethiopian population is in the regions. We believe the logistics problem in the supply chain can be best addressed if we expand to regional states. Currently, we have been in the piloting phase in Adama and Hawassa, since last year. We will reach other regions in the next two years.

Do you own the whole fleet of vehicles?

We deployed the hybrid model. Around ten motorcycles and a van are owned by Eshi. But owning many vehicles is not feasible, so we stopped purchasing vehicles. We launched a technology six months ago, that enables any individual vehicle owner to register to our platform and deliver packages. Our model is called ‘from foot to fleet’. People can deliver on foot. Especially when we have big events, mass publications and other large deliveries many individuals deliver on foot.

How can these individuals or private vehicle owners access your platform? Is the technology similar to a taxi hailing platform?

It is almost similar but slightly different regarding registration system and insurance policies. Huge packages might be damaged in transit by individual vehicle owners. So, we always require courier insurance or insurance for goods in transit, for any private vehicle who works with Eshi.

How many vehicles that are not owned by Eshi are working with Eshi?

Right now we have more than 25 vans, pickups and different vehicles. There are also around fifteen motorcycles.

How many packages does Eshi deliver per day? How do you evaluate the demand?

The demand of the service is huge. There are thousands of delivery demands daily in Addis, while it is in the hundreds of thousands in the regions. The hard task is to make people use Eshi just once. Then they cannot stop using it.

Right now, Eshi delivers close to 115 packages per day. In the next three years, we plan to deliver thousands of packages daily.

How do you see the competition from other players in the market?

There is no really established company we see as competitors. There are legacy players like the DHL, Ethiopian Postal service, and individuals who have motorcycles. It is difficult for many startups to emerge and become competitors in this business.

Online payment, e-tax, e-commerce, delivery and packaging are involved in the business. How are these all done as one business?

Right now online transactions can happen but there are no e-receipts. It is impossible to make online transactions now. Payment is possible for internet and mobile banking. But if you cannot provide e-receipts, you cannot have a complete e-commerce transaction. There are shops that have an online presence. They just show their packages on their sites.

Does Eshi own warehouses or source from other suppliers?

Eshi collects the packages from companies who have warehouses. Receipt is issued traditionally. So, e-commerce is a work in progress. Eshi is the instrument that provides the logistics service. We do not sell any stuff online. Shopping happens between the customer and e-commerce companies. Once the order is placed and shopping done, either the customer or the e-commerce company orders Eshi to deliver the goods.

The number of e-commerce companies has increased since the COVID-19 pandemic. Has online delivery orders increased too?

E-commerce is taking off in Ethiopia and the government is also nearing to ratify the e-transaction law. All Shops will have an online presence. The outsourcing culture in Ethiopia is immature. Most companies want to do the e-commerce and delivery businesses by themselves. One company, especially startups, cannot handle both at the same time. So, after trying both for a year or two, they fail or specialize only in one.

Currently, big global e-commerce players are coming to Ethiopia. Probably they will launch in the next six months. Eshi has entered agreements with these global players, to do the delivery part. E-commerce companies should focus on what they can do best, because they cannot do it all, with limited time, energy and resources. We want to support their job, from the delivery side.

We will have many package drop-off points soon. If the customer is not at home when the delivery arrives, the drivers can place the packages at those points and the client can take it at anytime. This way, we are planning to drop many deliveries within one kilometer radius. This reduces our cost. That is why we charge 50 percent cheaper than the market. One delivery vehicle can cover many shops, pharmacies and supermarkets within an area.

Does Eshi plan to deliver beyond Ethiopia?

Ethiopia will operationalize the Africa Free Trade Agreement (AfCFTA) soon. Intra-Africa trade will boom in the near future. Eshi plans to become a Pan-African Delivery Company within the next three years.

Lack of automated addressing is a major bottleneck to delivery businesses in Addis. How are you solving it?

Absence of digital address system is a major problem for social services, health, banking, census, elections, apart from delivery business. Address is critical. If you do not have an address, you do not exist. Due to the lengthy communication between our delivery dispatches and clients, and usually missing locations, Eshi is losing resources, time and energy. The customer experience is also bad, because it is annoying when delivery personnel call repeatedly to find the address.

Currently, we have a project in the pipeline, named Eshi Locator, with our technology partner. It gives a code to each house’s. The codes are regenerated, when our partner localize using Google technology. We will imbed Google generated codes into our technology. It will take some time. Right now we are using Google maps, to locate the customer. But this has accuracy problems. Many things should improve to solve the location issue. Eshi Locator will be the solution.

What about using GPS locations or networks, if the customer uses a smart phone?

There are four mechanisms to order on Eshi Express. Customers can order on our website, use an application in Play Store, or call on one of our call centers. For Customers who have mass orders, like event organizers, big corporate or ecommerce companies, we have a separate technology platform, which can receive bulk orders and integrate it to our fleet system.

How much is the profit?

We cannot say it is profitable, even after staying four years in the business. At least we have survived, because we could also fail. The global data shows, less than two of ten startups celebrate their fifth year of establishment. Initiating and running a startup is very difficult. Access to capital is one of the biggest problems.

Was Eshi an angel investment?

Initially, Eshi was founded by me and my partner, who has similar business ideas with me. Eshi started with 1.3 million birr. We saved up the capital. We have also advisors. Last year, the Addis Ababa Angel Investors Network invested in Eshi. Delivery business is a capital, technology and skill intensive venture. You need to hire highly talented people. You have to scale-up fast. We hope the profit will come soon, once our delivery capacity grows.

So the angel investors are shareholders now. How much did they inject in the company?

We have an agreement not to disclose the amount. They injected the capital and immediately became shareholders. We gave them equity share worth their capital injection.

So return on investments has not come to fruition yet?

It will take time, especially with startups like us, in which you have to hire huge staff. No question, we are solving one of the top five challenges in Ethiopia. Lack of efficient logistics in the system is a major reason behind the rising inflation in Ethiopia. Food is being wasted because it cannot reach the market. For instance, there is surplus in the southern part of Ethiopia, while it is extremely scarce in the northern part of the country. That is because we do not have a robust logistics system.

Eshi still needs more cash injections to scale-up its capacity. Delivery is not only about packages, it is about the stories behind the packages. For instance the national blood bank of Ethiopia is one of our customers. We deliver blood every day. We collect blood from donation centers to the national blood bank. People are living because of that. NEBE is also among our customers. We did almost all deliveries in the past national election. We are behind the success of many big achievements. We are becoming instrumental in delivery in Ethiopia.

How many institutional customers do you have?

Currently it is close to 35. For instance, we deliver laboratory results for hospitals, on a daily basis. Embassies, hotels, optical shops, are some of them.

What are the incentives provided by the government for delivery companies, such as allowing duty free import of vehicles?

The government is not providing any support or incentive for delivery companies. There were no private courier service providers in Ethiopia, for long. So, only the Post Office and the DHL were known in this business.

For instance, driving motorcycles has been banned under the State of Emergency since some individuals might use motorcycles for crime. But Eshi had hired many staff, branded the motorcycles and there is no way motorcycles registered under delivery companies can be used for crimes. After all, we are delivering critical packages like blood and other essential services.

Secondly, there is an extreme lack of clarity among government institutions, regarding delivery businesses. Especially, the tax authorities are creating major obstacles to delivery companies. The government has no clear policy on delivery businesses, let alone support incentives. The delivery sector could not grow in Ethiopia, because the government has failed to understand it as a newly emerging sector.

There is the Ethiopian Couriers Association, to which Eshi Express is the board president. The association is trying to change the grim fate of the sector. We have submitted a letter to the government, asking the ban on motorcycles of delivery companies to be lifted. But the response from the government is slow.

Motor cycles cannot move after 6PM. So, we are forced to stop taking orders after 4PM. Otherwise, we cannot deliver last minute orders until the next day. This is especially affecting food delivery courier companies, because there orders are largely during dinner times.

What is the government’s response to the associations’ letter?

It has been three weeks since the association submitted the letter. But the government says it is still being considered. The letter was submitted to the Addis Ababa traffic management office. The city transport bureau has also failed to respond.

A new logistics regulation allows up to 49/51 partnership with foreign logistics companies. Is Eshi considering a joint venture with foreign companies?

JV is allowed for logistics companies engaged in sea, air and land transport. Ours is light package and fast delivery logistics. So JV is not allowed for us.

How much does the absence of e-receipts affect your business? How does Eshi cover the costs, if delivery is defaulted?

Online ordering, online payment, and e-receipts are not active at a national level in Ethiopia. Ethiopians consider online shopping, or e-commerce, as a luxury service reserved only for developed countries. That is acutely wrong. Delivery services extremely benefit developing countries. The purpose of e-commerce is to cut expenses and reduce prices. Companies do not have to open shops everywhere. So, it cuts out rental costs. End user customers also usually visit as many shops, to find a reasonably priced good. With e-commerce, you can find any items at your fingertip. You can order a delivery company, saving your time, energy and money.

The progress slows in Ethiopia, because the digitization pace is slow. But the Parliament is currently working on the e-transaction proclamation. The draft document has been under review for a year now. The Ministry of Science and Technology crafted the document and the Council of Ministers has passed it on to the Parliament. It was said that it would be ratified before the current Ethiopian year enters. But I think it is delayed because the government is busy due to the war.

But even after the proclamation is ratified, is there the technology that interfaces with the payment facilitator, end user, delivery companies, shops, tax authority and other regulators?

Eshi has end-to-end technology that enables the ordering and tracking of goods. The technology also enables us to publish the transactions in excel or PDF file formats.

E-commerce companies also have a similar technology. Ethiopia has all the basic ingredients to kick start e-commerce. We have the laws, graduates, and emerging e-commerce companies. The service quality will improve gradually.

Does Eshi use other payment mechanism like mobile money, tele birr and others, apart from e-commerce companies?

So far, our transaction is largely cash-based. But we are integrating with Fintechs like tele birr, CBE birr and others.

The starting price for delivery of a kilogram of package is 20 birr. It increases by12 birr per additional kilometer and three birr per additional kilogram.

How do you evaluate the competition with other emerging delivery companies?

It is difficult to say there is stiff competition. There are delivery companies that participate in bids with us. A lot of institutions like banks float bids for their bulk delivery contracts. There are only close to six active players.

The DHL, the Ethiopian Postal Service and Balderasu are active in Addis, while there are other startups emerging in regional delivery services. The DHL has no interest in the domestic delivery business in Ethiopia, leaving the market in Addis for us. Even in Europe, DHL works with local companies, specializing on the international market rather.

Close to 100,000 packages are delivered in Addis Ababa every day. Eshi, which delivers 115 packages per day, is comparatively better performing, than other players. Yet, the share of delivery companies is completely insignificant, relative to the demand.

All of close to six delivery companies in Ethiopia, including DHL and the Post office, are delivering less than 6,000 packages per day. The market is untapped.

The delivery demand in regional states is much higher than Addis. We have assessed the demand and mapped delivery services in 100 cities in Ethiopia. There is close to 200,000 package delivery demands in these cities.

Who is filling this demand now?

This demand is bridged traditionally. The Postal Service has some market share, but mostly; people send packages via cross-country buses. But this method of delivery has two major problems. First, it has no insurance if the package is damaged and second, the bus owners charge as they wish. Cross-country busses have no standard pricing for delivering packages.

Eshi is 100percent insured. When a client orders Eshi to deliver a package, the customer declares the value of the package. If it is damaged, Eshi refunds 100percent of the value stated.

Do you work with all insurance companies?

The local insurance industry is underdeveloped, thus, local insurance companies usually do not accommodate our insurance packages. So, we cover the insurance fund by ourselves. Eshi has been incurring cost due tothis. But now, we are communicating with insurance companies. All other delivery companies operating in Ethiopia do not have such insurance coverage, except for Eshi.

Is Eshi using its own vehicles for the piloting phase in Adama and Hawassa?

We deploy our own vehicles to deliver high risk packages. But usually, we use private vehicles which have insurance coverage.

Which sectors have high demand for delivery services, is it exporters, households, or wholesalers? And Ethiopia is ranked low on the logistics index. How can delivery companies improve this?

Our business is last mile delivery. We deliver from shops to end users, or consumers. Last mile delivery is the most difficult business in a given economy. One is due to a lack of precise addressing technology. It is also the most expensive logistics system. So the demand could be consumer goods, medication, and invitation or gift cards.

Last mile delivery also creates job opportunities. Millions of youth can deliver goods door to door. So, it is the best logistics sector for job creation. If we could make the delivery price cheaper, it can activate the economy, and affect millions of lives positively. It is a phenomenal sector.

By how much rate is Eshi growing from a startup to a large enterprise?

Our package delivery business size is growing at close to 10percentper month. It is not an impressive growth but we are making good progress.

We plan to grow by 15 percent on a monthly basis. Comparatively, Eshi is growing faster, because most of the delivery companies operating in regional states are highly affected by the conflict in Ethiopia.

How much does Eshi deliver in Adma and Hawassa?

Our delivery in these towns is just a couple of packages per day, for now.

But Blood Bank, the NEBE, Goh Betoch, Nile Insurance, Ramada hotel, hello market, and Ethswitch are some of our major institutional clients across the country. We do cash-up-on-delivery for our customers. We also provide full insurance coverage, which no delivery company does in Ethiopia. We also have warehouse for e-commerce companies.

Does Eshi directly buy goods and deliver?

Usually customers order e-commerce companies to supply the good. Then the e-commerce company orders us to deliver the packages to the customer who has placed the order. Hence,Eshi does not purchase the packages. The package is purchased by the e-commerce company. Since the customer cannot pay online, we collect the payments and give it to the companies, usually on a weekly basis.

If we directly engage in buying and delivering, it will take a huge capital. The e-commerce companies have the packages and the digital presence. I believe e-commerce should be much cheaper. Some e-commerce service providers give up to 15 percent discount, but the business is just taking up in Ethiopia. It is at very early stage.

Eshi does not want to play the role of e-commerce companies. If there are 40 e-commerce companies in Ethiopia, we do not want to become their competitors. Rather, we want to deliver their packages. But if there are packages not found in e-commerce warehouses and if Eshi can find those goods, we can supply it directly to the customer. Under this circumstance, we receive orders of packages worth less than 2,000 birr.

English Version News

Suzuki vehicle prices explode, shaking up the automobile industry

Yoseph Asfaw, a mid-level manager of one of the branches of Bunna Bank, was excited when he learnt he was eligible to take out a two million birr interest-free loan, courtesy of the performance his branch achieved last fiscal year. He did not hesitate to take the opportunity. After a few weeks of deliberation about what to buy with the money, he decided to purchase a vehicle. His choice was the 2022 model of the Suzuki Dzire, the most sought-after automobile in the car market. He was asked to pay 1.5 million birr.

“Are you sure I will recoup the money within a short period of time,” Yoseph asked the car retailer.

“Trust me, give it one month, and the price will surpass two million birr,” the retailer replied.

The trader was right. The price of Dzire 2022 has shot up to 2.2 million now, a development that helped Yoseph net a profit of 700,000 br in just a month. “You cannot get this money by saving or opening a trade store. And not surprising at all, given the volatility of the market,” said the banker, adding, “I don’t want to sell it as this is a treasure whose value appreciates every second, and the most profitable venture without adding value.”

It is not unusual to see the price of vehicles spike in Ethiopia. Cars are believed to be a big treasure, the same way apartments or houses are. A car costing less than USD 2,000 in neighbouring countries, the Toyota Vitz, costs nine times more in Ethiopia. The high tax on old cars, which could reach 500 percent, was used to justify the hike. Though the same is true for old cars now, the story is different in the case of new vehicles, a category given to automobiles produced within three years of imports.

Three years ago, the government introduced a new tax law to encourage the imports of new cars while discouraging the old ones. Such a reform was meant to make new cars cheaper, though it was a target that never materialized. A case in point is the Dzire 2022, an automobile imported through a duty-free scheme and flooded the market, along with other brands of Suzuki, including Espresso and Swift.

Toyota is still the dominant player in the vehicle market, though traders say Suzuki is now commanding the lion’s share, probably as high as 60 percent in the last two years. It is partly because the cost of new Toyota vehicles is higher than in the past, as older ones were less costly. For the same reason, Suzuki is the most preferred brand for importers now because the lower the cost, the lower the amount of foreign exchange importers needs to get.

“We get the forex from the parallel market with a premium, as banks barely cover the cost of the imported cars. Suzuki has become a preferred option for many importers as it is less costly and brings a better return with a higher profit margin than Toyota, which is expensive and requires a tiresome process to get the forex needed to import it from countries like Dubai,” said an importer.

Last year saw a spike in demand for new vehicles, largely due to the huge amount of finance availed by banks to borrowers eligible to take a loan to buy automobile. During the third quarter of the last fiscal year, 330 million birr was imported, twice what was imported in the preceding quarter. It is also 20 percent higher than what was imported during the same period in 2020/21. The increase is the outcome of the growing demand in the market, according to retailers. But that comes with a cost.

“The demand is way higher than the supply. We are receiving orders more than what is available in our stock,” said Ezra Hailemariam, marketing manager of Tamrin, one of the major market players in the car market and known for importing Suzuki brands.

The change in the global market has also contributed to the spike in price, according to Ezra.

“Over 90 percent of Suzuki cars are imported from India, which is not producing much now due to a shortage of inputs because of the tension between China and Taiwan, which is the major supplier of semiconductors for the factory in India,” Ezra added.

According to a senior company official, Maruti Suzuki said “it could not produce 51,000 units in the April-June quarter owing to the ongoing chip shortage situation.”

India’s largest carmaker, which sold 1.4 million vehicles this year, underscored that the semiconductor shortage is a challenge in planning its production activities.

“The electronics component shortages are still limiting our production volumes. In this quarter (Q1), the company could not produce 51,000 vehicles,” said Maruti Suzuki India (MSI) CFO Ajay Seth in an interview with a local media in India.

The scope of the fighting between government forces and militants of the Tigray People’s Liberation Front (TPLF) along the border of the Tigray region has widened with both sides acknowledging that the conflict has spread to more areas in addition to the area where it initially erupted. The fighting between government and TPLF forces resumed on August 24 after a five-month lull. Though combat had been heaviest around the southeastern border of Tigray, TPLF militants have pushed into the neighboring Amhara and Afar regions, sending residents fleeing. Clashes on the ground and air raids over Tigray have poured cold water on the efforts underway since June to find a peaceful solution to the 21-month war that began following an attack on federal army camps based in the region. The warring sides have accused each other of firing first and shattering the months-long relative calm that has been prevailing in the northern part of Ethiopia following the federal government’s announcement in March of a truce to allow humanitarian aid to be delivered to Tigray.

The federal government has also blamed what it calls the west and Ethiopia’s “historical enemies” for using the TPLF as a Trojan horse to advance their evil design on the nation. Ever since the administration of Prime Minister Abiy Ahmed (PhD) commenced a military operation in Tigray in November 2020 in response to attacks on the Northern Command of the Ethiopian National Defence Forces (ENDF) the country has been subjected to unprecedented pressure at the hands of Western governments, the U.N., mainstream media, think-tanks and rights groups. The U.S. particularly has sided with the TPLF, slapping a slew of sanctions on Ethiopia and withdrawing its benefits under the United States’ tariff-free African Growth and Opportunity Act (AGOA) while it gave the TPLF a slap on the wrist. Furthermore, the U.S. and its allies at the U.N. Security Council have tried over a dozen times to formally admonish Ethiopia but failed thanks to the vote of China, Russia and India. Apart from exerting undue diplomatic pressure, the West has also been waging an information warfare against Ethiopia through a disinformation campaign undertaken by the mainstream media, think tanks and so-called rights advocacy organizations. Its end-game, as some analysts plausibly argue, is to engineer a regime change or if that does not work to coerce Prime Minister Abiy’s administration into accepting to the demands of the TPLF.

It’s not only over the Tigray conflict that the West is pressurizing Ethiopia though. The filling and operation of the Grand Ethiopian Renaissance Dam (GERD) has been a bone of contention between Ethiopia, whose highlands supply more than 85 percent of the water that flows into the Nile River, and the lower riparian states of Sudan and Egypt. In 2020 the U.S. tried to force Ethiopia into signing a binding agreement on the filling period. The Ethiopian government declined to sign-off a U.S.-drafted agreement regulating the filling time of the dam, which Egypt insisted should be completed over 12-21 years, saying it has the right to fill the dam at its own pace and would do so in no more than seven years. Although Sudan initially supported the building of the dam, since then it has taken Egypt’s side on the ground that filling the dam without the agreement of downstream countries imperiled its national security. Again the Security Court, at the behest of Egypt and Sudan, convened on several occasions to consider a resolution calling on Ethiopia to cease filling the GERD’s reservoir and pushing for a binding agreement between the three sides on the operation of the dam but failed to adopt it.

The West’s motives driving its pressure campaign on Ethiopia, its long-standing regional ally, are purely self-centered and zero-sum. It is wary of Ethiopia’s pursuit of an independent foreign policy, which may very well frustrate the accomplishment of its strategic goal in the Middle East and Africa. First, Ethiopia’s apparent reluctance to do toe the West’s line has been perceived to make it harder to protect the interests of Egypt—the cornerstone of its Middle East policy. Second, its attempt to thread a needle as animosities between the West and China ramp up is not appreciated by the West, which feels threatened by Beijing’s growing clout on the global stage. Given Ethiopia has been a beacon of black Africans’ struggle for freedom and could inspire continental resistance to neo-colonialism, the West might deem that forcing Ethiopia to forsake China is instrumental in containing the influence of its top geopolitical rival in Africa.

The West better realize that the essentially undemocratic and unipolar global world order that had prevailed over the last several decades following the end of the Cold War is ebbing. As a country that has never been colonized and is home to a fiercely patriotic people, Ethiopia will never cave in to the West’s demands. Needless to say this requires on the part of the federal government to develop and implement a robust diplomatic policy aimed at nullifying the threat posed by its historical enemies through a variety of tried and tested mechanisms. Some of the steps it can take in this regard include forging a compromise with its adversaries where possible and failing that to foil their destabilizing policies and measures. Ethiopia has the capacity to find a resolution to the political crisis engulfing it. Any nation or organization which has its interest at heart should stop meddling in its domestic affairs and instead support it in seeking enduring solutions.

The abrupt eruption of fighting between government forces and militants of the Tigray People’s Liberation Front (TPLF) along the border of the Tigray region this Wednesday has left Ethiopians apprehensive and disheartened. The resumption of active hostilities shatters the months-long relative calm that has been prevailing in the northern part of Ethiopia following the federal government’s announcement in March of a truce to allow humanitarian aid to be delivered to Tigray. Predictably the warring sides have blamed each other of provoking the hostilities. The Ethiopian government has accused the TPLF of striking first, saying it had “destroyed the truce”. In a statement it issued on the same day the Government Communications Service said, “Disregarding the numerous peace options presented by the Ethiopian government, the armed wing of the terror group TPLF, pushing with its recent provocations, today committed an attack” around southern Tigray. The TPLF though has said government forces and their allies had launched a “large scale” offensive towards southern Tigray early Wednesday after a months-long lull in fighting, adding its forces were defending their positions in the southern front.

The lead up to the current round of conflict portended the escalation of the now 21-month civil war. War drums were repeatedly being beaten with all the sides in the conflict issuing statements pointing to the outbreak of an impending war. The TPLF said on several occasions that the peaceful path to resolve the situation was not working and that it was considering “other options.” The government of Ethiopia on its part accused the TPLF of engaging in extensive military mobilization in preparation to restart the war and called on the international community to condemn the terrorist-designated organization and dissuade it from its ill-fated move. The government of neighboring Eritrea, whose troops have been operating in Tigray since the war began, also pointed the finger at TPLF for plotting to launch attacks on the country to reclaim lost territory.

Since November 2020, the bloody war has exacted a heavy humanitarian toll and ravaged the nation’s economy. In addition to the tens of thousands killed and injured, millions more were displaced, psychologically traumatized and left needing emergency food assistance. Social and economic infrastructure has been totally or partially damaged, including schools, universities, health institutions, and other facilities in the Tigray, Amhara and Afar regions. The economy has taken and continues to take a battering. Its growth, which stood at around 10 percent annually before the conflict, has contracted by half; scores of industries have been damaged while some investors have suspended or totally quit operations, resulting in a surge in unemployment; the undoubtedly huge sums of foreign exchange the war has eaten up has contributed to its dearth at levels rarely seen before and to driving inflation higher. Although it’s difficult to quantify the true cost of the war, the destruction is sure to have cost Ethiopia billions of dollars.

The renewed conflict comes as efforts underway since June following the establishment of a government-appointed committee tasked with starting peace talks hit a snag. The government’s announcement in late July that it was ready to hold talks with the TPLF “anytime, anywhere” and the TPLF’s expression of its willingness to ending the war through peaceful means raised the prospects of peace. The apparent readiness of the two parties to engage in peace talks was hailed as an important initiative locally and by the international community. However, both sides have laid down preconditions that they say must be met prior to the commencement of talks—the declaration of a formal cessation of hostilities in the case of the Ethiopian government and the resumption of basic services to Tigray by the TPLF. They also disagree on who should lead negotiations, with the government demanding that the African Union oversee the process but the rebels insisting that outgoing Kenyan President Uhuru Kenyatta should chair it. While we are not apportioning blame here it’s disappointing to say the least that war has broken out again due to the inability of political leaders to do whatever is necessary to prevent it.

War is generally regarded as something that cannot guarantee a win-win solution to political conflicts. This said some contend that war is not necessarily the worst option as long as it fulfills certain considerations that lend it moral acceptance. Critics, however, argue that all war is essentially indefensible regardless of how justifiable the cause behind it may be. They also attempts to justify a particular type of war as being just serve to rationalize violence instead of constraining it. Philosophical differences aside, many agree war is a failure of imagination. Ethiopians have had enough of the internecine conflicts that they have endured for centuries. The blame squarely lies with political leaders and elites bereft of the desire to settle differences through constructive dialogues. In any kind of armed conflicts it is innocent civilians who bear the brunt, not their architects. That’s why the Ethiopian government and the TPLF need to immediately stop fighting and thrash out a durable peace accord at the negotiating table. Let’s not go back to square one!

Hopes of a negotiated political settlement to the war that erupted in northern Ethiopia in November 2020 following the attack on the Northern Command of the Ethiopian National Defence Forces based in the Tigray region by the forces of the Tigray People’s Liberation Front (TPLF) have been high ever since the Ethiopian government established in June a committee tasked with holding peace talks. The government’s announcement in late July that it was ready to hold peace talks with the TPLF “anytime, anywhere” and the TPLF’s expression of its willingness to ending the war through peaceful means, albeit the fulfillment of certain preconditions, led many to believe that peace was finally within Ethiopians’ grasp. The apparent readiness of the two parties to engage in peace talks was hailed as an important initiative in bringing a conflict that has exacted a terrible toll on the country and its people to an end.

Efforts to start the peace talks seem to have hit a snag lately though. First, this week the Main Peace Committee—the committee the Ethiopian government established to explore the possibility of talks with the TPLF—declared while announcing it had drawn a “peace proposal” that the resumption of basic services to the war-stricken region was contingent up on the creation of an enabling environment once a formal ceasefire is concluded. Meanwhile, the TPLF immediately dismissed the committee’s statement as “obfuscation”, blaming the Ethiopian government for openly defying “their oft-repeated promise to take measures aimed at creating conducive environment for peaceful negotiations”. It further accused it of “taking provocative actions against [Tigrayan] forces” and warned that “it will be solely responsible for the eruption of a second round of war that will lead to the total destruction of the country”.

The condition laid down by the Main Peace Committee in a statement it issued, namely that the declaration of a formal cessation of hostilities is a prerequisite to resume the provision to Tigray of, among others, electricity and telephone services belies the Ethiopian government’s recent unambiguous assertion that it was committed to hold negotiations without any precondition and as such represents a step backwards. While the committee has legitimate security concerns regarding the safety of federal government employees that need to be deployed to Tigray in order to restart the basic services, it should also be mindful of the fact that the continued disruption of the services only serves to exacerbate the plight of ordinary Tigrayans, not the leadership of the TPLF. It needs to demonstrate in deeds its avowed commitment to alleviate the suffering of citizens in the conflict-affected parts of the Tigray, Afar, and Amhara regional states. On its part the TPLF must stop beating the drums of war in the realization that throwing around belligerent statements is counterproductive to peace-building endeavors and just prolongs the ordeals of the very people it claims to stand for.

A host of hurdles stand in the way of the proposed talks. TPLF forces still occupy parts of the Amhara and Afar regions they invaded. Similarly, the Amhara region has ruled out negotiating over the fate of areas its forces wrested from Tigray soon after the war erupted, arguing they were forcefully incorporated under the Tigray region in 1991. The continued presence of the Eritrean troops in some of the territories they occupied in Tigray poses a challenge that complicates negotiations. Moreover, disagreements over who leads the mediation process—the African Union (AU) as the Ethiopian government insists or Kenyan President Uhuru Kenyatta, the preferred choice of the TPLF—can torpedo the entire process.

Trying to bring about a complete end to the fighting in northern Ethiopia followed by a political settlement which leads to a lasting peace is an arduous task to say the least. Nevertheless, no price is too high to pay for peace. Now is the time for the warring parties to show a genuine determination and commitment to peace. The deep-seated antagonism between the two sides understandably makes it difficult to strike a peace deal. Engaging in dialogue and making the necessary compromise requires more courage than continuing the war. Embarking on a peace process should not be about total victory for one party and a defeat for the other. It is about achieving an outcome in which all the protagonists and more importantly the people of Ethiopia emerge victorious. For the sake of Ethiopia and its people the Ethiopian government and TPLF must recommit themselves to peace.

The rule of law is a mechanism, process, institution, practice, or norm which strives to ensure that no one is above the law, everyone is treated equally under the law and held accountable to the same laws, there are clear and fair processes for enforcing laws and human rights are guaranteed for all. Ethiopia has the sad distinction of being a nation with a checkered track record when it comes to upholding the rule of law. Among the different metrics by which a country’s overall rule of law performance may be measured, Ethiopia has particularly fared badly in assuring order and security as well as respect for fundamental rights. The act of turning back some people travelling from the Amhara region en route to the capital Addis Ababa constitutes a clear example of the latter.

For over three weeks now security forces in the Oromia region have been preventing citizens travelling by cross-country bus from the North and South Wollo zones of the Amhara region to the capital through Oromia from getting to their destination if they do not carry a residence ID of Addis Ababa. Federal government officials claim operatives deployed by the terrorist Tigray People’s Liberation Front (TPLF) were recently arrested while trying to infiltrate Addis Ababa using residence IDs and administrative seals it had looted when it occupied some parts of the Amhara region, adding the measure is part of a security operation aimed at thwarting the evil designs of the terrorist group. True, a government’s primary responsibility is to protect the safety and security of citizens. Nevertheless, care must be taken to ensure that the manner in which any operation to ensure law and order does not trample basic liberties enshrined in the constitution.

One such right is freedom of movement. Article 32 of the constitution stipulates that any Ethiopian or foreign national lawfully in Ethiopia has, within the national territory, the right to liberty of movement and freedom to choose his residence, as well as the freedom to leave the country at any time he wishes to. The Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights, and the African Charter on Human and Peoples’ Rights — the international instruments Ethiopia has ratified and in conformance with which the fundamental rights and freedoms specified in the constitution must be interpreted — also afford protection to this right. Absent a duly declared state of emergency, there can be no justification for the indefensible prevention of Ethiopian citizens from enjoying their freedom of movement on the ground that they pose a potential security threat.

Aside from flouting the rights to liberty of movement, the action of the Oromia security forces has other troubling ramifications. First, it creates a perception of discrimination and ostracization in the individuals victimized by the travel restriction. Moreover, the fact that they are unable to travel to their intended destination entails damaging economic and social consequences for them. This is liable to sow the seeds of resentment and down the line to political conflict. Second, it encroaches on the federal government’s constitutionally granted power to regulate major roads linking two or more regional states. Such intrusion into the federal government’s exclusive preserve sets a bad precedent for other regions. In short it spells danger for the integrity of the constitutional order and the rule of law.

Freedom of movement is a fundamental right all levels of government must respect. Any perceived security threat its exercise may pose should be handled in a manner that does not result in the violation of the right and subjects innocent citizens to inconvenience. There can be no sugarcoating the fact that the act of preventing certain classes of people from travelling to wherever they want is an unequivocal infringement of not only freedom of movement, but also the right to equality. As such it is incumbent on the federal, Oromia and Amhara regional governments need to hold consultations on ensuring that everyone travelling from the Amhara region via Anwar Soussa has been the Managing Director (MD) of Safaricom Ethiopia since July 2021. He was the Managing Director of Vodacom DRC and the Chairperson of Vodacash (M-PESA), a position he has held since 2017 until joining Safaricom Ethioia. During his tenure, Vodacom DRC made major strides in operational performance, crossing the USD half a million in service revenue mark for the first time in 2020. The Reporter’s Samson Berhane sat down with him to understand his new beginnings in Ethiopia.

The Reporter: First, tell us about your journey in the telecom sector.

Anwar: I have been in the telecom sector since 2006. But I started in the technology sector since 1996 in Montreal, Canada. I joined Safaricom Ethiopia, the project, when I was in Vodacom in Congo. I was a CEO there. My experience perfectly suited for this type of operation.

Safaricom has been preparing for more than a year to launch service. Why did it take so long? What were the problems that you have faced while doing so?

I don’t call it a problem. I call it a challenge. Initially, when we come into the market, the idea was to launch using ethio telecom infrastructure. That agreement took longer than expected to finalize. As a result, we choose to build our own towers. We did not want to wait. To build towers, you have to find land, import materials like steel and find cement as well as hire sub-contractors. That means you need more time than the initial plan. That is the real reason why it took longer than expected to launch service. Now, we signed a deal with ethio telecom and things are gonna move faster.

Tell us about the detail of the deal. I heard you are going to pay in both local currency and USD to lease the infrastructure of ethio telecom.

I am going to keep the deal private because that is between us and ethio telecom. But there is a dollar component. The reason is, as well all know, there is a forex shortage in the market and to prepare a site for us, they are required to import materials from abroad. We recognize that. We agreed to make the component in dollar for them to make the site ready for us.

So, the negotiation is now over?

Ethio telecom has been a very good partner. The CEO, Frehiwot, has been gracious in terms of engagement with us. Everything is proceeding well. The delay was due to operational issues. How many juniors were available? How fast we can get steel? How fast we can upgrade the site? All of these are operational issues.

When you launch service in Dire Dawa, you have used your own infrastructure.

That’s correct. When we launch service, initially, we are using our own infrastructure. But as we move forward, we will be sharing infrastructure of ethio telecom and build our own in the meantime.

Is there any change in equity contribution of shareholders in Safaricom Ethiopia? Some say, there is. Is that true?

No, there is change.

As Safaricom is listed in the stock market, a change is expected when something new happens. Have you seen any change recently after you launched service?

I don’t think it is possible for you to attribute any change to a certain element. The reality is the World’s stock market has been very volatile over the past six months. There is a war and a global recession coming in. Certain things happening are way beyond the control of a certain company or what we do here in the ground.

What should Ethiopians expect from Safaricom? Many hope Safaricom will come up with a better quality of service with a lower fare.

The pricing move from ethio telecom last year was very strong. They brought down massively. I am not sure if it will be possible to bring down price from what is in the market now. However, in terms of quality, my expectation is that the quality overall in the market will improve. And the reason I say that is because we are setting up a new network and ethio telecom, or the competition, will not stay still, I expect they will bring the best game in the table. Quality of service, both in technological level and in customers’ service, will be improved massively. How customers’ complaints are going to be taken care of? I think these are areas where you see a major improvement.

The price that you are charging is almost similar with ethio telecom. Do you think you can be competitive in the market, while charging the same price, as people expect a lower fare from you?

The price for voice is one of the most aggressive in Africa. And I don’t think there is a room to drop voice prices. So do I think we can be competitive? Yes, I do. The most important thing we want to flag is that we don’t want a price war with ethio telecom. If we start a price war, that means they will automatically react. There is no way there is going to sit by and see us dominate the market because our price is cheaper. I think that will a detrimental impact on the market, not only on us. I don’t think you see a change in terms of price.

The infrastructure deal took more time than you anticipated. The global market is not helping too. Did you make any change in your financial targets, considering the challenges you have faced since you secured the license to operate in Ethiopia? For instance, do you still think it is possible to achieve breakeven within five years, as outlined in your initial plan?

Yes, I do think so. I think the biggest challenge is the global inflation. The price of fuel is increasing. The same is true for cement and steel. All these things are going to be more expensive. I think this element of the business will be very challenging. Yet the plan is still to breakeven within four or five years. But we have to pay attention to the cost.

You are investing heavily in infrastructure development. And can you tell us how far you have gone thus far?

We will continue to invest with the money that we allotted when we started the business. Some places are easier. Addis is easier than the regions. This is because there are a lot of buildings to put on the antennas. So it is simple to deploy in Addis than other areas.

If it is easy, why did you first launch service in Dire Dawa?

That is a small town. It requires fewer sites. It is easy to optimize. The network rollout was very fast.

How long it would take to launch service in Addis?

Six weeks. We believe there is a massive opportunity in the capital, in every element. I have been working in 12 countries. I never had been in a country where a single company dominates everything. The market will be split.

Is there any place that you want to capitalize on, especially an area where ethio telecom has a little presence?

That is a nature of businesses. You grow until there is no place to grow.

How long it would take for you to be independent from ethio telecom?

I don’t think we want to be independent. The reason I say that is because old days where everyone builds its own infrastructure are gone. You have to share infrastructure. That makes more sense because that does not have any impact on your competitiveness. Why do you build a fiber where there is a fiber? That will be a waste of money.

There has been a social media outcry against your recruitment process. What is your reflection on this?

To be honest, I think it was not only on the recruitment process but also on the language we are using. It was also about distributors and how we are allocating distributors across regions. It was also about the religious mix of what we have in the office and what we have employed everywhere. There were a bunch of requests the activists raised with us. So, we did not respond immediately because we were supposed to understand whether these are true or not and see ourselves if there are problems. To be honest, I don’t think the problems are as acute as people are saying. What they did say is to be careful. For instance, if we go to Oromia, we have to use Afan Oromo. We have to pay attention to laws. We have put signs saying coming soon. It was us not being sensitive. We met guys behind the campaign. They were very moderate. None of them want to hurt Safaricom. They want what we do to be fair. They did not make extraordinary demands. That’s why we are comfortable to engage with them. I understand we have to be sensitive to the history, the culture and the current politics without going too far. It has to merit-based. Everybody coming to the company should be the best of the best. We have received a lot of advises from the government. All of them said “you must choose the best but be careful.”

Do you think it is possible for Safaricom to apply meritocracy in light of the current situation in Ethiopia?

I think there has to be a meritocracy. The qualification of the candidates has to be there. There should be no compromise. However, as we choose candidates, the priority must be given to the people within the region. It is not appropriate to start shifting from one region to another. Not because of other issues but language considerations are critical. People have to speak the language of the area where they are working.

Now let us talk about mobile money. I know you are in the process of launching M-Pesa here. Do you see any progress from regulatory body in introducing a legal framework to govern the sector?

The legal element is going fine. I think it is gonna be available very soon. Our shareholders are engaging with the government. From operational perspective, things are going well. We have put the app in place. We have put configurations in place. Everything is in a good shape. In technically perspective, we will be ready to launch service in the next three months.

The approval process of the bill may take another three months. Do you think that will have an impact on your plan?

No. We got so much to do. We have 25 cities to cover. We have massive network to build.

Do you think you can repeat the success of M-Pesa in Kenya here in Ethiopia?

Absolutely. Kenya is particularly amazing story. Wherever we launched M-Pesa, we were successful and we are leading the market. So we don’t see any way it is not going to be successful in Ethiopia.

Ethio telecom is already advancing in the mobile banking market. Are you expecting fierce competition when you launch M-Pesa?

I do expect very strong competition. They have done a great job in recruiting customers and strengthening the network.

From what I have observed, ethio telecom is taking an advantage of its link with public offices to facilitate payments in the public sector? Have you get any promise from government officials whether you will get the same opportunity when you launch M-Pesa?

We are talking them to now. There is no one said we are not going to get this opportunity. Yes, they had a one year head start. They have done great job in services they have launched. Yet I believe we can catch up.

How is the war in North Ethiopia affecting you?

We have a huge amount of work to do. I think it will slow us down in certain areas but we will continue doing our work in other areas. But everyone is sad to see the resumption of conflicts.

Are things in place to launch service in North Ethiopia, particularly in Tigray, if the war ends?

We will be ready as soon as communications are stored and get the blessings to go back in. We want to reach all over Ethiopia.

My last question is on repatriation. Many international companies usually complain about the difficulty of repatriating profit in Ethiopia. Some say it takes over a decade. How is your plan in that regard?

Repatriation is not a big issue. The issue is finding dollar to buy equipment after the investment window closes. After our money runs out, we need to get forex to buy equipment. Regarding repatriation, we knew the issues when we came. If it takes 10 years, it takes 10 years. We gonna be here longer than that. Of course, we want to repatriate but we are here for long term.

Oromia without fear that they will be turned back before getting to their journey’s end. Given upholding the fundamental rights laid out in the constitution is vital to assuring the very survival of Ethiopia as a cohesive polity, overstepping the constitution in the name of containing elements bent on wreaking havoc cannot and should not be tolerated. That is why it’s imperative to put an immediate stop to the blatantly unconstitutional violation of freedom of movement and see to it that it’s not repeated ever again. Goitom Tsegaye is deputy chairperson of Arena Tigray, an opposition party popular in Tigray. He has been voicing his concern over the war in Tigray since it broke out almost one and half years ago. The second time the conflict started, Goitom found it heartbreaking. He thinks that in carrying out the eagerly anticipated negotiations between the two warring groups, the African Union did not fully fulfill its obligations to the organization. The Reporter’s Selamawit Mengesha sat down with the opposition leader to get more of his perspective on the recent resumption of hostilities.

The Reporter: Let’s start with the war that erupted anew this week. Before the battle resurfaced, there were talks of a peace agreement. Is there still hope for negotiations?

Goitom: It is heartbreaking that the dispute has resurfaced this week. Since it began, there is a potential that it will continue, although much will be lost if it does.

War’s casualties are well known, and hopefully we have a government that cares enough about its people to put an end to it. They should have learned from their previous mistakes and avoided them, in my opinion.

Both parties demanded that mediators be appointed. What was the reason the two parties couldn’t agree on who should undertake the mediation?

Essentially, I believe there is one thing we should all remember: everyone must be fair and impartial while looking at things.

In a war, not everyone carries a weapon, but what we’re seeing in Tigray is people lacking necessities such as banks, water, transportation, telephones, and electricity.

We were taught to believe that these services were destroyed during the war and that the government was unable to repair them, but it is now clear that this was not the case all along.

According to the Tigray regional government’s discussions with the EU, the federal government is leveraging these necessities when it could simply provide them to the people; it’s using them as a weapon of sorts.

War has laws, but the warring side is separate from the people. The people of Tigray are also Ethiopian citizens; hence the administration is harming its own people. Personally, I believe it is not the best way to proceed.

I believe that the federal government should have learned from its failures from the beginning. I don’t think initiating a full-fledged war with the TPLF was the best course of action. Instead of attacking, it should have been defending.

It was not a prudent move, especially with other powers involved. What I mean is that the items the Tigray regional government is requesting from the federal government are essentials for the people.

Both parties bear responsibilities for doing the right thing by the people. I’m not sure why it’s framed as a difficult choice. It is for the people of Ethiopia; hence the government should have established a consensus for its people by now.

To return to the subject of the negotiations, the government already pledged to begin them without any preconditions. However, the offer was to negotiate solely with the TPLF, without including Amhara, Afar, or even Eritrea. Do you think these groups should have been taken into account during the negotiations?

I believe the government’s strategy was flawed from the start. We’ve observed unlawful acts such as Tigray transferring land to Amhara with the assistance of other forces, so what has the Amhara area lost from Tigray?

We’ve heard on several times, particularly in the case of Welkait, that the region is attempting to reclaim their land. Is it even their land is the question?

The structure of the regions, in my opinion, is fairly apparent.

I say this because there was a region called Show that later became part of the Amhara and Oromo region, a place called Bege Medhir became part of the Tigray and Amhara region, and if Welo became part of Afar, Tigray, and Amhara, then there is really nothing new that happened between Tigray and Amhara, unless there is a belief that if I am living here, there is no one else there, which in that case makes comprehension difficult.

Ethiopia and its land are inextricably linked, so stating the land was mine and I want it back makes no sense to me. Questioning the demarcation system is understandable, just as arguing “using language as a way of defining regions is wrong,” but claiming land in the same country is not.

Ethiopia’s land is reserved for Ethiopians. Sitting and talking with Tigray and the federal government makes sense because the government is clearly offending Tigrayans and requires mediation.

Because Eritrea was involved in the attack, having Eritrea participate in the talks makes more sense than having the Amhara region participate in the talks.

Understanding this, I believe, is critical.

As a representative of Tigray, Eritrea and the federal government should have discussed Bademe and other issues. However, in actuality, the federal administration has not been representing the people and territory of Tigray.

Negotiations have been attempted by international groups. We’ve seen people like Obasanjo come to the country and make attempts, and many people were optimistic that the talks would take place. Do you believe the conflict resurfaced because those bodies failed to carry out their duty properly? Or do you believe they carried out their responsibilities correctly?

I believe we should have taken the initiative.

Both the federal government and the Tigray regional government should have demonstrated interest in the negotiations from the start; only then could other groups assist in getting the talks started.

According to my knowledge, they did not fulfill their obligations, particularly the African Union. Aside from creating articles and laws, I do not feel the AU has a consistent and capable ability due to one of their articles; Article 2H, titled humanitarian integration.

Although the article has been ratified, the Union lacks the resources to put it into action. According to that provision, the Union has the right but not the resources to intervene in cases of humanitarian rights breaches.

For example, the AU did nothing to address the Tigray situation; there were words but no action. For these reasons, I didn’t have high hopes for the AU. It still has a long way to go, in my opinion.

Other international organizations with influence and power have their own military intervention regulations as well. The west has previously attempted to exert pressure on the administration, but international organizations such as the EU and countries such as the US are preoccupied with other matters such as the Ukraine-Russia war.

They have the ability, but their focus has been diverted away from Africa. They, too, lack consistency, as evidenced by their actions in Ukraine. As a result, I don’t believe they’ve done their part

They have the power and capability, and yet here we are.

Who do you believe is to blame for the re-ignition of the war? Could the difference in negotiation beliefs be the cause, or do you believe the absence of the Welkait and Humera concerns is a contributing factor?

As I stated at the outset, if we refer to the Oromia area, we need to know which cities and counties comprise that region. That is, the problems of Tigray and Welkait should not be a problem. I cannot argue that the requirement should not be met because the federal government granted the land without Tigray’s approval and is now requesting that Tigray accept it.

People who lived there before are now refugees. People are unable to use their own funds because banks are closed. All of these difficulties should be considered as prerequisites.

It’s not difficult to grasp, even for the federal government. People are hungry, so shouldn’t that be addressed first as a prerequisite before any negotiations begin?

I cannot accept the idea that there are no prerequisites. Negotiations would be conducted with a boot on the people of Tigray if those demands were not met.

I don’t have any information on who restarted the war. To be certain, I would have to live there. I am like everyone else, listening to all sides’ arguments.

What will the people of Tigray face if the fighting continues? You’re already aware of the issue. What do you think about the present humanitarian crisis?

I don’t believe that anything positive can come from conflict.

War will take innocent lives, destroy property, and deplete the economy, and what could be worse than that? Tigrayans are at a significant disadvantage.

They are under attack from their own government, former foes such as Eretria, and adjacent territories such as the Amhara region. It’s painful to see how something that should have been resolved amicably has turned into an injustice against the people of Tigray, which is also an injustice against the rest of the country.

Hopefully, people will realize this soon. I’m sure there will come a day when our empathy will be tested. Ethiopia will pay a high price as a result of the conflict. In the war, there are no winners, but all are losers.

Do you believe the constitution can deescalate and resolve the conflict? What are your thoughts on the matter? Is it possible to resolve the disagreement based on the current constitution and the new statute established by the federation under which regions could decide directly to be regions?

There aren’t enough people organized to hold a referendum. Furthermore, Tigray has no representatives in the House of Federations. How will Tigray make its case? Who will be Tigray’s representative?

At this stage, it would be child’s play; the most serious offenses have already been committed. Atrocities in violation of the constitution have occurred. International agencies have branded it ethnic cleansing, and some have even called it genocide.

So this is pretty strange. On paper, the constitution is just and fair, but its implementers are not.

Is it truly conceivable to exclude Eritrea from the war in the future if Eritrea’s government refuses to withdraw its troops? Will their departure solve the problem in any way?

I believe we must consider how they got to be involved in the war.

Did the federal government request that its troops participate? Was the Parliament able to represent them? I mean, there are multiple options, right? Who delegated authority?

These points must be addressed first.

It would be pointless to question something that has no legal foundation. Was a formal agreement reached between the Ethiopian government and President Esaias? If so, what were the terms, and where are the documents?

Is it even conceivable for an Ethiopian Prime Minister to pull out such a deal out of the blue? He cannot. To begin with, it must go past Parliament.

As a result, the question of whether Eritrea should withdraw has become extremely convoluted, with numerous loose ends.

We have observed that since the beginnings of the war, a large number of Tigray-born residents living in various cities throughout the country have faced discrimination and harassment everywhere they go. They couldn’t return to Tigray due to the war, and during this time, everybody from Tigray or of Tigrayan ethnicity was in a plight. That had been subsiding to a degree in recent months, but now that tensions have resurfaced, what does this mean for Tigrayans living around the country?

This is a clear problem. Kibrom authored a book and was detained because of his ethnicity; he traveled to Afar and got into a lot of problems; I’m using him as an example, but there are many others like him.

What is the UN peacekeeping mission doing now? To be honest, I don’t think it was even this horrible during Derg’s reign.

Innocent people are openly mistreated based on their race, with some even losing their lives as a result. Tigray is not being represented by the government, and this must change. It must reflect on its previous activities.

We are on the verge of a major crisis, which must be examined thoroughly.

It is unacceptable to feel unsafe and to face severe discrimination in your own country because of your heritage. There was a glimmer of hope. As you stated, the current circumstance may pass as it always does, but it may leave wounds and scars that will not go as readily.

Do you believe Ethiopia will be restored to its former glory in the future? What is the hope in a situation when many already believe Tigray is no longer a part of Ethiopia or that it would have a referendum? Do you believe Ethiopia is one of them?

It depends on the next steps we take.

As far as I am aware, Tigray is still a part of Ethiopia. Even Eritrea would have been a part of Ethiopia if not for the Adwa war and its consequences.

Right now, looking at the government’s actions against the people of Tigray, such as refusing to reopen banks, the internet, and transportation, it appears that there is a power that does not want Tigray to be a part of Ethiopia, which is incorrect. The China Foundation for Poverty Alleviation (CFPA) is a non-governmental, non-profit organization that was established in 1989 as one of China’s largest charity organizations dedicated to poverty alleviation.

The foundation, among other things, provides healthcare and nutritious food to vulnerable populations, with a focus on mothers and children; supports education programs; provides scholarships; builds infrastructure; and distributes stationery to help communities thrive.

The Ethiopian Civil Society Organizations Authority registered the Foundation in 2019, and it has been actively working since 2015 by collaborating with local and international non-governmental organizations on various projects such as school feeding, clean water, women’s economic empowerment, and refugee support. Sisay Sahlu of The Reporter spoke with Emma XiaocenXuang, the country director of the foundation’s Ethiopian office, about some of the project activities in Ethiopia.

The Reporter: It is unusual to see the Chinese government involved in such areas, particularly in poverty alleviation. What are the goals of establishing this foundation?

Emma XiaocenXuang: This is the basis of a total charity organization founded in 1989.

The Chinese government’s fund for social enterprises provides 99 percent of its funding. In China, the foundation works in the fields of health, education, rural development, and livelihood. We are now investing in similar international engagement areas.

In Ethiopia, our official implementation agreement began in 2015 in collaboration with Ethiopia’s First Lady, Roman Tesfaye, specifically to begin school feeding in Addis, in over 43 schools.

We were collaborating with a local organization called E-network at the time, but they changed the name to Hailmariam and Roman Foundation. We were officially registered as a civil society organization in Ethiopia in 2019 after working with this foundation for about four years.

We started the registration process in 2017, but the government changed, so we put it on hold. We restarted in July of 2019.

What is the foundation’s international experience?

In 2005, we began working as an emergency aid provider, and in 2015, we officially began in Myanmar and Nepal as our first steps in Asian countries, with Ethiopia becoming our first African destination.

We began our project in Ethiopia and Sudan in 2015. However, we chose Ethiopia as the location of our regional office.

The Chinese government has extensive experience in poverty alleviation. What is the secret to their success? Are there any suggestions?

One component of the foundation is poverty alleviation. The People’s Republic of China has a very strong system, and China is very good at mobilizing all of the parties involved, such as companies, non-governmental organizations, the public, the government, schools, and research institutions, to engage in poverty alleviation.

All of those parties are working within this system, and there are numerous methods and areas for collaboration in the education and nutrition sectors. We incorporated the school feeding system into children’s basic rights and the education system, not just the Zero Hunger plan.

We also give quotas to poor areas, particularly at China’s two best universities, Tsinghua and Peking. According to policy, we provide a quota for the poor. This is because if you want to end poverty, you have to invest in education.

Similarly, we must construct a very strong housing system to ensure that all citizens receive the full package so that they won’t have to stress over things like, “Oh, I’m sick right now, so I’m going to the hospital and spending a lot of money, since the government is covering most of the cost.”

Both the government and non-governmental organizations offer benefits like insurance.

For instance, I was born in China. Both the government and my company provided insurance for me. However, I believe that identifying the poor is the most difficult task because doing so is the first step in providing aid to the underprivileged.

In this regard, the Chinese government created a system that can store all of a person’s information on a card that serves as an ID card. You can discover a person’s complete information using this card.

A person also has a complex set of criteria and evaluation standards.

If you have an income of up to 2300 Chinese RMB, that means you are getting out of poverty, and the next step is to observe and follow-up for a few years until you make steady progress out of poverty.

If they are in an accident or become ill, they will be forced to return to poverty and their names will be added to the poverty list again. So this is a national system implemented with strong leadership and complex evaluation criteria to identify, follow-up, and evaluate the entire system.

How can we balance the demands of the expanding population with the available resources? Is there any advice, particularly with regard to the food system?

You know, it could be the geographical location, but if you look at China, we have a very large land area. Even the climate in the north and south is vastly different. People in the south, for example, prefer rice as their main food, whereas people in the north prefer wheat. The majority of Ethiopians consume Enjara.

I believe it is about food diversity and nature’s gift. I couldn’t find any seafood in Ethiopia. Everything is imported. So, in comparison to geography and location, it is the gift of nature that I want to emphasize.

The second point to mention is that China has made substantial investments in its agricultural sector. We simply devised a number of methods for producing more food while working with limited resources.

For example, there is a well-known Chinese man who developed a type of improved seed by changing the genetics and received an international award. In the same situation, this new seed can produce more than ten times the yield of the original local seed.

Thus, we put more time, effort, technology, and other resources into our endeavors. The northwest region of China is characterized by extremely dry land devoid of any water. In order to effectively use rainwater for farm work during the dry season, we constructed a water sailor.

The other thing we do is drip irrigation, and we make good use of all the available resources. There are just too many aspects to it for me to list them all now.

When the land is distributed in pieces, the government in some places tries to use the entire land and bring all of the necessary equipment to do the farming all at once, saving money, time, and human resources while producing more products.

What can Ethiopia learn from Chinese agricultural practices in order to make better use of its resources?

The most important industry is agriculture. Ethiopia is also dependent on it.

I noticed teff is a main product, and it appears that farmers are having difficulty making a living from it. I recently traveled to the Amhara region, Somalia, Oromia, and other parts of the country. I noticed how friendly and hardworking the people are.

Their farming equipment, however, only uses cows; such farming was abandoned in China more than 30 years ago.

When I see this practice, I think to myself, “Is it possible for Ethiopia to develop without using adequate technological instruments?” And I believe it is preferable to bring more technology and do it more efficiently.

I want to be modest. I sometimes admire how they learn this from their ancestors and local wisdom, even knowing the direction of the wind and when it might rain.

However, because I am not an expert in the field, it is difficult for me to speak out without conducting an assessment and a survey. In China, there are numerous agricultural universities with a large number of professors and college students working in the sector.

They are professionals who are learning from both abroad and at home, and they provide an excellent representation of Chinese planting culture. Farmers are constantly being introduced to new cultures, technologies, and skills. We also organize farmers into groups to teach them how to plant properly in order to produce more products.

Another experience is that you are aware that individual farmers are extremely vulnerable and lack the clout and knowledge to bargain with the market and the upper chain. They only sell the original fruit for a very low price. They put in a lot of effort and got very little in return.

There is something in China known as a “cooperative” or “organization.”

It is a unified organization made up of all farmers, and the farmers choose just one or two people to lead their organization and send representatives to determine the prices of all products.

They bargain to determine the market price, and if they work together and make a profit, they split it.

The majority of Chinese practical and recognized engagement in Africa mostly takes the form of investments, loans, and credit provision. Humanitarian commitment to Africa is little known, particularly in comparison to the Western world. What prompted the Chinese government to get involved in such foundations and poverty-relief efforts?

The first point I’d like to make is that the China Foundation is a non-governmental, non-profit organization, and we take great care when discussing political issues. We are always neutral and on the side of the vulnerable.

My personal observation is that, initially, international aid is provided all over the world, particularly after World War II. So there is a tradition, and 40 years ago, China suffered greatly and received significant assistance from Western and other developed nations.

They invested heavily and brought some goods to China. You know, for example, for people like me, I have received an English education from the UNDP.

China was the first recipient of aid, and now that the country has matured and can no longer ignore these countries, it is time for China to accept responsibility.

So, doing business is one thing, and taking on social responsibility is quite another. There is no conflict, and we must proceed.

You earn money and support your people there, but you must invest locally to support the local community, which is natural. Here, we share common sense and concepts with both the government and the general public.

But, you know, because we only recently developed our economy to support the Chinese public, the concept of social responsibility is something that comes from a good heart. China has done a lot to eradicate extreme poverty, but poverty still exists, and people are becoming wealthy in a very short period of time. We sometimes solve the poverty problem, but we still need to work on the nutrition problem.

We can’t solve it quickly because it’s a long-term process.

However, the Chinese government is always concerned with the need to do something for the locals, and they encourage businesses to assist the locals and take more responsibility. It also encourages companies to invest abroad while also taking on social responsibility.

The funds for this foundation did not come from the government; rather, they came from the South-South cooperation initiative.

How much money have you put into Ethiopia?

We used USD two million this year, but depending on the project, the fund may grow if the situation allows us to move forward.

What have you done in Ethiopia thus far?

We want to do a lot of things, but some of our plans have to be put on hold, not only because of the COVID-19 outbreak, but also because of the conflict in Ethiopia.

We are now investing in education, especially in school feeding, panda bag, wash, and solar light projects. But school feeding is the first thing we’ve focused on because we believe the children deserve it and that it’s a basic human right.

In addition, we intend to construct the school kitchen and provide cooking supplies for the students.

We have received funding for it, but we have yet to make a decision.

The city of Addis Ababa has adopted the full standard of cooking that we developed based on Chinese experience combined with the first lady’s local experience. Initially, it was 40 birr for two meals (breakfast and lunch) per child.

We recently visited the Oromia region and plan to visit the Amhara region; we simply want to share our limited resources’ experience, models, and any other relevant information.

Our main goal is to create a model and share it with the government and other non-governmental organizations (NGOs) that want to get involved and contribute to the local community.

Do you believe this school meal can be sustained?

Of course, we will conduct an evaluation, and once we see how the school feeding program is working, we will not suspend it for at least three years. We need to ensure that once the program is running smoothly, we can extend it for more than three years.

But our aim and goal is to keep this school feeding program running from kindergarten to grade eight, and that is how we will proceed.

However, if the government says, “We have money and we don’t need you anymore,” we suspend it and shift our focus to other sectors.

Addis Ababa has started the program, but if you look at mothers’ cooking, you will notice that they only use three stones in the pot to cook the sauce, which consumes a lot of energy and is bad for their health.

They must get up early and are paid very little. As a result, we are attempting to provide more integrated and comprehensive support, such as building and maintaining the kitchen as well as providing cooking materials.

We commissioned some Chinese construction firms to create the design, which we have already implemented in one school.

It is a pilot project, and if it is useful and effective, we will undoubtedly expand it. However, the first step is to obtain electricity in order to provide modern cooking materials, which can also save energy.

How are schools chosen for this project?

We communicate and collaborate with the government, and they know which areas and schools require the most attention. We will go there on the ground and compare one school to another based on their recommendations.

Are you planning anything else?

Yes, there is a Panda Bag project that aims to provide kids with school bags that contain more than 100 school supply items, such as lunch boxes, water bottles, hygiene items such as soap and toothpaste, and all the necessary materials for the students.

Every year, we conduct an assessment by asking children, teachers, parents, and members of the local community what kinds of items they most need and which items they do not want.

We need to make more adjustments if any item is more needed. We make every effort to avoid any political or religious content in this gift. The donation was made in collaboration with the Ministry of Education.

We will send the entire quota to the Afar and Amhara regions this year because they are affected by the conflict.

What exactly is the challenge?

Of course, there are numerous challenges. Each project has its own set of implementation challenges. We have to buy the panda bags from local factories when we need to provide them to the children. We talked, argued, and bargained about the price and shipment from China with them during this process, because we couldn’t find the item in the local market.

Actually, we made it easier for you to invest in it in the local market, but you couldn’t find the right quality.

And something that worries me is that when we try to collect some items from the local market, I notice that they are coming from India or Turkey, and I believe that if we need to invest in the local market, we should get the materials from here, because buying imported materials is very expensive.

Of course, not this year. We paid nearly one million birr per year for the damage in the previous three years because we did not receive the tax-free letter. However, we received this letter this year. This entry was published on August 1, 2010. Yohannes Benti (PhD) began his career as a chemistry teacher for a high school in West Oromia in 1992, the same year he got his degree in chemistry from Addis Ababa University. He has been the president of the Ethiopian Teachers Association since 2009, having been elected three times. He is the lobbying group’s longest-serving leader, having ruled over it for more than a fifth of its existence.

He immediately became an active member of the Association. Before getting his master’s degree in Educational Planning and Management from Addis Ababa University in 2005, he earned a second bachelor’s degree in law from a private university. While running the Association, he got a certificate in Advocacy and Citizen Management from the Coady International Institute in Canada and a PhD in Educational Policy and Leadership from Addis Ababa University in 2019.

The Association has 700,000 members at all levels. For the past six months, university instructors have been protesting about inadequate remuneration and other difficulties, but the government appears to have mainly ignored them. They have even vowed to strike in the coming month if the administration does not present a satisfactory solution.

Yohannes is the president of the association that represents each university’s associations, as well as a member of the Board of Education International, a 32-million international union organization. The Reporter’s Samuel Bogale sat down with him to discuss the concerns of lecturers and the education sector.

The Reporter: What compelled university academics to issue an ultimatum as they request the government to make an adjustment on salary and work grade? Can you tell us what they asked, and why they didn’t get a response?

Yohannes Benti (PhD): The query from university lecturers is on Job Evaluation Grading (JEG) and its implementation, which the government decided to impose for all civil servants in 2019.

There were approximately 65 salary scales among civil servants when the government agreed to reduce these scales in 2010, but it was later reduced to 22 scales in 2019 and applied immediately.

Since 2016, the Association has represented both general education and university teachers in the study to implement the JED on civil servants.

We detected a problem with the scales and wages of general education instructors when it was brought to us for comments in 2019, soon before implementation. We later requested an adjustment to increase their grades from the Ministry of Education, which then met with the Civil Service Commission.

During the process, the requirement for university instructors was disregarded.

What substantial modifications were made to the pay scales for general education teachers but not for university lecturers?

The highest work grade for teachers, regardless of experience, was only six. When the JEG was established, we asked the government to help them improve their grades, and they eventually made it to grade nine.

These are the salary adjustments that university lecturers did not have the opportunity to make. High school teachers with a bachelor’s degree currently earn more than 12,500 birr per month, or 1,400 birr more than university lecturers.

The higher the grade point average, the better the salary.

What has been the reaction of university instructors since then?

They have been complaining during our series of meetings since its deployment in 2019, and have even requested back pay.

Last year, the associations at each university formally developed a list of approximately 14 questions. Our association was then part of a committee that made the requests to the then-Ministry of Science and Higher Education, which was later dissolved before responding to our queries.

The petitions have since been passed on to the Ministry of Education, which is now the regulator of Ethiopia’s universities.

They had complained not just about the JEG and salary scales, but also about overtime pay, consultancy fees, housing allowances, and tax-related difficulties.

Housing has long been a demand of the teachers, and the government has always claimed that it is taking action. So far, how has it been?

Since the implementation of a directive in 2016, teachers have been given preference for housing at their places of employment, either by building on a plot of land or by purchasing condominium homes in cities like Addis Ababa.

University academics are excluded from this due to claims that they were receiving housing benefits, and their universities may be in a better financial position to have their own buildings and house the teachers. However, some city administrations, such as Addis Ababa, have already started offering housing subsidies to their general education instructors.

For teachers, a home is not just a place to live but also a place to work. Regions like Oromia have long been doing outstanding work in providing teachers with houses by giving them land to build on. In Addis Ababa, some 5,000 instructors were also given condominiums.

For the obvious reason that many other people of the community also urgently require homes, the housing question does not receive a prompt response. However, up until the end of the previous year, roughly 110,000 teachers received land on which to construct homes, along with a few condominiums.

The government was recently warned by university teachers to respond to their inquiries or face a strike by the end of September. What is the position of your association on that?

Discussions can help solve issues. Such actions have a significant negative influence, thus we don’t advise them. We should keep asking and be open to the strong arguments we hear while at work.

The administration views raising the scale and compensation as a difficult task, given the current economic climate. The Association also understands the situation.

The homogeneity of pay across various universities is one of several other issues that are currently being addressed. Our Association is attempting to mediate disputes between the government and educators. Both the things that the nation can change and the things that should be put on hold should be done.

Threatening with prerequisites is useless. We condemn that.

The government has been supportive of general education teachers at primary, secondary, and vocational schools, including acts such as granting land for them to build their homes.

We will continue to request the same perks for university instructors.

The government recently announced that universities will have autonomy, beginning with Addis Ababa University this academic year and expanding to ten universities in two years. What are your thoughts on this development?

The proclamation for university’s autonomy has been in existence for a long time. It is unclear how it would be used at all universities at this point, but they are starting with Addis Ababa University and expanding to other campuses. That is something that universities would like as well.

Several teachers work at schools, primarily private ones, despite not having completed the teachers’ training program, also known as the Post Graduate Diploma in Teaching (PGDT). Who are the association’s members and who are the teachers?

Any educator working at any institution is eligible to join. A teacher is someone who possesses the necessary credentials, such as the necessary training, education, and capacity. The worldwide standard is also being followed in our nation.

Not everyone who attended school for a certain field of study is qualified to teach. Additionally, it is essential to possess the required pedagogical skills. Teaching abilities and expertise should be present.

You can’t teach English because you studied it. This isn’t just a problem in private schools.

Do government schools hire teachers who have not received PGDT training?

Sure. When schools experience a teacher shortage, one option is to train applied science graduates in PGDT and hire them in schools.

Initially, the goal was for these graduates to be trained and deployed, but due to an acute shortage of instructors, they were authorized to begin teaching immediately.

This is an issue in both private and public schools. After much deliberation, the government decided to require instructors in both private and public schools to complete the PGDT program.

The requirement that teachers need to fulfill after completing PGDT training has actually been a part of government legislation for quite some time. This training is offered by a small number of universities to all teachers, domestic and foreign. Private schools will be required to pay for their own staff training.

Teachers in universities and in general education are unemployed in northern Ethiopia’s conflict zones. How is your organization supporting these educators?

University professors from the universities in the Tigray Regional State would be able to register online and request reassignment, according to a statement from the Ministry of Education.

Even while we know that some lecturers accepted the risk and continued to work, there may still be individuals in the area who are unable or reluctant to do so.

We have a list of the teachers who were displaced in relation to general education teachers. We are giving a small sum to a few of them as a sign of solidarity.

Our request for assistance in reassigning 43 instructors was made to the Ministry of Education and even the Ministry of Finance, but we heard back that neither the Ministry of Education nor the Ministry of Finance oversee any elementary or high schools.

We will continue to support them while putting pressure on the government to transfer them to any school and location around the nation.

How is the Association, a significant player in the education industry, reacting to the most recent changes and new rules?

The education reform research, which began in 2016, was the catalyst for reform. The public then debated it in 2019 prior to its implementation. University education was expanded to four years, and a national high school graduation exam was administered in grade twelve. In Ethiopia’s justice sector, Tamiru Wondmagegnehu is a colossal figure. He has been working for fifty years and has witnessed four regimes in addition to becoming a walking library. He has a master’s degree in legal studies and international law.

He started out as a judge under the imperial regime and eventually worked his way up to become the vice president of the Supreme Court, Special Court, and High Court under the socialist Derg regime. However, he was detained along with three other Supreme Court justices when the EPRDF seized power.

Following his release from prison, he founded the Tameru Wondm Agegnehu Law Office, which rose to prominence in the nation. Ashenafi Endale Of The Reporter sat with Tamiru to talk about Ethiopia’s legal system.

The Reporter: What similarities and differences can you find between the legal system, the institutional makeup of the judiciary, and its operations under the imperial rule, the socialist Derg, the EPRDF, and the current administration?

Tamiru Wondmagegnehu: The Ethiopian legal system can be divided into four periods: before 1900, between 1900 and 1941, between 1941 and 1974, and since 1974.

Since Derg, we have been ruled by autocrats akin to the French Revolution. Under these regimes, the courts have been altering their characteristics and duties.

Ethiopia’s triumph at Adwa falls under the first category because it is known around the world and has received attention. Four diplomatic consulates started operating right away in Ethiopia. Ethiopia became the only nation of color to be acknowledged under international law.

Following the 1648 Westphalia treaty, Europe came to the conclusion that there was no other nation state than Europe and decided to establish a European nation state. Therefore, only European nation-states were subject to international law before 1900.

According to international law, Muslims and Blacks in particular were not eligible. That is why Europe began its colonization of the western hemisphere, including its policy of rushing to conquer Africa.

No international law imposed sanctions on Europe. They consequently run ferociously to satisfy their need for resources and markets. Ethiopia was the only African nation at the time to have created its own state boundary.

In circulars he sent to England, Germany, France, and Italy, Emperor Menelik described and mapped Ethiopia’s active boundaries. Ethiopia did not draw its border with other African governments, but rather with European invaders. At the period, as to this day, Ethiopia was surrounded by European colonial governments.

What modifications were made to the foundational rules of justice by the regimes?

Fetha Negest, a 500-year-old written code of justice in Ethiopia, was created under Zerayacob’s rule. However, the zufan chilot (the king’s court) was the only institution at the top until 1900. All the officials of the kings judge matters according to their ranks.

Foreigners began to enter Ethiopia after 1900, and Fetha Negest was no longer useful for adjusting to modern rules. The first cabinet was founded in 1900 by emperor Menelik.

The emperor was under pressure from the foreigners, particularly the French ambassador, to create a consular court. Foreign judges were therefore permitted to sit as judges alongside Ethiopian justices after 1900. The consulate court operated from 1900 until 1941.

Emperor Haileselasie I disliked the consulate court system when he returned from exile in 1941. Thus, in 1941, he issued the Negarit Gazette’s founding proclamation for the first time. The second Negarit, which announced the development of a modern legal system in Ethiopia, was released that same year.

Haileselasie gave the order for English professionals to set up police and court institutions in Ethiopia, which were established at the supreme, upper, Awraja, and woreda levels.

The head of the Supreme Court was a foreigner. Experts received their education elsewhere. However, all of the judges on the supreme and higher courts were foreigners. This persisted up until 1965, when Niguse Fithawok, the first Ethiopian, assumed the presidency of the Supreme Court.

The final judge during the emperor’s reign was Hailessilase. After the emperor was deposed, there was a void. Thus, in 1987, the cassation bench was formally constituted.

I served as one of the justices on the cassation bench during the Derg administration.

Derg didn’t interfere with the system of civil courts. However, the government formed the military court system in addition to the already-existing civil court system. It never presented its cases before a civilian court; instead, it either executes its victims immediately or takes them to a military court.

Judges were therefore shielded from political interference.

The judges were fully removed when the EPRDF came to power. It stocked the legal system with cadres and individuals who could advance EPRDF interests. This persisted up until the 2018 inauguration of the present administration. There are several things that the present administration is working to fix.

What aspect of Ethiopia’s legal system is most lacking?

The practice of law is not based on reason but rather on experience. Justice must be acrobatic, just like life. Every judge gains knowledge from the rulings of earlier judges. Of course, some claim that this only applies to “common law” and not “civil law.”

Ethiopia adopts a system of “eclectic law.” This indicates that the principles were taken from several legal systems. Ethiopia’s legal system, however, is a little unclear.

On the one hand, we have the civil law cassation bench. However, a cassation bench’s ruling becomes law, and all courts below the bench must follow the sentence. The model is now comparable to common law.

The Ethiopian justice system has been disrupted by this difference in legal systems. Continuity refers to the use of prior judgments as standards for upcoming cases. Continuity is crucial.

Continuity provides predictability and confidence, two important advantages. Your win-loss ratio must be accurately known before you file a lawsuit. All of the stepping stone articles are already familiar to you. The courts would be unable to accomplish their jobs if every case required an interpretation of the law. A predictable life cannot be ensured by a judicial system like this.

In both the United States and Europe, attorneys provide clients with percentages indicating their odds of winning and losing. Ethiopia is the only nation without consistently applied laws. The main flaw in Ethiopia’s justice system is this.

The court systems and Ethiopian Bar Association must cooperate on this.

The Ethiopian justice system’s organizational structure is the second significant shortcoming. Ethiopia’s legal system was totally centralized, like one sun, one sky above everyone, prior to the EPRDF.

Ethiopia was divided by the EPRDF into nine different states, and that number is currently rising. There was discussion about how to reorganize the legal system after the EPRDF came to power and Kifle Wodajo was selected the leader of a group of specialists.

Some contend that, like prior governments, the justice system must be centralized. But the head of the Indian Supreme Court, Bagwati, present to offer advice, contended that Ethiopia cannot afford a decentralized court system. Others, however, believe that since the EPRDF formed a federal government, it must be decentralized.

Finally, the regional states and nine distinct court systems with nine supreme courts were approved by Parliament.

Ethiopia became the second nation after the US to implement a decentralized judicial system.

Under the US Supreme Court, there are 52 supreme courts. Because of this, America is the nation with the most lawyers. It is a new jurisdiction every time you enter a US state, thus the lawyers have to learn numerous laws in one nation.

The American federal structure is imitated by many countries, including Germany, but not its legal system. A decentralized court system was rejected by Nigeria, India, and many other federal governments because it was too expensive.

A decentralized court system appears advantageous at first glance. However, it is also expensive in terms of resources, both human and governmental. All we can do is hope and pray that Ethiopian leaders will be able to change this and unify the legal system.

How can the two main bottlenecks be eliminated at this time?

The constitution ties everything together. Ethiopia’s judicial system, however, can be centralized despite the fact that the structure is a federal one. India and Nigeria are two prime examples.

Currently, if a lawyer in Ethiopia wants to practice in many regional states, he must obtain a license from each of the regional states. However, if Ethiopia’s justice system is centralized, all of the regional states use the same article. A single license allows a lawyer to practice law across the entire nation.

In comparison to a federation, Ethiopia’s legal system is more like a confederation of states. Such a system is unique to the US, and only they can afford it.

Ethiopia is a small nation when compared to the size of America. Therefore, a decentralized justice system is not needed. It is incredibly difficult to reform and modernize Ethiopia’s judicial system. There may still be ineffective judicial systems in remote areas of the nation even after creating a centralized one.

How can the present border disputes with neighboring nations be resolved given that Ethiopia’s boundary was shaped by colonial powers?

England, France, and Italy all had boundary accords with Emperor Menelik. However, agreement does not imply demarcation. Ethiopia naturally agreed with England but not with Sudan. The current issue with Sudan stems from this.

The Prime Minister of Sudan, Alnimeri, and Haileselasie got along well. Just before the emperor was ousted in 1972, they were about to start demarcating the border. I hope Sudan and Ethiopia will start the delineation process right away.

Emperor Yohannes pleaded with England in the 1870s for assistance in keeping Masawa under control. Even though Yohannes assisted them in rescuing English troops in Sudan who were being surrounded by Mahdists, England refused. Meles Zenawi voluntarily gave over Assab a century later.

This is a huge contradiction.

But the situation with Sudan is becoming increasingly complicated.

As long as the 1972 agreement is in force, it can be resolved. The issue is that the borderlands’ value has increased recently. Ethiopia’s biggest issue is the absence of a succession plan whenever a new regime takes power.

Haileselassie came to an accord and was about to draw the line with Sudan. Sadly, Derg surpassed Hailesselasie. Derg, however, started over after stumbling everything the emperor had begun.

No Ethiopian administration adds on the successes of the preceding administration. Whether it be with the legal system, politics, development, or anything else, this is the root of practically all of Ethiopia’s problems.

Others have suggested Ethiopia may be able to reach the Red Sea via Ras Dumera, a thin free line that runs between Eritrea and Djibouti border.

Africa is home to fourteen landlocked nations. There is no other nation, however, that is as big, and as populous, as Ethiopia. The thirteen African nations that were already landlocked begged the UN to intervene before Ethiopia became landlocked.

Aid couldn’t get to these landlocked African nations. Even when a machine is replaced by a different brand, spare parts still come in. Because perishable goods take longer to reach the landlocked countries, importing them was unimaginable.

In order to negotiate between the African states, the UN tasked Yusuf Ahmed, at the time Ethiopia’s transport minister. This occurred under the Derg, shortly after which Ethiopia became a landlocked country.

A Kenyan academic once stated that Africa shouldn’t have more than 20 ports-accessible nations. He claimed that because even tiny governments are permitted to be countries, landlocked nations are created, dividing Africa into 55 countries.

However, the AU is introducing a very efficient procedure to grant all African nations access to ports. This will become a reality once the African Continental Free Trade Area (AfCFTA) is completely operational.

Of course, until Ethiopia uses them, the ports in Djibouti, Eritrea, Somalia, and other countries on the horn of Africa stay inactive. Masawa Port was undoubtedly a crucial tactic in WWII, acting as a stepping stone for the allied troops’ advance into Eastern Europe.

Currently, Ethiopia is attempting to enter Berbera port, which is positive.

Haileselasie made every effort to integrate Eritrea into Ethiopia in order to get access to the port. Assab port is obviously useless if there is a blockade of any type at the Suez Canal or Babel Mandab. Ethiopia is better off using Berbera port. There is nothing anyone can do because Berbera is the gateway to the ocean.

How can Ethiopia’s efforts to secure ports be impacted by Somaliland’s de facto status and lack of recognition?

The issues in the Horn of Africa can only be solved by peace. The horn has a sizable population. The chaos persists if this force is not used to development. Countries in the Horn of Africa must work together for the benefit of all.

The fewer jobs we produce, the more unstable we become.

Why do young people join OLF-shene, TPLF, or other armed organizations when they could get a respectable job, a home, a car, and vacation packages? Everyone wants to see equal development because they want to see their own country prosper.

Progress can lead to peace.

Due to the absence of an independent African state at the time, Haileselasie was banished to England. For that matter, there was no state.

Many people agree that Africa’s instability stems from the distribution of the same ethnic groups among its various states. Can African countries redraw the borders that colonial forces drew and reestablish nation states?

Ethiopia was at the vanguard of African decolonization in 1963, when the Organization of African Unity was established in Cairo. The main issue when the UN decided to decolonize was how to recognize and define the borders of African states. War was imminent amongst Africans if they had to trace frontiers back in time.

The UN and OAU ultimately opted to keep things as they were. In other words, borders and states begin at the location of the colonial boundary.

Each nation in Africa has territorial claims. We can’t, however, go back in time and fix it.

Ethiopia once ruled a sizable region, including the modern-day nation of Yemen, during the administration of King Kaleb in the fourth century. But we can’t claim it now.

The answer is that by uniting Africa through the AfCFTA, the AU’s economic integration agenda can eliminate the need for political frontiers.

Of course, Ethiopia is the nation that will be most negatively impacted by the status quo. The Congo, a sizable nation abundant in natural resources, was about to become landlocked. However, they were able to enter the Atlantic Ocean by Kabinda that was incredibly small. By the way, Congo provided the uranium for the bomb dropped on Japan.

A little opening between Djibouti and the Eritrean border allowed Ethiopia to reach the Red Sea. However, nobody is willing.

A serious hunger broke out during the Derg, and Nordic nations wanted to send aid cargoes. However, there was no way for the supplies to reach Ethiopia. Nobody would have protested if the Derg had taken one of the ports in the Horn of Africa at the time by force.

Ethiopia’s survival will depend on how its ports are handled in the current context of rising import volumes and growing population. It will either receive a peaceful response or a harsh one. Ethiopia must have a port, if only to use the congested route between Eritrea and the port of Djibouti.

The Ethiopian government also has to improve diplomatic connections with the surrounding nations so that they will consent to us establishing our own port.

Do you believe that Ethiopia’s conflict and ongoing instability are a result of the country’s power structure?

Ethiopia’s primary issue is underdevelopment as a result of missing out on the Enlightenment, the Industrial Revolution, the Agrarian Revolution, and the Technical Productivity Periods of the middle Ages.

According to Gibbon, who lived two hundred years ago, “the Ethiopians slumbered for over a thousand years, oblivious of the world by which they were forgotten.”

Of course, since we remained closed, we were not colonized. The mountains of Ethiopia were impenetrable to any force. Due in part to the progress that colonizers sparked, several African nations outperformed us.

Ethiopia nevertheless continues to be rich in resources and treasures. The only nation in Africa with a written past and its own alphabet is Ethiopia. 80 percent of Ethiopia’s bibles were completed and authored in the sixth century. At the time, the western bible was still in its infancy.

Additionally, Ethiopia was crucial in the spread of Islam and Christianity. Ethiopia was the destination of the first Hijira, not to Meca and Medina.

Unfortunately, because we were isolated for a millennium in between, Ethiopia’s civilization did not maintain its early impetus. We woke up when the world is already way ahead of us. We were still plowing the ground with oxen and yolk when Ethiopia awoke once more.

Youth in rural communities no longer have access to land for farming as a result of the land policy. Therefore, everyone is moving to the cities. Not only are Ethiopian towns crowded, but the proportion of farmers is out of proportion to the country’s growing consumerism.

Unemployment is widespread. There is a shortage of farmland. Ethiopia’s current issue stems from this. For the first time, PM Abiy Ahmed is attempting to spread large-scale agriculture to lowland areas in addition to the rain-based, often small-scale farming in highland areas.

What do you think of the administrations ongoing judicial system reform?

We voluntarily submitted to Ethiopia’s complicated legal system. One institution cannot bring about justice system reform. Huge amounts of public resources are being used by the decentralized justice system.

Ethiopia cannot support a decentralized judiciary when dozens of regional entities each have their own legal framework. This has to be combined.

Abiy recently complained to the parliament about how corrupt the legal system and police are. A few judges have been furious. It is well known that some judges accept bribes. Even judges of the top court experience this.

It is incorrect to hold the PM responsible in a legal system as tainted as Ethiopia’s. Though it is a challenging undertaking, we must find solutions to fix the issue rather than pointing the finger at one another.

The Court has the most authority in any nation that wants to advance. The future of the nation, business, and daily life depend on the Court.

What big setback do you believe has occurred since PM Abiy came into power? Was the transition peaceful?

We must research the causes of our ups and downs. Ethiopia has not done a very good job at nation-building. There are distinct state borders in Europe. However, the societies are very interconnected and quite similar. They are similar in terms of culture, languages, and universities. But the Ethiopian society has been segregated from one another, living in separate cultural enclaves.

Social media is currently dividing our society even more and pitting everyone against one another. Nobody is accepting accountability. We have much work to do in order to build a civilized society.

Ethiopia’s unemployment and unrest don’t surprise me because I am aware of our incapacity to provide quality labor and excellent jobs.

Five years ago, nation-building and good governance were the social movement’s top demands. Today, the issue has expanded to include the state’s continued existence. The student movement during Haileselasie began with a “class struggle” and concluded with ethnic politics in a similar manner. Why do political groups in Ethiopia consistently fail to achieve their goals?

Due to the students’ limited exposure to other ideas and the “class struggles” popularity in Cold War-era politics, the students’ movement adopted it. However, the class battle diminished and gave way to an ethnic conflict, which Meles Zenawi pursued.

Many Ethiopian academics today, particularly those in the diaspora, believe that ethno-nationalism poses a threat to the state’s very survival.

This indicates that the nation-building process in the country has been derailed by ethnic identity politics, which is having an impact on both the nation-building process and the state’s very existence.

Nationalism is not necessary for Ethiopia. The United Kingdom, France, the Netherlands, and even Italy are examples of nation states. The US, however, is not a nation-state. Europeans make up half of the American population.

One hundred years ago, Ethiopia became a nation-state. However, due to a number of criteria not being met, Ethiopia was unable to become a nation-state.

Many academics, particularly those from Addis Ababa University, continue to vehemently inform the media that Ethiopia needs to become a nation-state.

Talking about nation states now is a farce. Instead of a nation state, Ethiopia needs to be a patriotic state. Everyone in their own ethnic group is patriotic. Every Ethiopian, including Oromo, Kembata, Amhara, and everyone else is a patriot. That is what the United States is.

Everybody is present in America, including Latinos, Chinese, Indians, French, and Blacks. However, they never give up on the United States, which is their nation. Although they are patriotic states, they are not nation-states. To advance a patriotic state, we must work together.

In Gojam, there is no such thing as a pure Amhara. Every ethnic group has ancestors from different ethnic groups. Only our names reflect our racial origins.

Ethno-nationalists and ethio-nationalists swing back and forth in Ethiopia’s politics all the time. This constantly sparks conflict and a struggle for dominance. How can we transform it into a nation of patriots?

The constitution may impose restrictions on it. It can be written into the constitution if everyone agrees to it. Otherwise, Ethiopia will experience civil conflicts and revolutions.

Many people concur that the majority of Ethiopia’s issues can be resolved if the present constitution is altered. Do you agree?

It should be altered, in my opinion. Both educated and uneducated individuals are condemning PM Abiy for sticking with the current constitution. The constitution is frequently compared to an Ark. If the public does not believe in the law, it is just a piece of paper.

Therefore, if a carefully considered constitution is substituted, Ethiopia’s issues can be resolved.

Human rights advocates and even government representatives claim Ethiopia’s judicial system, especially the court system, is unprepared to handle cases involving human rights violations. They advise Ethiopia to start accepting the jurisdiction of extra-national judicial systems as a result. This means that Ethiopia must recognize the authority of regional and international tribunals over any violations of human rights.

Does doing so undermine Ethiopia’s sovereignty?

Only when the executive, judicial, and legislative branches operate in accordance with the check and balance principle can Ethiopia’s justice system be said to be in operation.

Judges are only answerable to the law. Because I criticized the Derg’s military court system, I was removed from my court position. Since 1948, Ethiopia has fully embraced the rule of law. Judges must, however, exercise their authority.

Courts have full authority to resolve any dispute, with the exception of arbitration disputes. Ethiopian courts have the authority to adjudicate matters involving violations of human rights, particularly at the high courts and Supreme Court.

The establishment of a different type of court system in Ethiopia must be spelled out in the constitution. For human rights matters, we can set up special benches, but we cannot establish a separate court or division.

The UN human rights commission is currently requesting entry to the country in order to examine human rights abuses that occurred during the Tigray war. The agreements and treaties were approved by Ethiopia. What would happen if Ethiopia resisted?

We have observed that the west consciously wants to harm Ethiopia in numerous instances. Since the founding of the League of Nations, this has been the case. Sanctions are being imposed on Ethiopia.

Mussolini would not have been able to attack Ethiopia if only the US had imposed gasoline sanctions on Italy. Because the US continued to supply fuel to Italy at the time, Mussolini resumed the invasion.

Ethiopia was brought up thirteen times in UN Security Council discussions last year.

International law thus serves as a vehicle for both justice and abuse.

The US regularly uses the UN to impose sanctions on nations it wants to destroy.

Never should Ethiopia yield to outside pressure.

Ethiopia has ratified a number of international human rights accords and conventions. By the way, Theodore Roosevelt’s wife was the one who first proposed the 1948 Universal Declaration of Human Rights (UDHR).

It forbids the use of cruel or inhumane punishment. Ethiopia had a death penalty at the time. The emperor delayed ratifying the UDHR rather than repealing the death penalty law. Ethiopia, however, is the first country in Africa to sign the deal.

Politics is at play right now, not just a general worry about human rights abuses. Before authorizing foreign investigators and acknowledging their jurisdiction, it is imperative to exhaust all domestic options. Extra-national venues may be taken into consideration if there is no statute allowing human rights victims to appear in court or if the court is unable to uphold the law.

America commits to defending democracy. Democracy is the majority’s way of ruling. Therefore, by simply agreeing, the majority can flip the truth on its head.

Can the Chief Justice of the Supreme Court call the executive to inquire of him or her? How are checks and balances made?

The Chief Justice of the Supreme Court lacks any judicial or executive authority. The president only serves as the court’s speaker. The president only responds when asked.

By the way, a judge on the Supreme Court is distinct from a judge in a lower court. The author of ye’ ewunet Mirkuz, and a lawyer, Wondimu Ibsa was born in 1947 in Arsi. Having survived the 1969 revolution, he joined Wez League and then started teaching. In his career as a former politician, Wondimu had gone through several challenges as a former politician before becoming a lawyer. He survived the 1969 revolution in Ethiopia and was arrested in the famous Maekelawi for 150 days. When he decided to become a lawyer, his first task was serving political prisoners facing terrorism charges. Lately, he is more known for sharing his political views on main stream media outlets. The Reporter’s Selamawit Mengesha sat down with him, as he reflects on current affairs and his journey in politics of Ethiopia.

The Reporter: can you tell us a bit about yourself?

Wendemu Ibsa: I was born in what is considered a large family. I had 17 sisters and brothers and my father had 47 children from 3 different women. When I was growing up the schools in Arsi used to encourage us to learn Amharic. And some people associated it with racist remarks but it was purely to help us learn other languages.

I was amongst the students who survived the 1969 revolution, I was in ninth grade and I remember crying to my mom when soldiers would beat us senseless. When the ‘edget behibret’ campaign started, the Ethiopian People Revolutionary Party (EPRP), wez league (ወዝሊግ) and All Ethiopians Socialist Movement (AESP) were wreaking havoc across the country.

I joined senay leke’s party Wez League. Students whose average was above 90 were selected to give after class courses back then, for which I was selected. I started working as a teacher starting from 1969 to 1971 with a 180 birr salary. Through all of this, we were running the revolution on the side.

I’ve went from having my parent’s religion to having no beliefs but I eventually got baptized at 40 years of age and became an orthodox Christian. I then worked as a money collector at the church for four years.

I was also detained in the famous ‘Makelawi’ for 150 days, when EPDRF took power in 1983.

I’ve also worked as a supervisor and a director in Hawassa. As a lawyer in Adama, I joined the Oromo Federalist Congress in 1998–2002. In 2006, when more than half of OFC members, including Merara got arrested, I decided to give my services as a lawyer. Back then, lawyers used to charge more than 300,000 birr to represent people accused of terrorism, because representing people accused of terrorism could label them as terrorists as well. Knowing this, I offered my services at makelawi for free, and since then I have represented 600 people accused of terrorism.

When I was serving free of charge, I faced a lot of opposition from people including my family. I remember a judge telling me that I can’t defend people charged with terrorism anymore, but 17 of my colleagues had already decided to represent those accused of terrorism.

Prime Minister Abiy Ahmed (PhD) has said they will not arrest anyone without due diligence, yet we are seeing a lot of people arrested abruptly and detained for several days without cause. What do you think changed?

“We don’t arrest without due diligence,” is just a political way of speaking. Currently, the parties in Ethiopia including the incumbent follow a party politics system, meaning it is the top executive’s playground. A political party stands for justice for those that are with it or against it. The parties in America, the republicans and democrats, are political parties, while Prosperity Party, Ezema, ABEN, Enat, amongst others, look like they are trying to shift from party politics into political parties.

A lot of Ethiopians were involved in the green legacy campaign. But out of the 53 parties, not more than 10 were involved. Why weren’t the rest involved? The legacy is not for the PM but rather for generations to come. They could have contributed to something that made a difference but the only objective of party politics is to obtain power.

When Abiy said that, it was in the essence of party politics. To whom does the PP belong to? Is it for the prosperity of the city, the rural area or the farmers? It should have been called “Ethiopia’s prosperity political party.”

Political parties care about the country, its people, history and culture. Even if political parties try to gain power they still stand for the people. The Civil Code, which has been in action since 1952, says that people can be arrested based on suspicion with or without a court ruling. Back in the feudal days, it was only allowed to arrest suspects from 6 in the morning till the sun sets but not after even if they were guilty. Police can surround him but they can’t arrest him, no matter who the person is. If Abiy does not practice this law, then the EPRDF and Derg’s plague hasn’t quite left his system yet.

The practice that is becoming normal these days where they hold people in prison for eight or nine days is not acceptable by law. Statements like “We don’t arrest without due diligence” are said with a political intent. Politicians and political parties think about what to say to get more applause instead of thinking what would actually benefit the people.

What is the cause for the killings of innocent people in Ethiopia? Who do you think is responsible for these acts?

The instability in Ethiopia has its roots dating hundreds of years back, back when colonizers had their eyes on Africa. The victory at Adwa was not just a victory against Italy but against the whole of Europe. Ethiopians used to unite to defeat these outside forces. When the west found out the secrets to Ethiopia’s victory happened to be in our unity, they needed to dismantle this unity through civil wars and parties. These parties who have a budget from the west have the sole purpose of creating conflict and rift between ethnicities.

Controlling the source of income was also a measure used by the west since the country is dependent on donations. After the 1945 World War, Japan was forced to adopt a strong military system. Within 30 years, Japans capacity was just as good as the UK, after changing the policies they were forced into. The donations are an indirect attempt at colonization.

The crimes we’re witnessing today is a result of years of planning by the west. There is this thought process circulating where people think their ethnicity came first or that it is better.

Even banks organize themselves based on ethnic lines; they have the “divide” mentality. People that are losing their lives are Ethiopians and there is no need to classify them based on ethnicity. Being proud of your ethnicity only validates Ethiopia more, because our ethnicities are found within Ethiopia.

If we take the religious approach on how humans originated, it started with Adam and Eve. They were human beings and not Amhara or Oromo. We are Ethiopian’s first then ethnicity follows; so, to refer to the atrocities in Wollega as atrocities committed on Amhara women is accepting the narrative pushed by colonizers.

Amhara’s policy is Oromia’s policy and vice versa; we can only salvage Ethiopia when we stand all for one and one for all. Being Oromo, Amhara or any of the other 80 ethnicities is natural but claiming one is superior over the other is immoral.

How do you think this can be mitigated?

Parties and politicians that stand for terrorism should be dealt with to make way for the people to have an active role. The government feeds 1.7 million students in Addis Ababa and its surrounding. It provides books, uniforms and bags. The only thing families worry about is providing the dinners. This is not something to overlook. When I say this am not saying prosperity party or Dr. Abiy are without flaw, all governments have flaws.

The community’s outlook on laws and courts is relatively better than it was before. Do you think this has anything to do with the organizational change? If there is change since most organizations are individualistic, how can that be mitigated and continue long after the individuals have left?

Prosperity Party asks organizations to help it achieve democracy. A strong military can only be formed when there is a strong organization. Law enforcement is the government’s duty while respecting the law is everyone’s responsibility.

In a meeting amongst 1000 lawyers in Oromia held by the Oromia Lawyer’s Association, a lawyer said “there are no courthouses in Oromia, or judges. The only place where judges and courthouses exist is at the Oromia Supreme Court.” But there are Oromo judges and courts in Ethiopia. If we’re accounting for injustices, then every other supreme court could come into question. The acts of a few lawyers and judges that are deeply intertwined in ethnocentric beliefs do not dictate the profession as a whole. Even the PM has no right to misjudge the profession because there are honest judges and lawyers.

What should be done to promote accountability? Would people who have violated human rights be questioned in the court of law?

The current atrocities are due to terrorists, whether they are Oromo terrorists or Amhara terrorists. Both cultures have their own way of justice that involves forgiveness. The involvement of the elderly is needed.

Political parties are creating a better life for their children while condemning the innocent. Those responsible for these acts of terrorism shouldn’t be judged in court. All the region’s religious leaders and elders should judge and reconcile things themselves.

The newly formed National Dialogue Commission plays a vital role for this, but political parties have been skeptical since its inception. If all Ethiopians come together, it will help the national dialogue to be successful. As politicians put it, the dialogue is not one carried out between parties but one that involves farmers that make up 85 percent of the population. As of now racist politics and ethnocentric politics have spread.

The current problem will not go away easily. It will take several years of working together.

There is a noticeable change in courts after Meaza Ashenafi took power, but there are also a lot of problems at the same time. Just like how a teaspoon of poison could ruin a barrel of water, the acts of a few taint the entire institution.

How can we stop the problems in all the regions of Ethiopia? How can the region’s questions be answered while maintaining peace?

The people should give information as a way of solidarity with the government. The 547 representatives at the Parliament represent 120 million people. For a parliament member to talk about their own ethnicity alone is really shameful, they are not there to represent the Wereda that put them there but to represent the people of Ethiopia.

If there are people in Parliament that spread fake news, then prosperity party is negating its own progress. There are a few that are openly opposing the death of fellow citizens. When a citizen is hurt in wollega, there should at least be an opposing brief against it from the Parliament. If prosperity is leading the country, a region’s Special Forces should be able to help another region’s army. The defense force alone cannot save the country.

Rophnan Nuri, commonly known as Rophnan, is a prominent performing artist, musician, DJ, singer, songwriter and an audio engineer that blazed a trail for Ethio-infused electronic and house music. The Artist made a name for himself as DJ Rophi before releasing his first album, Reflection, in 2018. The album made him the first ever artist to release an electronic music LP in Ethiopia, becoming an influential figure locally and internationally.

Mixing traditional sounds with futuristic undertones and a powerful lyric, he dedicated his debut work as a voice for his generation. His work earned him multiple awards, featured with world famous groups like Major lazer, and collaborated with the Zambian rapper Chef 187 on the coke studio stage. He also held a successful country wide tour for a year and half.

His work and demeanor has earned him a feature on Forbes Africa’s 30 in the creative category, making him the first Ethiopian to feature on the list.

He recently released a successful album “3” earlier this year, which he followed up by “6” this past week. The two albums, which were released after his deal with Universal Records, offer incredibly produced music directed at the youth.

Rophnan announced the final album of the trilogy will be released before the end of 2022. Yosthena Aynalem of The Reporter sat down with Rophnan to talk about the mystery that is Rophnan Nuri.

The Reporter: let’s start from the beginning. Can you tell us about your upbringing and how you got into music?

Rophnan: Funny enough, it did not start out with music for me. Yes, I have known and loved music all my life but my journey did not start there. I am a singer but I am not just a singer, or just a writer. I am a recording artist that engineers and produces as well, but I am also a DJ. I think when you’re all of these things your journey must start with one thing. For me, it was recording.

I started recording sounds from a young age and little by little I went from recording to learning the guitar, DJ’ing and then singing. It all unfolded gradually to make me the artist I am today.

I remember I started recording my mom when I was 10 years old. That was my first experience of getting into music. Because to me it wasn’t just music, I thought everyone had the same relationship with sound and music as I did. Through time, I came to realize that not everyone was drawn to it the same way. At that age, I used to perform in front of students and they would love it, but I thought that was normal at the time.

I started recording my mom out of the love I had for her, I would use tape recorders that I make from scraps; I have always been a physics head because it helped me know the world better. I would always make things up from run down electronics or collect parts like dynamos; I have always been that kid.

I always wanted to keep a record of my mom’s voice in my tape recorder, so I’d play it on repeat until my battery dies and that was a 10-year-old me falling in love with sound and frequency. From then on, I started recording my little brothers, my neighbor’s kids, and my friends.

It became my way of keeping a photograph or picture of some frequency, those records painted pictures in my head that ensued emotions in me just like a picture would. I have recorded my mom till my last conversation with her, she is not here anymore, but I’ve kept her voice till our last conversation, so I have basically recorded my mom for 21 years.

So, how exactly do you experience sound?

I always see colors when I think of sounds, even when I am asked to do commercials. I will always ask them what their theme color is so I have a sound for that color. Every color in the way it’s painted or crafted has the same pattern in music because in order for something to exist it needs pattern. Music and creativity have a pattern of their own. A very good example for this is the project I did in Dorze in my first album, it was literally the pattern of their denguza (Welayeta Traditional Cloth) that inspired the music, and it is a mixture of black and red patterns.

So, the pattern on this attire is that when one color goes in, the other goes out, their song is the same way, so you can represent the color in different voicings and you have a pattern which is a harmony and the Dorze people are one of the most harmonious people and that is one of the things I learned from them.

Harmony is everything. It is embedded in their music, their day today life, culture; they know how to sing and be in sync within. That is how I see sound no different than pictures or any creative work.

What classes have you taken to master your craft?

Endless practice and my experiences were my lessons. I remember building my first studio with Abu-Walad biscuit box and Miyota DVD microphone when I was 13. I continued performing in class rooms and jamming, and I have also been listening to FM Addis 97.1 from the first day they opened. Eventually I started working there for three years later on in my life.

I think I was 10 or 11 when they started and from that moment on, my whole teenage time was spent listening to a lot of radio. Radio became a huge part of me, sound was everything because my experience is my mom’s voice but I started hearing her voice through other moms. Even when I travel and record, I know that tone, it has the same spirit.

A sound does not lie. That is why mostly my music is based on tone and notes. These are my inspiration when I make my music especially when I am trying to go deeper in the culture and get something out from it.

At what point did you start DJ’ing?

I started DJ’ing or I would say playing in mini media at the age of 15. I got introduced to computers at the same time and realized there is a thing called “software,” which allows me to record vocals and play with instruments that are already recorded, make patterns out of them and make music. So, I started doing that when I was 15.

What most people don’t understand is the reason my recordings are clear is because I’ve been recording for 21 years. I am more experienced than most people who are in my age group. I have been producing for 17 years now and I just turned thirty-two. So the reason why my production is this good and I am getting better every day is because I have been doing it for a long time. You have to understand that this recording, this clarity and this skill doesn’t come easily. You have to work on it and you really have to put your time.

When I turned 17, I actually started DJ’ing. I got introduced to a DJ mixer. I put out my first mixtape when I was 16, remixes of songs at that time, whether Amharic or English, I literally did what I used to do in the classroom and changed it into a record.

I already had recorded data in my head and the computer allowed me to turn that into a recording so I started DJ‘ing that music. It was a way to put my music out. It became the best platform for me instead of being a guitarist, a vocalist or anything else. DJ’ing was the first introduction for me to put my music out and then it goes on to working in Radio.

I used to play my mixtapes on the radio when I was 18, 19 or 20 and that gave me the platform to be famous. After that, I put out my second mixtape and then I continued producing even more, production has been there since I was 15 till now.

When I turned 21, I stopped putting out mixtapes after the third one because I wanted to do an album of my own. It took seven years of my life in the studio, worked day and night, 16 hours a day, every day, while DJ’ing at night and paying rent. That circle went on for seven years straight and then Netsebraq was born.

I went from 21 to 28 years old doing nothing but producing, learning how to write, learning to sing better, learning how to record, buying new better equipment, working on myself and my craft. It took everything out of me.

That is why Netsebraq sounds the way it does, it was crafted from scratch and I found a new sound for my generation the world has never heard of, a new sound for my country and for the industry and that took time.

I found myself in music, in a new way of writing, progression, of sounding, recording and all this took time. It was not just a project. Its impact can be seen through DJs coming into the mainstream, singers to find themselves. I hope I am not fooling myself when I say this but, I think Netsebraq proved to artist to be themselves and to sound like themselves. It brought free thinking to this industry but it didn’t happen overnight. It was something that was crafted for a long time.

When was the first time you Disk Jockeyed professionally?

I started doing my own Day Party’s after high school in college where I started throwing parties for people in my own age group and a lot of people came to my sessions. Back then, there was no platform you can use like Tik Tok so people just attended my parties using flyers and a lot of people showed up because of the mixtapes I used to release. At those parties’ attendees didn’t pay attention to the music, just how it made them feel, they don’t really understand the craft.

Out of the whole experience, what has been your favorite part?

Definitely my first album release party, because I had been working none stop before that and when reflection happened, I was famous in most cities as a DJ. I would go to Arba Minch and pack a place of 2000 people, as a DJ I was doing really well. I was making good money and had good exposure as well, especially on the last year before Netsebraq.

Netsebraq brought me to the stage as a singer, song-writer plus a DJ. The DJ part has been subtly following me. But my first album release party was a very special moment for me. It was three months after the album had dropped and the place was packed, people were at the gates lined-up because the place filled up early.

All of that happened within three months and it was very historic. An up-and-coming artist, who is a DJ, selling out a concert was not common; it was unheard of then. For me it was a moment I will never forget, because I remember the energy that night. I had never seen an energy like that in my life, that made me think to myself “oh wow, I have made it this far.” Seeing people sing along to songs that I wrote felt surreal, something I created spoke to them enough for them to know it by heart and that truly astounded me.

To answer the question, the release party truly stands out for me, especially when I was playing the piassa song. I remember time freezing, my friend and fellow DJ, who I grew up with, was back stage with tears in his eyes because of how amazing it was. We used to walk back home after DJ’ing because the first two years of my career, I didn’t have enough money to even pay for my taxi-fare home, so we walked to places instead. I dropped opportunities my family offered me to go to the US, I dropped out of Piloting school after completing almost everything, and I then joined computer school.

And were your family supportive through all this?

Well, my brother wanted me to go to Pilot School, he was ready to pay for it and arrange everything. I went and did everything, I didn’t think I would get in but then I ended up getting in. When I did, I went to my mom and told her that I made it in, that I could follow this path and that I didn’t think it was for me.

The only thing closer to music for me at that point was computers and I would rather go and study that. And she was very supportive, she said ok and that I should be careful. My family had always been supportive of my aspirations which I am forever grateful for.

I remember when I finally got the deal with Universal Records, the first thing I did was to tell my mom and record her in the process. She was always willing, she never turned me down. She was always there for me, had she said no to me backing out of pilot school back then, I would not be where I am today. Rophnan, as a musician would have never existed. I am forever indebted to them for that.

My father on the other hand used to always tell me “Whatever you do, sell it.” He never told me what to pursue or to stop music just that I should do what I love and whatever that is I should sell it. He raised all of us like that, if you love something learn how to sell it, so you’d learn to perfect it and love it even more. Selling it would give you the money, time and opportunity to grow it and polish it into something better.

If I never sold my first mix tape, even if my first salary was just 500 birr, I wouldn’t have had the resources to support my endeavors down the line. Money is money no matter how small it may seem; it will serve as a stepping stone. I am not saying to just do it for the money but you have to account for your time with something; gain something from it, no matter how small it may seem because your time is the most valuable thing you have.

You are currently amongst one of the top artists in the country, yet you are very private, not very active on traditional media but you’re also active on social media, why is that?

I wouldn’t say I am private, because I am always posting. People know what I eat, what the studio looks like, where I work out, when I’m working. If you ask an average person who follows me on social media what I do, they’ll tell you that “he eats healthy,” I go to gym at midnight.

But as for media, I usually don’t go out unto media because I don’t really have anything to say. I have been away from media for around two years now and that’s mostly because I didn’t believe I had anything substantial to say and I don’t want to come on and lie, so I chose not to say anything.

I am the kind of person who likes to understand people’s truth and delve in to it. I believe a lot of truth is subjective and I am open to hearing other people’s truth but I know that a lot of people don’t see it that way.

What I consider my truth might not be what people want to hear. So, if I were to come out on media and say what people want to hear and not my truth, it would be a lie. I never want to lie to my fans; that is disrespectful. I would rather communicate with my people through social media and show them what I hope would inspire them, show my craft and take them through my creative process. And when this album comes out, it wouldn’t be alien to them because they saw the work that went into it through my social media posts.

I would rather communicate through that because who am I to comment on things I don’t know and understand.

I know and understand that everyone also has their truth that they’re exposed to and I am nobody to negate or support that. Until we all find a common ground of saying I respect your truth as much as you respect mine, I don’t see the importance of going out in public and creating controversy instead of looking for a solution because we can see that nobody is listening to anybody anymore.

Everyone is looking for voices and opinions that confirm their truth instead of openly listening to everyone unbiased. So, of course I am private, because I have nothing to share that my fans don’t already know. I am just as confused as everybody else and if I can’t help, I would rather listen and try and learn about everyone’s pain and truth.

And to me, music helps me do that.

Interesting, steering a bit off topic, you’ve mentioned you regularly attend the gym at midnight, why do you do that?

For me, it’s more mental than physical, because I don’t want my studio to be the hardest thing that I do in my day. Because the hardest thing is always seen in comparison, the hardest part of your day is the most dreaded part no matter how much you love it.

To not lose the love, I thought I would create something more challenging for myself. Now for me, the studio will continue to be more exciting because it’s not as hard as getting up at midnight and going to the gym. Contrary to what most people would think being in the studio is very tiring. You sit there for hours and hours daily; the not knowing of what will come out of each session creates a lot of anxiety as well, so when I add the midnight gym on top of that, I would have a much harder thing to do, which pushes me to like the studio better.

I needed that push because I had to finish three albums in two and a half years. It took a lot out of me and not just me but it took a lot out of my management as well. To deliver three albums in this time frame was really hard. Normal working hours don’t quite cut it.

Back in the days, it was really hard for artists to make a living off of music but the tides are changing now and artists like you are making a difference in that. What do you think propelled that change from your part and your peers as well?

I know it is getting better comparatively but it is not on the trajectory it needs to be at. There are still artists that are not earning their fair share but I think YouTube democratized so many things. It gave the power to artists to some extent. What got better is not the payment but the exposure. Artists get to be discovered in a quicker, better way.

As for back in the day, if the person who worked at ‘hire treat’ did not like you personally no one would know your name. Now, we’re exposed to more artists because we have access on our own terms. Young artists have better platforms now and bigger exposure where their music gets the chance to be discovered by many.

For me personally, I am rooting for all of us. When I hear an artist getting paid a million birr or dollars for music, it makes me ecstatic whether I like the music or not. It makes me so happy because the industry is getting paid this much, which is a win for all of us. It would mean fewer artists who are unable to support themselves and their family through their craft.

At least they would set a standard of artists earning a good life. I think what is happening is there is the YouTube market that is supporting local artists. Even if the public isn’t directly paying for the music, they are exposed to it at least. There are platforms that would support artists even more like Awtar but people barely use them.

When people buy the music, the artists will directly benefit from that so I encourage listeners to get their music from platforms like that. I think that is the main market but for now, YouTube works wonders for the industry.

What are your thoughts on people saying Ethiopian music died after the golden age? Some might say today’s music is more diverse and the time for it is now. What is your input on that?

Whoever says the time for Ethiopian music is now, I just want to say that I appreciate you all. Because a lot of people discourage what the industry is right now, saying it could never amount to what it was back then. The way I see it, if you grow up listening to any type of music, even if it’s just whistling, you’re going to have an attachment to it because it would be nostalgic.

It is hard to compare today’s music to something that has been part of people’s memory for 40 plus years. There is a lot of memory attached to it that can’t be compared. It is like expecting a new born baby to win a race against a 40-year-old, if you were to give 20 more years to the new born they will definitely win against a 60-year-old.

So, if you give us time, we too will have that nostalgia factor that would make us amongst the classics in people’s mind. Every generation has a favorite and it mostly has to do with the memory attached to it. I think it has more to do with nostalgia rather than production, quality. The golden age music was well produced, very powerful and well written too but I don’t think they need to be compared with today’s music.

Today’s musicians are very creative. They too have things to say, they too are well written; the people making the comparison probably grew up with those songs and they might not understand today’s music. Not understanding something does not make it lesser.

Considering artists back then, even the greats, did not put out a lot of albums or singles when compared to today’s artists who put out music more often. Why do you think that is?

I think it was very hard to put out albums back then than these days. But artists suffer to put out albums these days as well. There are easier platforms to make and sell your music on but I think artists are still suffering in a sense that studios are not easy playgrounds to play on.

The industry still does not really pay creatives; studios, composers and writers are not paid the right way. So, until that day comes, don’t expect too much creativity because creativity is also run by the freedom of time that you can make music.

If I am not getting paid well, I’ll just do something to pay my rent. Something that is easier. That is why getting paid can make a difference. When I say this, people might automatically say in the 60s they were not paid but they did so many things, no they were hired by the government.

These writers were hired by the Ethiopian National Theatre, Ras theatre, Cinema Ethiopia, and all those bands in mazegaja were hired and they were workers who were paid a monthly salary especially during the time of Haile Selassie I. That’s their actual job. They were workers who went in at 2 o’clock and left at 8. Most of us are self-employed so that also has its own impact on what you’re going to do and what you’re going to deliver to the art because you can abuse that freedom as well.

In general, I don’t agree with the comparison and I don’t think it’s fair. My generation is putting out a lot of good stuff. Think about it, if you call your days the good days and things were so well in the 60s and everything was nice, then why you would expect better things from me then, while you understand I’m living in a worse time.

So, coming to the new album, you said earlier that you were into physics; does that have anything to do with the 3, 6, 9 and the universal numbers?

Yeah, I mean you have to understand the Orthodox Church has a big explanation over this because it has a lot of knowledge about the world and the universe and everything from ancient times, but also those teachings were spread throughout the world in different ways and one of the people who understood this in early times was tesla.

He brought this idea of these three numbers being the key to unlock the universe and to understand the whole thing. If you understand things from the perspective of frequency, vibration and energy, you’d understand the world in a much better perspective.

Instead of saying me, me, you will start to say us; instead of just boosting up your ego and saying, man is everything in this world. You will understand the relationship of man in the world. And then you will protect the world.

What I’m trying to put here is for my generation to see things from a bird’s eye view. Let me put it this way, everything that we use today, phones, computer, internet, technology, all these things that we kill each other for is made by the people who understood this, these higher understandings of the world. Because how can a person make a phone that can do miraculous things without understanding the world holistically. I think the perspective that we have about ourselves and the universe is distorted and that’s why we’re very tribal and biased.

The bottom line is, I think the understanding we have about ourselves and the world should change or should be in check.

So, what I try to do with this 3, 6, and 9 is to show people that there is a higher perspective of looking at yourself, the world, how it goes and how it functions. If you understand that, everything becomes lighter, everything becomes a shape that will be understandable by the next person.

The names are inspired from that. So, when people say, oh, it’s three, it’s six, it’s nine, it’s like you’re engaging with these numbers, raising curiosity amongst listeners to look into these numbers, which will hopefully raise a question in people’s head so that they can have a better understanding of the world.

It’s always much better to look at yourself within the world. What I mean by that is like, yes, you are you, but you are in the world so know the relationship you have with the world, and then you’ll have a healthy thought, instead of saying what did the world give me? You’ll understand and you’ll start to say, what did I give to the world, what are the things that I said this morning? Most of us we’re just living inside our head, we don’t really live.

How has the experience been with Universal Records?

Well, I’m learning a lot from how the world moves, how it works, how everything is intentional; intentional in a sense that the world is moving faster. It was like going from being a small fish in a tank into a small fish in an ocean, it’s so big and sometimes it’s challenging but exciting for the most part.

I’ve seen a lot of people working day and night to make things go the right way. For me, it starts from my management company, Dots, all the way to universal music Africa and the whole team who have worked tirelessly to make things go smoother for me. I am very thankful.

The one thing I’m most thankful for is getting to release 6 at this moment, because according to our deal with the record company, I wasn’t supposed to release it now but we demanded it because I felt my generation needed it. There are songs in the album I really want to put out at this moment because my generation needs it.

They’ve been willing to compromise on things for me and understand that I’m coming from a different side of the world that they never existed in. So, it’s been challenging for them and I can understand but they they’ve been nice to me, I feel like I’m in great hands to join the world.

Other artists like Aster and Gigi have signed to international companies and represented our country. Hopefully, I’ll be able to get to do that as well. I’m following in the footsteps of giants. I hope I deliver something worth a while. Honestly speaking, to join the international world has been a dream come true.

Do you still get to work on crafts that are still true to yourself?

Of course. They do not affect my craft, rather they just help. That’s what people don’t understand. People thought they’ll make me do things their way, if that was the case, I would have never signed anything.

They’re here because they loved what I do. So, why would they touch it? But they will help me delve in deeper. They want me to experiment in our cultural music more and they also allowed me to stay here. I’m still based here; I’m producing my music on our soil. I’m still intact with the people. I’m still a part of the community.

The future is exciting. I have a full control over my artistic freedom. They don’t bend my music into anything, they even provide me with more freedom and guide me through the lines, and present me with better opportunities.

What is the perspective of 6 and what does it mean?

Yeah. So 6 means a perspective of a six-year-old. When we were at that young and impressionable age, our intentions were clear and our ego was not built the way it is now. We were not stiff. We were eager to learn and we had a better understanding of the world.

I think in order to become a better generation, we have to learn how to become young and find our inner child. To tap into my inner child, I went to kids. I went to orphanages and just spent time with the kids, communicating with them, asking them to paint me stuff.

I’ll give them words and learn their perspective. For example, I’ll ask them for testify. Like, what do you think about the word testify? And they’ll just paint me stuff. Through the genius of my graphic designers Fanuel Leul and Tsegaw Tesfa, we were able to incorporate those paintings on the album art.

I also wanted for those six-year-olds to see themselves being represented, so that they can have better guts, that our traumas cannot hurt them, for them to have a thicker skin to say no to us, if we are ever to push our biases onto them.

I want my generation to be purposeful in not passing that trauma to the young. I am hopeful this would empower them both. We are alien to kids because our biases have molded us somehow. They don’t quite vibe with us that much. When they hear their voice in my album, they’re automatically engaged through the things that I say and to the songs that I put in there. It will eventually become theirs. So, when they grow up people will not manipulate them, the way we have been manipulated.

What can we expect going forward?

“9” is coming out in December and somewhere between then and now, we’re planning on having a festival celebrating all my music with fans.

It’s going to be a series of beautiful engaging events, and till then I hope everyone enjoys 6 and gets the message.

The TPLF is the enemy of Ethiopia and the people of Tigray point blank. The government says that it would make peace with the group but as Ethiopians we can’t forgive that party even if the government fulfils its diplomatic responsibilities. I did not say the people of Tigray, rather just TPLF.

The role of Ethiopia’s government should be identified; the election board should not be giving out certificates for parties that work with terrorists. If they get a certificate, then the TPLF would need one as well.

The country is on the precipice of prosperity now. Our current state could be depicted as a nine month pregnant women ready to give birth on any day. It is always darkest before dawn, Ethiopia’s people come together even stronger when there problems pile up.

We should be careful with parties that try and create the gap between ethnicities.

How can the government enforce a justice transition? What should be included?

Justice transition means the world did not get civilized through a revolution, but rather through reforms. Reform means averting the negative impacts and carrying on already started projects.

Justice transition implies those that refuse forgiveness and acceptance from the recently started national dialogue and the people that are being accused. Each one of the perpetrators will not be brought before court but instead will have to reconcile their differences in the regions customs, which is according to justice transition.

This is the outcome of the reforms. A new education law is now being drafted, in addition to changes to the education policy. These and other innovations in teacher education are greatly appreciated.

The Association applauds the improvements and supports the next developments.

In the last three years, for example, the panda bag arrived in Djibouti and stayed for more than a month, and we were required to pay tax. We would not pay that money if the Ethiopian government was facilitating faster. We occasionally lose bags or items in a warehouse where we keep the bags.

It’s pointless for me to go over what happened. It is all well known that we simply need to take our time and evaluate everything before coming up with a way to mediate it.

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ከ ቢዝነስ አምድ

የዘመን ባንክ ጠቅላላ ጉባዔ የባንኩን ካፒታል ወደ 15 ቢሊዮን ብር ለማሳደግ ወሰነ

ዳዊት ታዬ - November 9, 2022

የዘመን ባንክ ጠቅላላ ጉባዔ የባንኩን ካፒታል ወደ 15 ቢሊዮን ብር ለማሳደግ በባንኩ ዳይሬክተሮች ቦርድ የቀረበውን ሐሳብ ተቀብሎ አፀደቀ። የባንኩ ባለአክሲዮኖች ይህንን ውሳኔ ያሳለፉት ባለፈው ቅዳሜ ባካሄዱት ድንገተኛ ጠቅላላ ጉባዔ የባንኩን ካፒታል ወደ 15 ቢሊዮን ብር...

አልሳም ግሩፕ ‹‹አልሳም መንደር›› የተሰኘ የመኖሪያ መንደር ለመገንባት የመሠረት ድንጋይ አኖረ

አልሳም ግሩፕ በአዲስ አበባ ከተማ ያለውን ከፍተኛ የመኖሪያ ቤት ፍላጎት መንግሥት ባስቀመጠው የመንግሥትና የግል...

November 9, 2022

የቱሪዝም ሚኒስቴር የ2015 ዕቅድ በፓርላማ ውድቅ ተደረገ

ሦስት ግዙፍ ብሔራዊ ሙዚየሞች ለመገንባት ዝግጅት እየተደረገ ነው በሕዝብ ተወካዮች ምክር ቤት የንግድና ቱሪዝም ቋሚ...

November 9, 2022

የታክስ ይግባኝ ኮሚሽን ውሳኔዎችን ማስፈጸም ላይ ተግዳሮት እያጋጠመው መሆኑን አስታወቀ

ከታክስ ጋር የተያያዙ አቤቱታዎችን የሚመለከተው የፌዴራል ታክስ ይግባኝ ኮሚሽን፣ በሚሰጣቸው ውሳኔዎች ላይ የአፈጻጸም ተግዳሮቶች...

November 9, 2022

የገንዘብ እጥረት የኤሌክትሪክ ሽፋንን መቶ በመቶ ለማድረስ በተያዘው ዕቅድ ላይ እንቅፋት መሆኑ ተነገረ

የኢትዮጵያ ሕዝብ እ.ኤ.አ በ2030 ሙሉ በሙሉ የኤሌክትሪክ ኃይል ያገኛል የሚለውን ዕቅድ የገንዘብ እጥረት እያስተጓጎለው...

November 9, 2022

ርዕሰ አንቀጽ

ርዕሰ አንቀጽ

አስተማማኝ ሰላም ሰፍኖ አገርና ሕዝብ ዕፎይ ይበሉ!

የማንኛውም ጦርነት መደምደሚያ በጠረጴዛ ዙሪያ የሚደረግ ስምምነት እንደሆነ ዓለም የሚያውቀው ታሪክ ነው፡፡ የፖለቲካ ልሂቃኑ ችግሮቻቸውን መፍታት ባለመቻላቸው ምክንያት የሚፈጠር ጦርነት፣ ለዕልቂት የሚዳርገውም ሆነ ሕይወትን...

November 9, 2022

የጦርነት ቀንበር ይሰበር!

ርዕሰ አንቀጽ November 6, 2022 0

በደቡብ አፍሪካ ሲካሄድ ሰንብቶ በፍፁም ሊታሰብ በማይችል ሁኔታ ለሰላም...

የልማቱም ሆነ የሰላሙ ባለቤት የኢትዮጵያ ሕዝብ...

ርዕሰ አንቀጽ November 2, 2022 0

ዘንድሮ ኢትዮጵያ በስንዴ ልማት በዓለም ስሟን የሚያስጠራ ትልቅ ተግባር...

የሰላም ንግግሩ በእጅ ጠምዛዦች እንዳይጨናገፍ!

ርዕሰ አንቀጽ October 30, 2022 0

በደቡብ አፍሪካ እየተካሄደ ካለው የሰላም ንግግር የኢትዮጵያ ሕዝብ ተስፋ...

የሰላም ዕድሉ እንዳያመልጥ ስክነት ያስፈልጋል!

ርዕሰ አንቀጽ October 26, 2022 0

በአፍሪካ ኅብረት ጥላ ሥር በፌዴራል መንግሥትና በሕወሓት መካከል የሚደረገው...

Ethiopian Reporter Political News

Officials at the Ministry of Agriculture are worried about the global fertilizer scarcity as the nation becomes unable to endure the increase in the price of the agriculture input owing to the conflict between the Ukraine and Russia.

The global fertilizer crunch continued as the country sees a growth in demand for fertilizer due to expansion of irrigation farms and new agriculture projects that prompt farmers to increasingly shift to artificial fertilizer with subsidized price.

“Demand is growing substantially as Meher farms expand and irrigation activities surges across the country,” said Umar Hussein, the Minister of Agriculture, in an event held at Skylight Hotel to honor stakeholders who have been involved in the timely delivery and distribution of fertilizer.

Last year, the price of fertilizer more than doubled in the international market, a situation that have bulged Ethiopia’s annual budget for the commodity from USD 600 million to USD 1.2 billion.

“The last year has been very challenging due to forex shortage and security concerns that have affected distribution,” Umar said.

This week, the World Bank warned that there would a further increase in price of fertilizer, with the rapid increase in gas prices turning into an increase in the cost of the commodity.

“The challenge is meeting the immediate demand for fertilizers to support next season’s crops. Current projections suggest that Africa’s unmet demand could reach four million metric tons this year, with West Africa facing the most acute challenges this growing season,” said World Bank Group President, David Malpass, during the opening of the 77th session of the UN General Assembly (UNGA 77) on Tuesday, 13 September 2022.

Last year, the Ministry had to float a tender more than twice as suppliers failed to fulfill contracts due to the global fertilizer crisis, which was first caused by the coronavirus pandemic and then worsened by the war between Russia and Ukraine, which supply over 50 percent of inputs needed to produce urea.

“Taking a lesson from last year, we are in contact with potential suppliers to avoid delays. Invitations have been already made,” said Sophia Kassa (PhD), State Minister for Investment and Input Sector at the ministry, told The Reporter.

During the last fiscal year, almost 13 million quintals of fertilizer was supplied by Fertiglobe, one of the largest producers of the nitrogen fertilizer in the Middle East, and Morroco OCP, a renowned supplier in Ethiopia, where it is currently building a fertilizer plant in partnership with the government.

The government expended a total of 64.5 billion birr for the procurement, shipment and distribution of fertilizer last year. It accounts for 11.4 percent of the budget during the same period.

The government had to allocate another 15 billion birr in subsidy as farmers become unable to withstand the surge in price of fertilize quadrupled in the local market.

Three directives on broadcast media go operational effective this month

The Ethiopian Media Authority enacts three directives to regulate the public, community, and commercial broadcast media. They are part of the eight directives the Authority has been issuing since the ratification of the media proclamation in April 2021.

To be applicable beginning this month, the directives list the rights and responsibilities, and how licenses are granted for the public, community, and commercial broadcasting media. The directives rule on how television and radio media should conduct their reports during national occasions like elections.

Lists of administrative measures by the Authority as well as legal actions have also been stated. Beginning from warnings to suspension of licenses and legal actions, several measures would follow should the media houses engage in illegal activities.

One of the actions, as it was the practice before, was to prohibit the dissemination of a program considered to be a danger to national security before going public on any of the broadcast media.

On the issue of impounding and injunctions, article 45 of the proclamation states that prosecutors might request a court order to stop publication of the programs. In the event of an emergency, the broadcast of the programs will be called off with the order of the Ministry of Justice. This should be notified to the court of law within 48 hours.

The Authority also prepared and approved several other directives to govern the media landscape in Ethiopia. These include directives for religious broadcasting services, online media, and print media.

Following the approval of the religion broadcasting service directive, which forced the registration of religious-based media, several of them have been registered.

Among the 46 media outlets that started the process and are working with the Authority to finalize registration, 23 have received their licenses, according to Dessie Kefale, communications director at the Authority.

“There was a deadline on which all had begun the registration process. Some of them were already operational for a long time, of course,” he said.

Before the ratification of the proclamation, as Dessie explained, there had not been adequate legal frameworks for all kinds of media houses.

All the directives and regulations before last year’s proclamation were based on the Mass Media and Access to Information issued in 2008, and Broadcasting Service Proclamations issued a year before that.

“There are several other laws under discussion and preparation, which includes a directive on hate speech and misinformation,” Dessie told The Reporter.

It is the “largest pandemic fraud” in the US

Ethiopians are among 47 people who have been charged in connection with a fraud scheme in the US involving Feeding Our Future. The alleged fraud is said to be the largest pandemic fraud in the country, involving USD 250 million.

The defendants are charged across six separate indictments with charges of conspiracy, wire fraud, money laundering, and bribery. The defendants are suspected of creating dozens of shell companies to enroll in the program as Federal Child Nutrition Program sites, while allegedly creating shell companies to receive and launder the proceeds of their fraudulent scheme.

The defendants submitted false invoices purporting to document the purchase of food to be served to children at the sites and submitted fake attendance rosters purporting to list the names and ages of the children receiving meals at the sites each day, according to the US Department of Justice.

“These indictments, alleging the largest pandemic relief fraud scheme charged to date, underscore the Department of Justice’s sustained commitment to combating pandemic fraud and holding accountable those who perpetrate it,” said Attorney General Merrick B. Garland. “In partnership with agencies across the government, the Justice Department will continue to bring to justice those who have exploited the pandemic for personal gain and stolen from American taxpayers.”

Feeding Our Future’s founder and executive director, Aimee Bock, was among those indicted. She is charged with conspiracy to commit wire fraud, conspiracy to commit federal program bribery, and federal program bribery. She oversaw the USD 240 million fraud scheme carried out by sites under Feeding Our Future’s sponsorship, according to the US Department of Attorney.

An Ethiopian born Abdikerm Abdelahi Eidleh, 39, of Burnsville, Minnesota, is charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit federal program bribery, and money laundering. Eidleh was an employee of Feeding Our Future who solicited and allegedly received bribes and kickbacks from individuals and sites under the sponsorship of Feeding Our Future. Eidleh also created his own alleged fraudulent sites.

Ethiopian born-US nationals, Bekam Addissu, 39, Hadith Yusuf, 34, and Hanna Marekegn, 40, are each charged with one count of conspiracy to commit wire fraud. Another six siblings who are originally from Ethiopia have also been charged with wire fraud, federal programs bribery, conspiracy to commit money laundering, and money laundering.

Another Ethiopian-born US national, Liban Yasin Alishire, 42, the president and owner of Community Enhancement Services Inc., a company located in the JigJiga Business Center in Minneapolis, is charged with receiving more than USD 1.6 million in fraudulent Federal Child Nutrition Program funds. Ahmed Yasin and Khedir Jigre have also been charged with conspiracy to commit wire fraud and money laundering in the same center. These three defendants have been accused of buying properties, including beach property, in Kenya.

Another defendant with links to Kenya, Salim Ahmed Said, 33, of Plymouth, Minnesota, is charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit federal program bribery, federal program bribery, conspiracy to commit money laundering, and money laundering. Said was the owner and operator of Safari Restaurant, a site that received more than USD 16 million in fraudulent Federal Child Nutrition Program funds, the US Department of Justice said.

“An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law,” the department said.

A startling revelation regarding the war in northern Ethiopia was announced last week by the International Commission of Human Rights Experts on Ethiopia, an independent organization tasked by the UN Human Rights Council with conducting a thorough and impartial investigation in Ethiopia. The stern warning emerged after the organization released a study that stated there are reasonable grounds to believe that parties to the conflict had violated and/or abused human rights since combat began in November 2020.

It was a report that not only angered federal government officials but also countries and experts that had already questioned the mission and real interests of the recently formed committee of experts.

“The report of the commission is prepared in defiance of the UN best practice guidelines such as professional independence, impartiality, and standard of proof,” said Tadesse Kassa (PhD), secretariat of the inter-ministerial taskforce that was formed by Prime Minister Abiy Ahmed, slamming the UN Commission of Human Rights Experts report of human rights violations in the northern Ethiopia war.

At a press conference held on September 21, 2022, he referred to the Commission’s initial report, which was created with only two full-time human rights investigators and remote interviews, as nothing more than mediocre. At the press conference, the Ministry of Justice unveiled the task force’s first phase report, which was prepared by 158 experts deployed in the conflict-affected Amhara and Afar regions.

In its first phase investigation report, which covers violations committed by the Tigray People’s Liberation Front (TPLF), the inter-ministerial taskforce (IMTF), formed to implement the recommendations of a joint investigation by the Ethiopian Human Rights Commission (EHRC) and the UN Office of the High Commissioner for Human Rights (OHCHR), presented its findings.

The Task Force found reasonable grounds to believe the commission’s findings that there were 2212 rapes, 2831 extrajudicial executions of civilians, and other violations during the war. According to its 46-page report, the team came to this conclusion after analyzing the testimonies of 10,000 witnesses and analyzing thousands of videos and material evidence.

For Tadesse, who has been monitoring the task force’s research and report-writing process, the UN Commission of Human Rights Experts’ report on Ethiopia is only a “snippet” of the full extent of the damage that has been inflicted throughout all three regions.

“The report’s conclusions are presented on the basis of either no evidence or evidence whose credibility is highly questionable,” the secretariat told the room full of reporters questioning the report in regard to its standard of proof and data collection. Tadesse even went on to call the report “a political statement” that was prepared to “help implement” the agendas of “some forces.”

This week, the commission accused all combatants in the conflict of committing various human rights crimes. In order to reach the conclusion that there are “reasonable grounds” to suspect that the offenses amounted to war crimes and crimes against humanity, the Commission listed incidents that it employed as a basis.

The selected incidents were the shelling of Mekelle and attacks on civilians and civilian objects; killings in Kobo and Chenna; and a drone strike on an Internally Displaced Persons (IDP) camp in Dedebit. Rape and sexual violence, and denial and obstruction of humanitarian access were also selected themes for the investigation.

The commission’s two-month investigation into selected incidents and themes found “reasonable grounds” to believe the Ethiopian National Defense Force (ENDF), Tigray forces, and Eritrean Defense Force (EDF) committed war crimes, according to the report. In this case, the report accused the ENDF of using “starvation of civilians as a method of warfare.”

It further stated that it found “reasonable grounds” to believe extrajudicial killings, rapes, and sexual violence were committed by ENDF members “as part of a widespread attack” directed against “the civilian population of Tigray.”

The accusations were part of a joint investigation by the Ethiopian Human Rights Commission (EHRC) and the UN Office of the High Commissioner for Human Rights (OHCHR) that was adopted by the federal government.

The federal government, on the other hand, blasted the commission’s report, adding that it had opposed its formation from the start. It described the report as “substandard quality” and its allegations as “unsubstantiated.”

“It makes grave accusations against the government and its armed forces without offering proof, just based on telephone conversations and web-based submissions. This is irresponsible,” Zenebe Kebede (Amb.), the Permanent Representative of Ethiopia, told Federico Villegas, Human Rights Council president, at the Interactive Dialogue with the commission on September 22, 2022, in Geneva, Switzerland.

As the commission was not allowed to go to the war-affected areas of northern Ethiopia to investigate by the federal government, all the 185 interviews with victims, survivors, witnesses, and other key interlocutors were conducted remotely, it said. Even the governments of Sudan and Djibouti haven’t granted the Commission access to interview Ethiopian refugees within their borders.

Authorities in Benishangul Gumuz Region are preparing a conflict recovery project that would need a 38.5 billion birr budget to be implemented. It is an initiative that arose as the security situation improving.

The plan is expected to be implemented in five years in three phases, with execution scheduled to begin next month.

The region’s sectoral bureaus will start adapting the plan and mobilizing resources based on their needs. The region is drafting a directive that will guide resource mobilization.

The required budget for the recovery plan is nearly six times the region’s 6.7 billion birr budget for the 2022/23 fiscal year.

“Non-governmental organizations and UN agencies have already expressed their interest in supporting the initiative,” Tarekegn Tasisa, the region’s disaster risk management commissioner, said.

The recovery and rehabilitation project, based on a study prepared by the region’s disaster risk management commission, will be implemented in the region’s 17 districts in the Metekel, Kamashi, and Asosa zones. The plan outlined a list of main activities that would be carried out in six sectors, including disaster risk management, agriculture and natural resources, health protection, and education.

The study for the plan was conducted using the regional government’s root-level apparatus. They have identified the extent of the damage, and the commission compiled it, according to the Tarekegn.

Besides the study carried out by the commission, another study is also being prepared led by Assosa University. The university’s study estimated that the region sustained 79.4 billion birr damage due to the conflicts in the past years.

The conflict has resulted in the loss of 16 million quintals of crop, valued at 44 billion birr, according to the study.

“The university’s study has already been presented to the regional government, but it’s not finalized yet. That’s why we are using what we studied. Ours is already ratified by the recovery steering committee,” the commissioner said.

Officials say the security situation in the region is improving now. The number of civilians killed in the past five months is at its lowest.

The region has been a place of horrific civilian killings and conflicts between government security forces and Gumuz rebels since 2019. While the Metekel and Kamashi zones are the main fighting grounds for the rebels, Metekel zone has seen killings targeted at ethnic Amharas.

Even though the region is rich in gold and coal mining resources, investors are not able to mine the reserves, especially in the Kamashi zone. The region ranked second in the country in terms of gold production, with artisans producing more than 90 percent of the region’s gold.

475,384 residents are displaced from their villages due to the insecurity in the region, of which 77,500 are children under the age of five, and 20,000 are breastfeeding mothers, according to the conflict impact assessment. The conflict is also a reason for the destruction of 43,640 houses.

The region, which has been witnessing conflict and the killing of innocent people in various places, saw 113,000 students are out of school due to instability. The destruction of schools has created a difficult situation for students to return to school. In the conflict-affected areas of the region, 201 schools were completely destroyed and 86 schools suffered partial damage.

The region’s 142 health facilities, including 126 health posts, have also sustained damage due to conflicts.

Benishangul Gumuz, which provides agricultural land to investors who engage in large scale farms, has had its 109 agricultural institutions’ warehouses looted and partially or completely destroyed.

The study showed that 291 farmer training institutes and 140 animal health facilities met the same fate.

The recovery and rehabilitation plan has prioritized the implementation of the return of internally displaced people and the rehabilitation of those people in their former homes in a sustainable manner. It also focuses on rebuilding social and economic institutions and providing the necessary equipment for the institutions.

The project need assessment showed that 38.5 billion birr will be needed to implement the plan in disaster risk management, agriculture and natural resources, health protection, education, water irrigation and energy resource development, women, children, and youth sectors, as well as peace building and security sectors.

“The cost of the recovery budget is so much higher than the region’s capacity. But we are planning to mobilize resources from diaspora communities that are from the region,” Tarekegn stated.

Funds from donors including the federal government and the World Bank recovery project are expected to be part of this project.

The Benishangul Gumuz region is one of the six regions, including Tigray, Amhara, and Afar, where rehabilitation project was launched by the federal government together with the World Bank this year. In May 2022, the bank signed a USD 300 million grant to assist the reconstruction, and the federal government has allocated 20 billion birr in the current fiscal year for reconstruction.

In areas that have security threats, the project will be implemented by a third party. The Ministry of Finance has delegated United Nations Office for Project Services (UNOPS) to implement the reconstruction in the Tigray region.

The Ministers of Health and Education studied the damage in all six regions and prepared a report detailing the cost of the five-year reconstruction project.

The Ministry of Education stated that USD 96.5 million is needed to recover from the damage to schools in the Benishangul Gumuz region, while the Ministry of Health stated that USD 22.35 million is needed to recover from the damage in the health sector of the region.

However, the question of equitable distribution of wealth is being raised in the reconstruction project of the federal government. The Boro Democratic Party, which shared power in the region’s government, blamed the federal government for not paying enough attention to reconstruction.

In a statement issued by the party a month ago, the party urged the federal government to pay attention and allocate resources to the replanting zone in the same way that attention and resources are allocated to the destruction and displacement of citizens in northern Ethiopia.

Yohannes Tesema, the party’s Political Sector head, believes the government is not giving enough attention to the recovery as much as it gives to the Amhara and Afar regions.

He claims that out of the USD 300 million granted by the World Bank, the amount of funds allocated for the Benishangul Gumuz region is small.

It says there is no military solution to this conflict

The US Department of State called on “Eritrea and others to cease fueling” the conflict in Ethiopia and urged Eritrea to withdraw its forces from Ethiopian borders. The department accused Eritrea of increasing tensions throughout the Horn of Africa region.

The US also called on “both the Government of Ethiopia and the Tigray regional authorities to halt immediately their military offensives and pursue a negotiated settlement through peace talks under the auspices of the African Union.”

At a press briefing on September 15, 2022, Ned Price, spokesperson of the US Department of State, stated that Ethiopia should look for a non-military solution to the conflict.

“We are increasingly concerned by the growing military activity in northern Ethiopia. We strongly condemn the resumption of hostilities. There is no military solution to this conflict. These actions are inconsistent with the government of Ethiopia and Tigrayan regional authorities’ stated willingness to go to talks,” Price said.

The US special envoy to the Horn of Africa, Mike Hammer, who is in Ethiopia over the week and canceled his expected press brief on Friday, is also advancing a similar position to secure a peaceful resolution to the third wave of war that resumed in Ethiopia on August 24, 2022.

The special envoy is reportedly making efforts to bring warring parties to the table, while Olusegun Obasanjo, the designated AU official to broker peace in Ethiopia, has been silent since the third wave of war broke out.

Both optimism and worry dominated the just-ended Ethiopian year. A year that began with aspirations for wider peace and stability in the nation ended with the resumption of another deadly conflict. In a war with no apparent end in sight, thousands of people are still dying in the highlands. The economy is still in a difficult situation after recovering a little in the last Ethiopian year, on the top of the stockpiled macroeconomic problems.

It was such a challenging year. In the last year, more than the year before, the effects of the one-year-old conflict was felt. This is especially true in terms of the economy. The cost of living remains high despite recent indications that inflation is slowing down nationwide.

“The government found it difficult to contain inflation and in the third quarter of the past fiscal year started to slow down the pace of depreciation of the national currency. Maybe this contributed to stabilize the inflation rate somewhat but it may also have contributed to foreign exchange shortage in the economy,” Patrick Heinisch, an economist said.

Some conflict-affected areas are experiencing a more than 1000 percent increase in commodity prices as a result of severe supply shortages. It is still a problem in the country’s north, particularly in Agew Zone, Tigray Region, and parts of Afar Region.

“Up until the resumption of the war, I was sending money to my family living in Tigray, paying 30 birr for every 100 birr I transfer,” said Kirubel, whose last name is withheld for security reasons. “For obvious reason, this is not something normal in a country with a sound economic condition.”

Kirbuel’s story is actually the tip of the iceberg. Just two months after the previous Ethiopian year began, Ahmed Shide, the Minister of Finance, was among the first to voice concerns about the status of the economy. In the same broadcasted speech on the state broadcaster in November 2021, his comrade Yinager Dessie, the governor of the National Bank of Ethiopia (NBE), did not conceal the fact that the economy was poised to collapse because of the war.

It didn’t take long for Prime Minister Abiy Ahmed (PhD) to react. While also paving the way for a negotiated settlement with the warring party in the North, the Tigray People’s Liberation Front (TPLF), which the Parliament designated as a terrorist organization, his administration declared a humanitarian truce. Humanitarian organizations had relatively easier access to provide food supplies to people in the war-torn region.

First, some progress was made in the effort to bring about peace. The economy showed signs of improvement, and the IMF, which had previously included Ethiopia on its list of nations with unpredictable and unstable economies, predicted that it would rebound. Soon after the ceasefire in North Ethiopia, the other Bretton Woods organization, the World Bank, similarly predicted Ethiopia’s economy would revive.

Though such encouraging developments helped the government rebuild its ties with the West and western financial institutions, they did little to prevent the country’s fundamental problem—the shortage of foreign currency. From approximately USD two billion to barely USD 290.7 million in loans, development partners and lenders cut their commitments.

The net inflow of external debt was negative USD 551 million, indicating that the amount of creditor loans disbursed was less than the principal amount of debt the government was servicing.

Businesses have also faced a financial crisis due to the forex shortage, a situation that has plagued them for decades, though some found last year to be their most difficult ever.

More than any other businesses, those involved in the water bottling industry felt the pinch. Twenty water bottlers had to shut down because they were no longer able to run their businesses due to a lack of inputs, and they had even reached a point where they were unable to pay their employees’ salaries.

Overall, access to foreign currency remains challenging for businesses. At the end of 2021, foreign exchange reserves stood at USD 1.6 billion, or 1.3 months’ worth of imports of goods and services.

The authorities tightened foreign exchange regulations numerous times over the previous fiscal year in response to the shortage, upping the percentage of foreign exchange companies’ must surrendered to the government (central bank) to 70 percent. Even exporters had to deal with the shortage because the restriction prevented them from using more than 20 percent of the foreign exchange they had earned.

Another major economic burden that persisted in the country last year was the widening budget deficit, made worse by the war in the North, which increased spending for military. The budget deficit widened and is now expected to exceed 300 billion birr this year, which is more than twice what it was in the just-ended fiscal year. These difficulties compelled the government to take desperate decisions, such as freezing loans or introducing new taxes, in an effort to increase revenue and narrow the mounting deficit.

However, not every problem can be solved.

For many workers in industrial parks, the suspension of Ethiopia from the African Growth Opportunity Act (AGOA), a trade benefit granted by the US to developing countries so they may export their goods without paying an import duty, has been a bad news.

Due to significant layoffs brought on by the suspension, more than five factories have left the park, and over 5,000 workers have lost their jobs as a result.

“The year has been tough for all workers in Ethiopia. From the inflationary pressure to the war that has made many jobless, they have been in a pickle. Some had to live in poverty since their salary is not enough to cover expenses,” said Kasahun Follo, president of Confederation of Ethiopian Trade Union (CETU), urging employers to consider the challenges and make adjustments in the coming New Year.

Although the amount of jobs created by industrial parks is relatively low compared to the agricultural sector, the country had planned to industrialize. For Heinisch, these efforts are now being thwarted.

“Worryingly, since 2019 the share of the industrial sector in GDP has actually decreased. The trend is likely to have continued in the past fiscal year,” he said.

Despite the difficulties last year, industries did well.

The export of industrial items reached a record-high USD 500 million in exports during the previous fiscal year. However, this is negligible in light of the development in the coffee industry, which generated USD 1.4 billion in revenue during the previous fiscal year. It is a success that has helped officials to record the nation’s record-high exports revenue, which exceeded the USD four billion mark during the previous fiscal year.

Despite some progresses, however, the overall economic condition seems to be in worst shape, according to economists.

“We have undertaken a study and discovered that the economy is not in a stable condition, which is indicated by the unpredictability of the exchange market, the fiscal policy and the forex market, adding to global-wide problems,” said Tewodros Mekonnen (PhD), an economist and a policy analyst.

Another economist, Mengistu Ketema (Prof.), also believes the economy had not been in a good condition last year.

“Inflation was growing, above 30 percent throughout the year. External debt are maturing, thus forcing the country to allocate more budget for debt servicing. The drought in the south also worsened the already tense situation. And when you add all these to the global economic challenges, including the war in Ukraine, it indicates the economy is between a rock and a hard place,” Mengistu said.

For Heinisch, who believes Ethiopia did not experience a “post-COVID” recovery in 2021/2022 as many other countries did, the outlook is more benign, assuming that the war that has broken out again will come to an end quickly and the country can focus on its economic reforms again. “Debt restructuring could free up resources that the country needs for reconstruction but also new investment projects. So there is still reason for hope,” Heinisch concluded.

Both optimism and worry dominated the just-ended Ethiopian year. A year that began with aspirations for wider peace and stability in the nation ended with the resumption of another deadly conflict. In a war with no apparent end in sight, thousands of people are still dying in the highlands. The economy is still in a difficult situation after recovering a little in the last Ethiopian year, on the top of the stockpiled macroeconomic problems.

It was such a challenging year. In the last year, more than the year before, the effects of the one-year-old conflict was felt. This is especially true in terms of the economy. The cost of living remains high despite recent indications that inflation is slowing down nationwide.

“The government found it difficult to contain inflation and in the third quarter of the past fiscal year started to slow down the pace of depreciation of the national currency. Maybe this contributed to stabilize the inflation rate somewhat but it may also have contributed to foreign exchange shortage in the economy,” Patrick Heinisch, an economist said.

Some conflict-affected areas are experiencing a more than 1000 percent increase in commodity prices as a result of severe supply shortages. It is still a problem in the country’s north, particularly in Agew Zone, Tigray Region, and parts of Afar Region.

“Up until the resumption of the war, I was sending money to my family living in Tigray, paying 30 birr for every 100 birr I transfer,” said Kirubel, whose last name is withheld for security reasons. “For obvious reason, this is not something normal in a country with a sound economic condition.”

Kirbuel’s story is actually the tip of the iceberg. Just two months after the previous Ethiopian year began, Ahmed Shide, the Minister of Finance, was among the first to voice concerns about the status of the economy. In the same broadcasted speech on the state broadcaster in November 2021, his comrade Yinager Dessie, the governor of the National Bank of Ethiopia (NBE), did not conceal the fact that the economy was poised to collapse because of the war.

It didn’t take long for Prime Minister Abiy Ahmed (PhD) to react. While also paving the way for a negotiated settlement with the warring party in the North, the Tigray People’s Liberation Front (TPLF), which the Parliament designated as a terrorist organization, his administration declared a humanitarian truce. Humanitarian organizations had relatively easier access to provide food supplies to people in the war-torn region.

First, some progress was made in the effort to bring about peace. The economy showed signs of improvement, and the IMF, which had previously included Ethiopia on its list of nations with unpredictable and unstable economies, predicted that it would rebound. Soon after the ceasefire in North Ethiopia, the other Bretton Woods organization, the World Bank, similarly predicted Ethiopia’s economy would revive.

Though such encouraging developments helped the government rebuild its ties with the West and western financial institutions, they did little to prevent the country’s fundamental problem—the shortage of foreign currency. From approximately USD two billion to barely USD 290.7 million in loans, development partners and lenders cut their commitments.

The net inflow of external debt was negative USD 551 million, indicating that the amount of creditor loans disbursed was less than the principal amount of debt the government was servicing.

Businesses have also faced a financial crisis due to the forex shortage, a situation that has plagued them for decades, though some found last year to be their most difficult ever.

More than any other businesses, those involved in the water bottling industry felt the pinch. Twenty water bottlers had to shut down because they were no longer able to run their businesses due to a lack of inputs, and they had even reached a point where they were unable to pay their employees’ salaries.

Overall, access to foreign currency remains challenging for businesses. At the end of 2021, foreign exchange reserves stood at USD 1.6 billion, or 1.3 months’ worth of imports of goods and services.

The authorities tightened foreign exchange regulations numerous times over the previous fiscal year in response to the shortage, upping the percentage of foreign exchange companies’ must surrendered to the government (central bank) to 70 percent. Even exporters had to deal with the shortage because the restriction prevented them from using more than 20 percent of the foreign exchange they had earned.

Another major economic burden that persisted in the country last year was the widening budget deficit, made worse by the war in the North, which increased spending for military. The budget deficit widened and is now expected to exceed 300 billion birr this year, which is more than twice what it was in the just-ended fiscal year. These difficulties compelled the government to take desperate decisions, such as freezing loans or introducing new taxes, in an effort to increase revenue and narrow the mounting deficit.

However, not every problem can be solved.

For many workers in industrial parks, the suspension of Ethiopia from the African Growth Opportunity Act (AGOA), a trade benefit granted by the US to developing countries so they may export their goods without paying an import duty, has been a bad news.

Due to significant layoffs brought on by the suspension, more than five factories have left the park, and over 5,000 workers have lost their jobs as a result.

“The year has been tough for all workers in Ethiopia. From the inflationary pressure to the war that has made many jobless, they have been in a pickle. Some had to live in poverty since their salary is not enough to cover expenses,” said Kasahun Follo, president of Confederation of Ethiopian Trade Union (CETU), urging employers to consider the challenges and make adjustments in the coming New Year.

Although the amount of jobs created by industrial parks is relatively low compared to the agricultural sector, the country had planned to industrialize. For Heinisch, these efforts are now being thwarted.

“Worryingly, since 2019 the share of the industrial sector in GDP has actually decreased. The trend is likely to have continued in the past fiscal year,” he said.

Despite the difficulties last year, industries did well.

The export of industrial items reached a record-high USD 500 million in exports during the previous fiscal year. However, this is negligible in light of the development in the coffee industry, which generated USD 1.4 billion in revenue during the previous fiscal year. It is a success that has helped officials to record the nation’s record-high exports revenue, which exceeded the USD four billion mark during the previous fiscal year.

Despite some progresses, however, the overall economic condition seems to be in worst shape, according to economists.

“We have undertaken a study and discovered that the economy is not in a stable condition, which is indicated by the unpredictability of the exchange market, the fiscal policy and the forex market, adding to global-wide problems,” said Tewodros Mekonnen (PhD), an economist and a policy analyst.

Another economist, Mengistu Ketema (Prof.), also believes the economy had not been in a good condition last year.

“Inflation was growing, above 30 percent throughout the year. External debt are maturing, thus forcing the country to allocate more budget for debt servicing. The drought in the south also worsened the already tense situation. And when you add all these to the global economic challenges, including the war in Ukraine, it indicates the economy is between a rock and a hard place,” Mengistu said.

For Heinisch, who believes Ethiopia did not experience a “post-COVID” recovery in 2021/2022 as many other countries did, the outlook is more benign, assuming that the war that has broken out again will come to an end quickly and the country can focus on its economic reforms again. “Debt restructuring could free up resources that the country needs for reconstruction but also new investment projects. So there is still reason for hope,” Heinisch concluded.

The envoy is wrapping up two weeks in the Horn region.

“He remained actively engaged with the Government of Ethiopia, with the Tigray regional authorities, with the African Union, and with international partners to seek to advance an important effort to bring peace. He met on September 12 with the AU’s high representative, Obasanjo,” stated Price.

On September 16, 2022, the US embassy in Addis Ababa also stated that Hammer held productive meetings with Ethiopian government officials, civil society representatives, the African Union, and international partners.

Moussa Faki, the AUC chairperson, who extended Obasanjo’s mandate on September 10, 2022 to continue engaging with warring parties in Ethiopia, also met with Hammer on the next day. On the other hand, the UN Security Council, which was set to discuss the situation in Ethiopia, was postponed.

The five months of ceasefire and humanitarian assistance to Tigray were shattered when the third wave of war broke out on August 24, 2022. The ongoing peace initiative under the AU umbrella hit a deadlock, which the special envoy is trying to reactivate.

The Tigray regional government, which has been refuting AU-led peace negotiations prior to the latest war, also issued a statement on September 11, 2022, agreeing to negotiate under the AU umbrella.

Nonetheless, reaching a ceasefire agreement and resuming the peace talks remains farfetched, worsening the humanitarian crisis, as Eritrean forces are reportedly drawn into the war and regionalizing the conflict.

“These actions are worsening the humanitarian situation at a time of pronounced drought and food insecurity,” stated Price.

He called on the government of Ethiopia, Tigrayan authorities, and all parties to allow the unhindered delivery of humanitarian relief.

“Humanitarian assistance should not be used for military purposes—it should be used to save lives. And we urge the parties to cease the fighting and to begin talks under the auspices of the AU as soon as possible. Peace needs to be given a chance. Too many people have died, and too many more are suffering,” he added.

“Our region doesn’t have the capacity to mobilize this amount of budget for the recovery. It definitely needs the federal government’s support more than this,” he asserted.

The commission’s requests to various UN entities operating in Ethiopia to share documents and materials of interest were largely deflected, or responded to after an inordinate delay. Its request to access the internal database of the joint investigation team was also delayed.

“Despite these challenges, the Commission is confident that its findings are supported by information that satisfies the standard of proof for UN investigations,” the report reads.

The commission’s recommendation, which asks the UN Security Council (UNSC) to include the war in northern Ethiopia on its agenda for the 14th time since December 2020, worries the Ethiopian government more than the report’s findings and conclusions do.

In order to stop further violations and abuses of international human rights law and humanitarian laws, it also calls on the council to take action targeted at restoring peace, stability, and security in the area. During a session held this week, officials of the federal government have already expressed their resentment at the recommendation of the commission.

“The Commission’s political pronouncements referring to the UN Security Council are ultra-virulent and betray political motivations that go beyond human rights,” Zenebe said.

It is a sentiment shared by countries that are members of the Human Rights Council.

“The Commission went beyond its mandate and made a statement on things that were not in its remit,” said Konan François, a representative of Côte d’Ivoire on behalf of a group of African States.

Wondemagegn Tadesse (PhD), an international human rights lecturer at Addis Ababa University, believes there are three options in which the UN Human Rights Council can decide to approve the commission’s report and recommendations. The first option is to end the matter within the council itself.

“In this case, there will be nothing more to do than call on the warring parties in the country to implement these recommendations,” Wondemagegn explained.

The second option is to refer the matter to the UN General Assembly. “However, since the assembly gathers over a long period of time, it may not have a big impact on Ethiopia,” he added.

Apart from that, even if it is presented to the General Assembly, its voting system does not have veto power, so there is a high possibility that it will not be approved. A large number of developing countries at the General Assembly will not vote in favor of the resolution as they consider such decisions as interference, according to Wondemagegn. Moreover, experience so far shows that if the country in which the decision is made does not accept the decision, the chances of its implementation are low.

However, if issues are referred to the UNSC, the third option may take a different path than the two options.

“The Security Council is the only institution that has the power to take military action among the UN institutions, but as we always see, the proposal to the Council is overturned by the veto power, so it does not make a difference,” Wendmagegn asserted.

In the past two years, the council has not passed any decisions on Ethiopia. The war in northern Ethiopia and the Great Ethiopian Renaissance Dam have been on the agenda tabled before its members for discussion. When a resolution was proposed, China and Russia, who have veto power, supported Ethiopia.

For Wondemagegn, even if the Security Council passes a resolution, it is difficult to implement it. If the Council decides to send troops to stop human rights abuses, there may not be many countries to contribute troops to a country as large as Ethiopia.

“Even if countries contribute soldiers and send them to Ethiopia, they will have to fight a war with Ethiopia because the Ethiopian government will not accept the decision. No one wants this,” he said.

Another human rights expert, who asked not to be named, explained that even if the UN Human Rights Council does not pass any decision as a result of this report, countries that want to take unilateral action can use it as a cause for their measures.

“Those like the US and the EU may use the report to suspend loans and impose sanctions,” the expert said, adding, “but this would only hurt the people affected by the war more.”

The Ethiopian Human Rights Commission also agrees with this idea.

“Decisions should be made to reward the people affected by the war and bring reconciliation, not where parties with differences of opinion are dragged into a corner,” said the Deputy Chief Commissioner for Human Rights, Rakeb Melesel, while underscoring that EHRC is ready to share its database if the Commission is willing to undertake another investigation.

The Ethiopian government is exerting pressure to block any attempts by the Commission to extend its mandate. “The Council should reject the report and oppose any attempt to extend the mandate of this Commission beyond December 2022,” the government emphasized.

Farmers reject the much-anticipated Bt cotton.

Cotton growers in Ethiopia resort to unauthorized GMO cotton illegally smuggled from Sudan. Bt-RR cotton seed is currently being cultivated in Afar, Metema, Benishangul Gumuz and Gambella regions after being smuggled via Metema, Humera and other border areas between Sudan and Ethiopia.

Once the first generation of open-pollinated (OT) is acquired, it can be sown for between three and five years, after which the seed cannot be recycled. Ethiopian cotton farmers are currently buying the smuggled cotton seeds and multiplying them locally at 10,000 birr to 13,000 birr per quintal.

Bt-RR originated in Brazil, and was largely cultivated in Sudan. Most other GM cotton seeds are non-OT, which means they cannot be used after the first year. As a result, the farmer has to buy the seed every year.

The cotton farmers The Reporter talked to underlined that the smuggled cotton seed is preferred mainly because it resists bollworm, which has been devastating the existing local cotton breeds. This is because a one-time chemical spray on the vegetation is also highly effective in eliminating all weeds except the cotton itself.

The productivity of the Bt-RR is between 10 and 14 quintals per hectare, slightly superior to the local varieties. But the Bt-RR is advantageous mainly because it beats the bollworm, and requires less pesticide.

“A number of farmers are now multiplying the Bt-RR seed and selling it to cotton farmers across the country. The farmer liked the seed, instead of the local existing varieties and the GM cotton approved by the government,” said a manager of a large-scale cotton farming company. He cultivated the new seed on 200 hectares in Amhara regional state.

Melkamu Telake, board chair of the Ethiopian Cotton Producers, Ginners, and Exporters Association, says farmers are resorting to smuggled seed as access to other cotton seeds depletes. “The government failed to provide the type of seed preferred by the farmer.”

After the Parliament legislated the GMO proclamation in 2015, the Biosafety and Invasive Alien Species Follow-up and Control directorate at the Environmental Protection Authority (EPA) and EIAR commercialized Bt cotton for the first time in 2019.

However, a number of commercial cotton farmers in Gambella have tried Bt cotton and lost interest after the first year. The first reason was that the authorized Bt cotton could not effectively resist the bollworm.

The other major reason was that the authorized Bt cotton, which is imported from India, is expensive costing USD 28 per kilo. As a result, the EIAR picked Indian-based JK Agri Genetics Ltd. to open a subsidiary company in Ethiopia and multiply the seeds in Ethiopia to avoid the forex problem required to import the seeds annually. However, this plan also bore no fruit, as the Ethiopian farmers rejected the authorized Bt cotton.

“All the cotton farmers in Ethiopia are boycotting the authorized Bt cotton. It did not effectively resist the bollworm. It necessitates the repeated application of insecticides and pesticides. We have to buy the seeds every year at an expensive price. Plus, our farmers lack the technology required to cultivate the authorized Bt cotton with the right agronomical practices. So the farmers are resorting to the smuggled variety, instead,” said Melkamu.

Mesele Mekuria, Cotton Development Director at the Ethiopian Textile Industry Development Center, also said the authorized Bt cotton did not work.

The productivity of existing cotton seeds in Ethiopia, which are Ggedera and DP90, dropped, especially after the varieties were in use for over 30 years and were unable to resist diseases. Currently, rain-based farming of traditional seeds offer anywhere between eight quintals and 28 quintals per hectare.

However, if irrigation is coupled with precise agronomical practice, the local seeds can offer between 45 quintal and 54 quintals per hectare, according to Melkamu.

“Big cotton farmers like Lucy in Afar, and other farmers in Arbaminch have achieved this level of productivity. But there are certain interest groups who are trying to enforce certain Bt cotton on Ethiopia. We need GMO cotton only after we achieve maximum productivity with the existing local varieties,” Melkamu said.

These interest groups, according to him, do not want the local varieties. “Global GMO patent holders are behind these interest groups. Once we start using such GMO varieties, we will be their slaves because the existing local varieties will be ousted in five years and we have to buy their seed every year.”

Yet, other cotton farmers argue that the EIAR has to take samples of the Bt-RR that are smuggled from Sudan, study them, and approve them for Ethiopian farmers.

The meager productivity of local cotton farming has been the Achilles heel for Ethiopia’s aspirations to become the manufacturing hub of Africa, mainly capitalizing on textiles, garments, and apparel.

Damage to health and education infrastructure in six regions of Ethiopia resulting from conflicts need a USD 3.6 billion recovery budget, according to a new Recovery and Rehabilitation Plan document released by the Ministries of Health and Education.

The ministries outlined an intervention plan for the five-year rehabilitation project that will be implemented in three phases. The recovery intervention plan is part of the “Response – Recovery – Resilience” project launched by the Ministry of Finance in March 2022.

The ministries assessed the damage that occurred in Tigray, Afar, Amhara, Benishangul-Gumuz, Oromia, and Konso zones of the Southern Nations Nationalities and People’s (SNNP) regions. The assessment and recovery plan were prepared by the government, with a technical assistance from the World Bank.

Education suffered the most harm. According to the recovery plan, the sector requires USD 2.2 billion to recoup lost learning and rebuild destroyed facilities.

The Ministry of Health’s plan proposed a USD 1.4 billion intervention.

As the assessment shows, the conflict destroyed 2,681 schools completely and another 4,158 schools partially in these regions. 38 Technical and Vocational Education and Training (TVET) institutions and three universities have also sustained varying levels of damage. The number of destroyed TVETs and universities in the Tigray region is not included due to a lack of data.

This destruction of the education sector has affected more than 4.2 million learners and close to 200,000 teachers and education staff, the report reads.

The number of people affected by the damage to the health sector is estimated to be close to 24 million people. The people in conflict-affected area have been “adversely impacted.”

The assessment showed that 3,217 health posts, 709 health centers, and 76 hospitals were partially or completely damaged in the six conflict-affected regions.

Among the six regions that were affected, the Amhara region suffered the most damage to the sectors. Out of the 3,217 health facilities that sustained damage, 69 percent of them are found in the Amhara region. Furthermore, out of 248 ambulances that were damaged or looted, 50 percent were in the region.

The region’s 4,020 schools have also been destroyed, accounting for 58.7 percent of the total damage across all six areas.

However, given the region’s penetration of health institutions, the damage to health facilities in Tigray is substantially greater. 82.9 percent of the region’s hospitals have been damaged. The same fate has befallen Tigray’s 76 percent of health posts and 50 percent of health centers.

In the health sector, out of the overall estimated recovery cost, USD 1.4 billion, the largest share, USD 501.19 million, is for health centers. General and specialized hospitals follow at a cost of USD 342.54 million.

In the education sector, USD 1.36 billion is planned to recover damaged primary and secondary schools in the six regions.

The recovery and reconstruction program will be implemented for five years in three phases, according to the documents prepared by the ministries. The program’s early recovery phase needs will be met within the first six months. Short-term demands range from six to 24 months, whereas medium-term needs range from three to five years.

According to the ministry’s Stakeholder Engagement Plan document, the implementation of the program will be led by a Federal Project Coordination Unit (FPCU) in the Ministry of Finance. Various sectoral ministries and other mandated offices are responsible for the implementation of the program.

In the Tigray region, where the ministries have no access, the recovery project is planned to be implemented by a third party. The Ministry of Finance signed a third-party implementation agreement with the United Nations Office for Project Services (UNOPS) last month.

The World Bank granted USD 300 million in May for the implementation of this project. While the government, which has just begun its fiscal year, has allocated 20 billion birr.

Abiy Ahmed’s (PhD) time as Ethiopia’s prime minister is not without difficulties. He even called himself “a Prime Minister with no time to even undergo a medical checkup” in front of lawmakers. Since taking over after Hailemariam Desalegn’s departure, Abiy has ruled a nation that has been plagued by economic distress, political unrest, and even a civil war that has lasted for more than a year. On top of the never-ending problems he dealt with, with most of the incidents occurring in the northern part of the country, there was another heavy task that challenged his leadership. That is the statehood question brought by ethnic groups living in the south.

A few months after taking office, Abiy was inundated with requests from the leaders of more than a dozen zones and woredas, placing pressure on his government to help them realize their desire for a regional state. Participation in the endeavor to achieve statehood recognition ranged from low-level bureaucrats to zonal leaders and officials in the federal government. Ten zones filed a resolution with the House of Federation (HoF) adopted by their separate councils to hold a referendum on statehood. Abiy was aware right away how urgent it was to fulfill the regions’ desire.

Soon after taking office, Abiy traveled to almost all of the South Region’s ethnically divided zones. It was an attempt to win political support as he rushed to replace the Ethiopian Peoples’ Revolutionary Democratic Front (EPRDF) at the time and establish the ruling Prosperity Party. But his administration’s stance on their desire for statehood was the main topic that dominated the debates at the zones. He promised to respond to their request, which by all legal criteria is legitimate.

However, it was easier said than done to keep the pledge. Sidama was the first regional state to be established following a referendum, with 98 percent of voters supporting the establishment of a new regional state. But civilians paid a price for the government’s efforts to push through Sidama’s desire for statehood, as enraged protesters set fire to the homes of many Hawassa inhabitants and forcibly evicted many others.

In particular, ethnic Amharas were targeted in all incidents involving statehood questions across the South Region. The Attorney General recently released a report that the homes of ethnic Amharas were burned to ashes, which led to the arrest of dozens of people on suspicion of being involved in the violence.

It appears the government understood the consequences of ignoring statehood questions were brought by Ethiopians to the south. Abiy formed a team of experts and high-level government officials two years ago to launch a study on the issue after realizing the consequences of disregarding statehood requests.

The team sent out three recommendations. The first option is to maintain the South Nation, Nationalities and People’s Regional State in its present configuration while making changes to the region’s appropriate number of political seats. The second suggestion was to establish the Sidama region while keeping other ethnic groups as members of the SNNPR. The third involved splitting the region into five, clustering the ethnic groups together.

The third alternative seems to be what the federal administration chose after the first two became unworkable due to rising animosity among ethnic group elites in South Ethiopia.

“I think it’s a step in the right direction, but caution should be exercised to avoid making the same mistake as SNNPR, which is now being dismantled due to growing resentment over resource sharing, political participation, and infrastructure development,” said Keyredin Tezera, assistant professor of Social Anthropology who participated in the study carried out at the request of the federal government.

Following Sidama’s victory for independence from the SNNPR, Kaffa, Sheka, Bench Sheko, Dawuro, and West Omo Zones, as well as the Konta Special District, joined to form the South West Region through a referendum. The local council members of five special Woredas – Amaro, Ale, Basketo, Burji, and Derashe – as well as the Konso, Gedeo, Gamo, Gofa, South Omo, and Wolayta zones voted last week to restructure their administrative units into a newly established regional state.

In a similar fashion, members of the Hadiya, Halaba, Kembata Tmbaro, Silte, and Yem Special Woreda local councils have begun the process of creating a new regional state. However, activists and political organizations active in the zones contested the action.

The Gurghe people, with whom the federal government wants to construct a cluster along with Hadiya, Silte, Kembata, Silte, and Yem, are among those who have objected to the concept of forming regions in clusters. The Guraghe zone has a population of approximately six million people and a land area of approximately 5932 sq.km. Its council was one of the zones that submitted a request to hold a vote on becoming a separate region.

Social activist, Misbah Kedir, is one of the ethnic Guraghes who have contested the federal government’s proposal to partition SNNPR into five cluster areas. He thinks it is wrong for the central government to “forcefully” incorporate the Guraghe Zone into the cluster.

“In addition to Guraghes, other zones that had voted to create a cluster region had also supported the motion after receiving an order from the federal government,” said Misbah.

Wolayita’s opposition wants to be heard too.

“First and foremost, the council, whether in Wolayita or other zones, does not have the power to accept such a resolution on behalf of the people because their term period ended almost seven years ago. Second, this is something that the cadres, not the people, want,” said Amanuel Mogiso, leader of the opposition Wolayita National Movement, which is active in Wolayita Zone.

Amanuel exhorts the federal government to pay attention to what the people want, comparing the situation to sitting on a ticking time bomb. “The Wolayita people have peacefully expressed a desire for their own territory. They need to be heard,” he added.

The politician urges the federal government to avoid meddling and let ethnic communities in SNNPR, including Wolayita, exercise their constitutional rights. “To reject their right to have their own regional state is unlawful,” Amanuel continued.

Jember Abdo, a legal expert, agrees.

“The state is turning into an enabler of violence. In the case of Guraghe, this is what I saw. The people exercised their right to form a region but the federal government’s response was to militarize their hometown,” Jember said urging the federal government to uphold the constitution.

There are economic reasons driving the pursuit of statehood.

“In order to obtain a permit from SNNPR officials, farmers and businessmen must travel hundreds of kilometers from distant areas in the Guraghe zone to Hawassa. And after the cluster region is established, they might be required to follow suit in order to obtain a permit from Hossana, which will likely serve as the cluster region’s capital city,” Misbah said.

Amanuel is worried too.

“The political structure is to blame for the underdevelopment of zones. When you have a significant budget and tax in a region, it is not the same,” Amanuel concluded.

Regardless of the final outcome of the campaign to achieve statehood for Ethiopians in the South, there are still many unknowns about the future of the region, which will depend on the government’s decision on how to manage the grievances of the ethnic groups it intends to organize into a cluster region.

Sergey Lavrov, Russia’s Foreign Minister, affirmed that his country is in favor of giving Africa a permanent seat in the UN Security Council. The Foreign Minister also concurred with Ethiopian officials that the Security Council should undergo reform in a bid to take into account the current state of the world.

Lavrov arrived in Addis Ababa on July 26, 2022 for a two-day trip, where he met President Sahlework Zewde; Demeke Mekonen, deputy prime minister and foreign minister, and other high officials. Lavrov also traveled to Egypt, Congo, and Uganda, before wrapping up his Africa trip by conferring with the diplomatic community at the AU headquarters.

“Ethiopia and Russia share similar stances on issues on the global and regional agenda. These approaches rely on adherence to international law, particularly the tenets of the UN charter and the respect for the sovereign rights of states,” said Lavrov.

During the 35^th ordinary session of the AU summit in February 2022, PM Abiy Ahmed (PhD) exceptionally raised the urgent topic of reforming the UN and securing a permanent seat for Africa in the UNSC.

As a result, the AU passed a resolution that requests “full representation of Africa in the United Nations Security Council, including not less than two permanent seats in the United Nations Security Council with all the prerogatives and privileges of permanent membership, including the right of veto.

The AU also proceeded to request the Committee of Ten Heads of State and Government to continue to intensify its engagement at the highest level with other interested and regional groups and key stakeholders, including the five permanent members of the UN Security Council, with a view to building on progress made in advancing, canvassing and promoting the Common African Position.

The AU’s quest for reform of the UN began in 2005 when African states approved the Ezulwini consensus and Sirte Declaration on the Reform of United Nations Security Council.

In 2010, President Goodluck Jonathan of Nigeria, told the UN General Assembly, “The exclusion of Africa from the permanent member category of the Security Council can no longer be justified. We urge the UN to quicken the pace of its reforms. Not only to better reflect the current global realities but also to ensure that it enjoys genuine legitimacy.”

Africa does not have a proportional representation in the global body.However, the consideration has become critical, as Africa is frequently impacted by decisions over which it has no say.

In particular, both Ethiopia and Russia have been haunted by the UNSC particularly since last year. In the past year, the UNSC discussed sanctioning Ethiopia in relation to human rights violations in the Tigray war. However, the considerations were vetoed by Russia and China. Ethiopia also paid back by refraining from voting, when the UNSC introduced emergency voting in March 2022 to condemn Russia’s invasion of Ukraine.

Demeke appreciated Russia’s “unwavering support during difficult times of need, particularly in the recent struggle to safeguard Ethiopia’s sovereignty.’

The major purpose of Lavrov’s trip to Africa, amidst a propaganda war with the west, is also to secure Africa’s support in similar UN voting scenarios in the future.

Gaining a permanent seat on the UN Security Council will position Africa as a balancing force between the power struggles of the east and west, as well as the rapidly changing global geopolitics. However, reforming the western-dominated organization might not be easy, according to scholars. But once the UN begins processing the AU’s request, Russia and China can play a decisive role in making Africa earn its place in the UN structure.

Over 60,000 foreigners have registered so far

Ethiopia’s Ministry of Foreign Affairs urged foreigners with expired visas and resident permits to get registered in 125 selected areas of registration established for this purpose.

Speaking at a press conference on Thursday, Ministry Spokesperson Meles Alem (Ambassador) has urged all foreign nationals living in Ethiopia without proper documents to be registered immediately before authorities start to take legal action as per the international law Ethiopia has signed.

Foreigners without any visa or residence permit, as well as refugees or asylum seekers requesting status and residing in Addis Ababa and its vicinities with or without an urban refugee permit, are also requested to register as of July 25, 2022.

According to Meles, within the last five days of the official announcement for registration, over 60,000 people have registered from countries including Canada, America, Eritrea, Congo, Italy, Syria, China, Turkey, Ghana, Burundi, Liberia, India, Bangladesh, South Sudan, and other countries.

The first phase of registration sites is installed in Addis Ababa and some Oromia administrative zones, and the second round of registration will be opened soon in regional states and the Dire Dawa City administration, the spokesperson told the reporter.

Registration is conducted under the auspices of the Immigration and Citizenship Service, through the Vital Events Registration Offices of all Woredas and the Immigration and Citizenship Service, as per its mandate given by a proclamation to register and administer legal permits for foreign nationals living in Ethiopia.

“We have started this to make sure that immigration work is proceeding as per the legal procedures,” said Meles (Ambassador), adding that there is no further intention of expelling or any other form of stunt.

The spokesperson has further called on foreigners to take advantage of this chance before officials start to take legal measures against those who failed to register as per the rule. However, the formal registration process will not be applied to the diplomatic community.

Over 180,000 foreigners are expected to be registered in Addis Ababa, Meles added.

In a similar presser, the spokesperson announced the cancellation of 162 million US dollars of rolling debt by the Russian government, which Ethiopia has borrowed since the Soviet Union period. According to Meles, Russia has changed the modality from debt to a development grant for purposes of modernizing the Melka Wakana Hydroelectric Power Station and upgrading Balcha Hospital’s technical capabilities.

Over 60,000 foreigners have registered so far

Ethiopia’s Ministry of Foreign Affairs urged foreigners with expired visas and resident permits to get registered in 125 selected areas of registration established for this purpose.

Speaking at a press conference on Thursday, Ministry Spokesperson Meles Alem (Ambassador) has urged all foreign nationals living in Ethiopia without proper documents to be registered immediately before authorities start to take legal action as per the international law Ethiopia has signed.

Foreigners without any visa or residence permit, as well as refugees or asylum seekers requesting status and residing in Addis Ababa and its vicinities with or without an urban refugee permit, are also requested to register as of July 25, 2022.

According to Meles, within the last five days of the official announcement for registration, over 60,000 people have registered from countries including Canada, America, Eritrea, Congo, Italy, Syria, China, Turkey, Ghana, Burundi, Liberia, India, Bangladesh, South Sudan, and other countries.

The first phase of registration sites is installed in Addis Ababa and some Oromia administrative zones, and the second round of registration will be opened soon in regional states and the Dire Dawa City administration, the spokesperson told the reporter.

Registration is conducted under the auspices of the Immigration and Citizenship Service, through the Vital Events Registration Offices of all Woredas and the Immigration and Citizenship Service, as per its mandate given by a proclamation to register and administer legal permits for foreign nationals living in Ethiopia.

“We have started this to make sure that immigration work is proceeding as per the legal procedures,” said Meles (Ambassador), adding that there is no further intention of expelling or any other form of stunt.

The spokesperson has further called on foreigners to take advantage of this chance before officials start to take legal measures against those who failed to register as per the rule. However, the formal registration process will not be applied to the diplomatic community.

Over 180,000 foreigners are expected to be registered in Addis Ababa, Meles added.

In a similar presser, the spokesperson announced the cancellation of 162 million US dollars of rolling debt by the Russian government, which Ethiopia has borrowed since the Soviet Union period. According to Meles, Russia has changed the modality from debt to a development grant for purposes of modernizing the Melka Wakana Hydroelectric Power Station and upgrading Balcha Hospital’s technical capabilities.

Special Forces of Somali regional state and a coalition of other regional and federal security forces have conducted an all-out counter attack to purge Al-shabab fighters that entered Ethiopia’s borders on Friday. The regional government deployed hundreds of Special Forces to conduct the operation.

“A number of Al-shabab fighters entered the Ethiopian border, after they conducted an attack at a time nobody expected. They first engaged with Somali Special Forces. And heavy casualties occurred on both sides. But we are clearing them out,” said an official in the regional government, who spoke to The Reporter requesting to remain anonymity since the federal government is also involved and information is to be disseminated from the center.

“We have also captured their fighters, and the operation will continue until they are cleared out from the area,” added the official.

The terror group first attacked two border towns in Somalia’s side on July 20, 2022, on the same day Somali regional state officials convened to evaluate its security forces performance.

After the first clash at Yeed and Aato towns in Ethio-Somalia border, the militants reportedly killed twenty Ethiopian forces including three civilians. The group lost 63 of its own.

The al-Qaeda linked group tried to enter Ethiopia through Afder zone in southern part of Somali region.

Apart from a strong presence by Ethiopian forces in the border areas, Ethiopia also deployed close to 4,000 troops in Somalia under the AU Transition Mission in Somalia (ATMIS), a reconfigured version of the former AU Mission in Somalia (AMISOM). Ethiopian troops maintain a stronghold in Baidowa.

However insiders question why Al-shabab is attacking Ethiopia at this moment.

“The attack is intended to divert the attention of Ethiopia. Al-shabab is conducting the attacks in coordination with the TPLF and other insurgents in Ethiopia,” said a security expert who focuses on Al-shabab.

Other insiders also link the rising Al-shabab attacks with the instability in Ethiopia. The restructuring of AMISOM and controversies shadowing the continuity of ATMIS, is also contributing to Al-shabab’s resurrection.

Over the past few months, Al-shabab’s attacks have evolved from suicide bombings to attacking military bases in Somalia, including an AU military base. Experts stress that the group is gaining momentum as Horn of Africa countries are occupied with domestic conflicts and the EU, the largest financer of AMISOM/ATMIS, is backtracking.

A few weeks ago, the newly elected Somalia President, Hassan Sheikh Mohamud said negotiations should be considered with Al-shabab, a rare gesture, which is becoming almost a shadow state.

However, the militant group in a statement said it fights to establish an Islamic state in the Horn.

In a continued conflict in West Wollega Zone, over 1,105 civilians are killed this year, including 28 officials who were shot in one day. The zone has also lost properties worth over three billion birr to extended conflict during the just ended fiscal year.

Reports of the devastating impact of the conflict presented to the Caffee Oromia, council of the Oromia regional state, which held its annual meeting over the week. Gammachis Dabala, administrator of West Wollega zone, told the council that both ethnic Amhara and Oromo are killed in his zone.

The regional government has repeatedly launched operation to eradicate the Oromo Liberation Front (OLF-Shene) group, which designated terrorist by the House of Peoples Representative (HPR) and still maintaining West Oromia as its stronghold. During the last month alone, the group has killed hundreds of civilians, according to Ethiopian Human Rights Commission (EHRC) reports. PM Abiy Ahmed called it “a massacre.”

Most of the zones of Oromia are currently under threats of the insurgent group, according to official reports. Loss of life, property damages, and closure of schools are also tolling across the regional state. In North Shewa alone, some 195 schools remain closed, while over 75,000 students were out of school, according to the report presented during the Caffee meeting.

Taye Dendea, member of the Oromia Prosperity party and state minister of Peace, was at dismay after attending the Caffee meeting. “Last year, only few woredas of Oromia were affected by conflict. Currently, eight zones of Oromia have security threats. We failed the people that elected us just last year. The Oromia Regional Government failed to fulfill its duty to protect the civilians. The damage up on our people is shocking. Externalizing the problem cannot be a solution,” he wrote on Facebook after the meeting was concluded on Friday.

The state minister also harshly criticized the budget allocation of the just started 2022/23 is not enough to fight the insurgents. Nearly 400 million birr is allocated for the regional security budget, which the state minister argues should be more than one billion birr. This accounts for less than one percent of 158.6 billion birr budget approved by the Caffee.

However, the state minister did not mention shortcomings of his ministry why the insurgent group is remaining at large.

Businesses that are registered in Tigray region as a federal taxpayer but are currently located outside the region will be paying their taxes at the Northwest Branch of the Ministry of Revenue in Addis Ababa.

The federal revenue that should have been collected in the region will be collected directly by the ministry. The tax that should have been collected by the regional government will be deposited in a trust bank account.

The ministries of finance and revenue are implementing this temporary procedure because organizations and individuals registered as taxpayers in Tigray are having a difficulty to continue their business activities in other parts of the country, according to Abaynesh Abate, the ministry’s tax declaration director.

Despite their desire to continue working in their current location, the taxpayers were unable to renew their business licenses, vehicles or construction equipment.

Abaynesh said that they could not obtain loans, bid on contracts or receive other government services. “Some of them even claimed that the house they rented for their business was in trouble since their business license had not been renewed.”

More than 100 complaints from Tigray’s taxpayers have been lodged to the ministry, and the number continues to grow. The majority are taxpayers who must pay taxes to the regional government.

Abaynesh says among the complainants, ten are Tigray registered firms that are managed by Commercial Nominees and pay federal taxes.

She explained that after the ministry informed the Ministry of Finance about the complaint in April, it allowed taxpayers to get a temporary tax clearance through a temporary procedure or register as taxpayers elsewhere.

In a letter written by the Ministry of Finance to the Ministry of Revenue last month, it acknowledged the regional government’s authority to collect the tax revenue in Tigray region.

The minister cited Article 96 of the Constitution to explain saying, “Since the income collected from individual businessmen and regional public enterprises is a regional income, it is clear that it is the regional government that can levy and collect tax.”

On the other hand, the letter explains that the tax collected from private organizations located in the region is the joint income of the federal and state governments, levied and collected by the federal government. But the income collected from federal public enterprises located in the region is the income of the federal government.

Nevertheless, since both taxpayers registered in Tigray are facing difficulties to conduct their activities due to the “emerging security problem,” State Minister, Eyob Tekalegn, in a letter stated that it is necessary to establish a temporary system.

The Ministry of Revenue, which has designated the North West branch in Addis Ababa’s Lideta neighborhood, will ensure that these taxpayers receive their tax clearance.

Abaynesh added that a request has been made to the Ministry of Finance to open a trust bank account where regional taxpayer revenue will be put.

“It will be held in a trust for later transfer to the region,” she explained.

According to Abaynesh, the ministry would only collect the taxes submitted by taxpayers because there is no means to check how much the region’s taxpayers owe.

“We don’t have any information to show how much they should be paying at that point. When the situation in the region stabilizes, it will be thoroughly examined” Abaynesh elaborated.

If taxpayers want to shift their workplace to their current address after receiving their tax clearance, registrations will be completed at the preferred address.

Under typical circumstances, changing a company’s address requires amending the company’s establishment document and submitting meeting minutes. Providing permission to change address is the authority of the regional government. All these requirements are not necessary expected to be meet in the temporary procedure.

However, even though both federal and state taxpayers registered in the state will be issued a tax clearance certificate from the Ministry of Revenue, they cannot sell their property. According to the Ministry of Finance’s letter, it is impossible to verify whether they have tax debt or not in the current situation.

Berhane Mewa is not only the former president of the Ethiopian and Addis Ababa Chamber of Commerce and Sectoral Associations, but is also a lifetime patriot in Ethiopia’s private sector struggles against state domination in the economy. Before he was forced into exile eighteen years ago by the EPRDF regime, he took up the struggle to create an independent chamber system and a real private sector in Ethiopia.

An industrial chemist by profession, Berhane came back to Addis to process a pharmaceutical investment license, to the tune of USD 22 million. He already has a plastic and rubber factory, which he established before his exile to the US.

Despite positive signs in the politics arena, Berhane argues the chambers system is still far from defending the private sector’s interests and contributing to the economy. Ashenafi Endale was granted audience. Excerpts:

The Reporter: What was at the core of your struggle for the Ethiopian private sector?

Birhane Mewa: I was forced to leave Ethiopia eighteen years ago. The government at the time was not happy with struggle in the Chamber, to create a strong private sector. I had no political interests. But after I left Ethiopia, I became a member of Kestedemena and Coalition for Unity and Democracy (Kinijit) political parties in North America. I was the secretary in Kinijit’s international leadership wing.

After Kinijit’s leadership were released from prison, I went back to normal life and started working as a business consultant, and then as a project manager. Of course I traveled to Ethiopia in between to attend my wife’s funeral. But now, I came to Ethiopia to process an investment license.

We are in the process of establishing a pharmaceutical factory in Ethiopia, in cooperation with Ethiopians engaged in the pharmacy business in the US. In general, we are here following PM Abiy Ahmed’s (PhD) call to the diaspora.

What is the kind of Chamber you want to see in Ethiopia?

The Chamber was first established as ‘the Addis Ababa Traders Association,’ during the Emperor’s era. Then it was re-established as Ethiopian Traders Council. It was free and active in advising the government, until Derg completely changed that trend. Derg made memberships mandatory and all businesses had to pay a chamber membership fees after they get their licenses.

Derg also shrunk the number of board members representing the private sector in the council, from eleven to one. At that time, nine of the eleven board members were general managers of state corporations; with only Wubshet Werkalemahu was representing the private sector.

After EPRDF took power, the general managers of state corporations left the chamber. At the time, I was president of the Ethiopian Private Manufacturing Association. So I became vice president of the Chamber to close the vacuum. And when Kebour Gena left, I became president of the chamber, through competition.

The fundamental objective of the Chamber is to advise the government before it introduces polices that affect the private sector and the economy. The second is to provide services for the private sector including trainings, information and arbitration. We were successful on both. Both the Addis and Ethiopian Chambers won various international awards, including the ‘best chamber in Africa’ award.

Nonetheless, the EPRDF was working hard to create divisions amongst, Addis Ababa, regional and sectoral chambers and associations. I worked hard to cut out such divisions and create a stronger chamber. We also managed to get back the chamber’s assets taken by the government. We also managed to access 100,000 sq. m of land for the chamber, on which the Addis-Africa exhibition center is currently being established.

Where is (should be) the exact line between state and private sector roles in the economy?

In principle, the private sector is the backbone of the economy, especially in a free market system. But during the TPLF dominated EPRDF regime; the government tried to replace the private sector by state affiliated endowment companies and state owned enterprises, which are still under party control. They enjoy access to finance, bureaucratic support, information, monopoly and other privileges. This has been stunting the growth of the private sector. I am not sure whether the situation still changed. Party affiliations still control the media, not only businesses and the economy.

Besides those parastatals, there are private businesses parasitic on preferential treatments, provided from the parties. Preferential treatment is still given for businesses, in accessing land, finance, foreign currency, and other privileges. A real private sector, which is self-created and hardworking, is very limited in Ethiopia.

The parties and government affiliated private sectors, still prevail, only changing its face. If you look at past private businesses currently, it is not hard to find a party or state support.

The right private sector should be represented only by the Chamber. It should be free, with no political interests, but defend the interests of the private sector. When we say ‘private sector’, it includes the street vendor and Gulit, to the factory and bank owners. The similarity amongst them is that they have a business license, and a common interest. There are various obstacles that hinder the chamber.

Ethiopia’s future depends on the real private sector. Foreign Direct Investments are also necessary but the domestic private sector is critical in terms of self-sufficiency, sovereignty and retention of repatriation. FDI’s can leave anytime.

Even in the USA, the private sector supports either democrats or republicans. Can a real private sector exist without any affiliation with the ruling party?

If you go to Mercato, everyone works for their own interests. They are not paid by the government but they pay taxes to the government. What the government can do is improve and equalize the playing ground.

Of course the private sector in the US supports parties. The difference is corruption is legal in the US. It is called lobbying and it is not a crime. It is also regulated. But in Ethiopia, parties establish affiliated businesses and keep taking money. The biggest problem appears when the parties themselves engage in the business. This is the biggest problem in Ethiopia. Nobody knows where the money from public enterprises goes to.

Political parties must exit from businesses and the economy. In the US, individuals and businesses giving money to parties, is publicly known, and audited. The tax authority also knows it.

Do you think the existing private sector in Ethiopia can be changed into a real private sector, or should we start over?

A real private sector is not something we create. What the government should do is create conducive environment for a ‘real private sector to emerge.’ It is the demand and supply dynamism that creates a real private sector. There are shoe shiners who have become millionaires. Did the government create them? Of course the government can facilitate support, but without political affiliation.

PM Abiy’s administration rolled out privatization and liberalization initiatives in the past three years. Do you think it is sufficient to re-balance the state dominated economy previously under the EPRDF?

There are positive signs but still some individual businesses are close to the government, instead of organized business communities under the Chamber. I do not think this is good. The government must recognize, capacitate and work with the Chamber. There are improvements regarding regulatory issues and public services. But still there is a chain of corruption in the government system. It is related to power and partisanships, which is a big obstacle that must be reduced. The government has good intentions. There are various issues studied and forwarded by the chamber and sectoral associations. Things will improve if the government reacts on those issues. If it does not start punishing corruption and avoid party affiliation and preferential treatments for selected businesses, the problem will get worse. It is the government that creates a corrupt private sector.

Corruption is also unavoidable when the public servants are paid meager salaries. The government must pay public servants sufficiently. So, corruption is high not because people are bad, or the officials are greedy, but the civil servant takes corruption as supplementary revenue.

The government also drafted a new proclamation to re-establish the Chamber. The draft proposes membership as mandatory, among others. How can a strong chamber be established? Recently, two chamber officials also defected to the US. Why is there always an internal feud inside the chambers structure?

There is a structural problem in the Chamber. It is intentionally created. Making memberships mandatory generates revenue for the chamber. But it hinders the chambers from providing quality service for their members. This was seen during the Derg regime. Immediately after the EPRDF came, it worked hard to weaken all institutions, including the chamber, teachers association, and others. The EPRDF made memberships willingly, to shrink the chamber’s revenue and finally close the chamber due to a lack of fund. But we managed to survive, by improving services and generating revenue from creative works.

Especially, the Addis Ababa Chamber became stronger, at the time, while there were some problems in the Ethiopian Chamber of Commerce. When I was about to leave, there were efforts to change the Chamber’s laws and the government wanted to re-design the Chamber, to fit to the politics.

The Chamber serves wherever there are private businesses, not government structures or political leaderships. But the government shadowed and dominated cities’ chambers, by chambers of regional states. These regional state chambers are under the control of party officials. The Ethiopian chamber also fell under the influence of party members. We tried to avoid those influences and somehow succeeded to maintain a Chamber that represents only the interest of businesses.

The proclamation tried to further divide the chamber across sectors, on top of the regional structure, dissecting the interest of the private sector. Kiosk and garage owners have different interests, but also have common interests. These specific interests should be solved under sectoral associations, and their common interest under the chamber. But what the government did is bundle the sectoral associations and the Chamber together. Businesses with different interests sat on the same table, and failed to agree. So, there is still a structural problem.

I have seen the new draft proclamation too. We are unfortunate the draft did not address the problem still. The chambers and the business community still did not reach a consensus on the draft. The Addis Ababa and Ethiopian chambers are in agreement and sectoral associations have also their won perspectives.

Chambers should work only on general issues that represent the common interests of all businesses and the economy at large, aided by sectoral associations formed separately, representing interests of businesses in specific sectors. Thus, the chamber and sectoral associations should be established separately. I do not know the status of the draft proclamation currently, but if it is ratified, it would take another generation to amend.

So, do you believe the Ethiopian chamber should be the all-encompassing strong umbrella?

Not necessarily. My point is the chamber system should be separate from sectoral associations. Whether at local, cities or a national level, chamber must be strong. But they must align. The issue of sectoral associations is completely different. For instance, leather industries have problems that can be solved both through the chamber, and their association platforms. This is the right way.

For instance, there was the Ethiopian Manufacturing Industries Association. It was challenging the government regarding manufacturer’s interests. Its strong momentum even empowered the chamber. Then the EPRDF practically dismantled it. It even prohibited the association from renting an office. The EPRDF regime never wanted such strong associations and chambers. The reason why the government overlapped chambers and sectoral associations is to deny them on common grounds.

If the draft is ratified, it only maintains the problem. Currently, the government’s system prefers individual businesses, than the organized private sector.

So the draft should be revised and discussed again?

The process of crafting the proclamation has problems from its very inception. The chamber members and business communities have no consensus on the draft. The Ethiopian, Addis Ababa, and regional chambers must sit down and discuss on the issue.

The Ethiopian government is trying to allure investments by the diaspora. If the diaspora invest and save in US banks, or in Ethiopia, which return on investment is attractive? Or do you think the government should design incentive packages for the diaspora?

Businesses in Ethiopia are more profitable than other countries. The reason the US government devised AGOA from the beginning, is because African businesses can be profitable. Even in terms of savings, the return in Ethiopia is higher than Europe or elsewhere. The problem in Ethiopia is not on returns, but convertibility. Repatriation might be difficult. Saving in Ethiopia by itself is profitable, let alone investment. There are so many profitable business sectors in Ethiopia. Many sectors are emerging, and not exploited yet.

The other problem is that the Ethiopian diaspora has lost trust in the government back home. So, the current government must reverse that perception, through transparency, commitment and service efficiency.

Thirdly, the diaspora needs information supply on feasible businesses and projects in Ethiopia. Then the diaspora can form share companies, joint ventures, PLC’s or other investment modalities. If the diaspora know feasible businesses and the laws, then they can invest. Currently, the diaspora is placing their money on the stock market and other businesses abroad. They can divert that money to go back home.

Especially, the profitability in the financial industry in Ethiopia is very lucrative; but the government should facilitate currency convertibility. Plus, most diaspora’s in Europe and the US left Ethiopia three to four decades ago. They are at s retirement age now. So if the health system in Ethiopia is improved, most diaspora’s would prefer to go back to Ethiopia.

The diaspora also wants transparent systems to complain in cases of corruption and bad services. There is corruption in Europe and the US. But it is political corruption not work corruption. Political corruption is trying to twist or influence introduction of policies, proclamations or directives. Work corruption is bribing officials, institutions, and public services. There must be a complaint window for this.

The west has been shifting away from Ethiopia and imposed sanctions. Substantial number of Ethiopians vote, especially in the US. Can Ethiopians and black Africans use their voting power to discard unfavorable officials or parties in the US or influence to reverse such sanctions?

The diplomatic system has a more crucial role in this. To be specific, the US faced unprecedented situation in Ethiopia. A government that refuses foreign pressure emerged in Ethiopia.

The US even used the UNSC to pressurize Ethiopia, meeting twelve times within six months. On top of the strong refusal of the Ethiopian government to surrender, the #nomore movement strengthened the support for Ethiopia, rallying Africans behind Ethiopia. The movement is stronger than election powers. The movement eroded US’s credibility in Africa, and in the world.

Even during calls that Addis Ababa will fall to the hands of insurgents, one million diaspora opted to come back home. I believe Ethiopia will regain its rightful place in the international stage.

Unlike any time before, the diaspora is on the same page now, regarding national issues. Before this, the diaspora’s were highly divided and turned against each other. The division created a negative energy. If the diaspora was united before, the EPRDF could have been long gone. The Diaspora and opposition figures abroad were used to strife, not unity.

Can we say that the US’s pressure is normalizing since the tension with China over the horn escalated?

Their strategy differs. The US wants to ensure its interests through political influence, while China does it through investment and economic empowering. The US’s and China’s struggles will continue, whether Ethiopia is there or not. China, Russia, Turkey, Iran and India, to some degree, are joining the friction now. They have certain interests with or against the US.

The US’s fear is not what China will do in Ethiopia, but the kind of measures Ethiopia takes. For instance, Ethiopia’s normalization with Eritrea and the alliance with Somalia is a threat for the US. When the US told Ethiopia to stop the war, Ethiopia rather turned a deaf ear. Ethiopia filled the renaissance dam, when the US opposed it. These are some of the bold moves against US interests.

These moves have nothing to do with China, but they are decisions emanating from the nature of Ethiopians. So, the confrontation between the US and China continues, while Ethiopia strides to protect and implement its national interests fully.

I do not think Ethiopia will completely shift its diplomatic ties towards China. Imperialism is always imperialism, but it changes its face. The US always wants a government that listens to them. If a government refuses to carry out their interest, they depose that government, including assassinations. In cases such as Libya, Iraq and Syria, the US’s footprints in the countries politics can be seen from afar.

The US put the same type of pressures that worked before, and in Ethiopia’s case, it has failed. But the pressure will continue. Ethiopia has passed a major obstacle. Yet, Ethiopia needs to sharpen its diplomacy more.

At what stage is your investment process currently? What are your future plans?

We are establishing the pharmaceutical factory in Ethiopia, in collaboration with highly professional pharmacists, scientists and business people in the Ethiopian diaspora. Finance, knowledge and vision are required to establish a medicine factory. If you have capital, you can buy knowledge, since it is a commodity.

Our vision is to manufacture medicine and medical equipment’s in Ethiopia and provide for Ethiopians. It is not even about profits. We wanted to improve the medicine supply shortages in Ethiopia.

We have been preparing for the past two years. We came to invest in Ethiopia, amidst the rhetoric that Addis Ababa is about to fall. Our team strongly believes in Ethiopia. Currently, we are processing the investment license.

How much is the investment?

The initial investment will take us between USD 20 million to USD 22 million.

What is your conclusion on the soundness of the Ethiopian economy, especially in post-pandemic and post-conflict endeavors?

My first impression when I came to Ethiopia after almost two decades was that all the negative narratives about Ethiopia and Addis Ababa are wrong. There is still an active economy. Across streets of Addis Ababa, day and night, residents are scrambling to buy from street vendors. This indicates to a huge demand in the economy. This is a living economy.

But it does not mean there are no problems in the economy. There is a forex shortage, industrial inputs shortages, logistics problems and others. Yet, the economy has a big potential, especially if public services are improved, corruption is eliminated and bureaucracy is improved.

Do you think the government should maintain protectionism?

The US and Europe are not afraid of protectionism. Why should Ethiopia be afraid of it? Ethiopia is eager to join the WTO. But Europe is still protecting its agriculture. The US is prohibiting import of wood, aluminum and other items, especially trump did everything to protect local industries. So, Ethiopia must also protect its industries.

After America banned Ethiopia from the AGOA, US companies left the Hawassa industrial park. If it is a local factory, they would not do so.

Before, the US’s private sector had no national interest, instead they go for profits. That is why US industries moved factories to China, in search of a cheap labor. But now, the US government is asking them to come back and create jobs in the US.

The country needs a nationalist private sector. The private sector cannot just seek profits and become a pure capitalist. It must contribute to the social wellbeing and development of the country.

Even FDI’s must be undertaken in a joint venture scheme. If it has a local element, the investment can be sustainable.

How can one balance profit seeking versus national interests? Scholars also say the psychological make-up of Ethiopians is not compatible for capitalism.

Corporate governance, labor unions and social responsibility can balance capitalism. National security should be a concern of the private sector. If there is no security, there is no transport, meaning there is no market. Drought should concern the private sector. These make the private sector become a nationalist by default.

One of the major tasks of the Chamber is to make businesses discharge their social responsibility.

Thus, your conclusion is capitalism can work in Ethiopia.

The old way of capitalism, which is seeking only profits, does not exist anymore. Of course, you are responsible for your shareholders and board members. At the same time, you have to be responsible to the society.

Why you are not investing in the banking sector rather than pharmaceuticals?

The government said it opened the banking sector for the diaspora, but still, there are unsettled problems. It said the diaspora had to invest in foreign currency. This is an obstacle.

But the major reason I joined the pharmaceutical project, is because it is a matter of professionalism. Manufacturing is difficult in Ethiopia. We have a big purpose to bring change in the medical supply shortage in Ethiopia. We will produce capsules and tablets. We will also export, once we address the domestic demand. The company will also establish an R&D wing, which will conduct studies for other firms. Most of the founders are also researchers.

Are you a chemical engineer by profession?

I studied chemistry. I also studied industrial chemistry at Bahir Dar polytechnic. I already have a factory in Ethiopia, which produces plastic and rubber. It is expanding now.

Berhane Mewa is not only the former president of the Ethiopian and Addis Ababa Chamber of Commerce and Sectoral Associations, but is also a lifetime patriot in Ethiopia’s private sector struggles against state domination in the economy. Before he was forced into exile eighteen years ago by the EPRDF regime, he took up the struggle to create an independent chamber system and a real private sector in Ethiopia.

An industrial chemist by profession, Berhane came back to Addis to process a pharmaceutical investment license, to the tune of USD 22 million. He already has a plastic and rubber factory, which he established before his exile to the US.

Despite positive signs in the politics arena, Berhane argues the chambers system is still far from defending the private sector’s interests and contributing to the economy. Ashenafi Endale was granted audience. Excerpts:

The Reporter: What was at the core of your struggle for the Ethiopian private sector?

Birhane Mewa: I was forced to leave Ethiopia eighteen years ago. The government at the time was not happy with struggle in the Chamber, to create a strong private sector. I had no political interests. But after I left Ethiopia, I became a member of Kestedemena and Coalition for Unity and Democracy (Kinijit) political parties in North America. I was the secretary in Kinijit’s international leadership wing.

After Kinijit’s leadership were released from prison, I went back to normal life and started working as a business consultant, and then as a project manager. Of course I traveled to Ethiopia in between to attend my wife’s funeral. But now, I came to Ethiopia to process an investment license.

We are in the process of establishing a pharmaceutical factory in Ethiopia, in cooperation with Ethiopians engaged in the pharmacy business in the US. In general, we are here following PM Abiy Ahmed’s (PhD) call to the diaspora.

What is the kind of Chamber you want to see in Ethiopia?

The Chamber was first established as ‘the Addis Ababa Traders Association,’ during the Emperor’s era. Then it was re-established as Ethiopian Traders Council. It was free and active in advising the government, until Derg completely changed that trend. Derg made memberships mandatory and all businesses had to pay a chamber membership fees after they get their licenses.

Derg also shrunk the number of board members representing the private sector in the council, from eleven to one. At that time, nine of the eleven board members were general managers of state corporations; with only Wubshet Werkalemahu was representing the private sector.

After EPRDF took power, the general managers of state corporations left the chamber. At the time, I was president of the Ethiopian Private Manufacturing Association. So I became vice president of the Chamber to close the vacuum. And when Kebour Gena left, I became president of the chamber, through competition.

The fundamental objective of the Chamber is to advise the government before it introduces polices that affect the private sector and the economy. The second is to provide services for the private sector including trainings, information and arbitration. We were successful on both. Both the Addis and Ethiopian Chambers won various international awards, including the ‘best chamber in Africa’ award.

Nonetheless, the EPRDF was working hard to create divisions amongst, Addis Ababa, regional and sectoral chambers and associations. I worked hard to cut out such divisions and create a stronger chamber. We also managed to get back the chamber’s assets taken by the government. We also managed to access 100,000 sq. m of land for the chamber, on which the Addis-Africa exhibition center is currently being established.

Where is (should be) the exact line between state and private sector roles in the economy?

In principle, the private sector is the backbone of the economy, especially in a free market system. But during the TPLF dominated EPRDF regime; the government tried to replace the private sector by state affiliated endowment companies and state owned enterprises, which are still under party control. They enjoy access to finance, bureaucratic support, information, monopoly and other privileges. This has been stunting the growth of the private sector. I am not sure whether the situation still changed. Party affiliations still control the media, not only businesses and the economy.

Besides those parastatals, there are private businesses parasitic on preferential treatments, provided from the parties. Preferential treatment is still given for businesses, in accessing land, finance, foreign currency, and other privileges. A real private sector, which is self-created and hardworking, is very limited in Ethiopia.

The parties and government affiliated private sectors, still prevail, only changing its face. If you look at past private businesses currently, it is not hard to find a party or state support.

The right private sector should be represented only by the Chamber. It should be free, with no political interests, but defend the interests of the private sector. When we say ‘private sector’, it includes the street vendor and Gulit, to the factory and bank owners. The similarity amongst them is that they have a business license, and a common interest. There are various obstacles that hinder the chamber.

Ethiopia’s future depends on the real private sector. Foreign Direct Investments are also necessary but the domestic private sector is critical in terms of self-sufficiency, sovereignty and retention of repatriation. FDI’s can leave anytime.

Even in the USA, the private sector supports either democrats or republicans. Can a real private sector exist without any affiliation with the ruling party?

If you go to Mercato, everyone works for their own interests. They are not paid by the government but they pay taxes to the government. What the government can do is improve and equalize the playing ground.

Of course the private sector in the US supports parties. The difference is corruption is legal in the US. It is called lobbying and it is not a crime. It is also regulated. But in Ethiopia, parties establish affiliated businesses and keep taking money. The biggest problem appears when the parties themselves engage in the business. This is the biggest problem in Ethiopia. Nobody knows where the money from public enterprises goes to.

Political parties must exit from businesses and the economy. In the US, individuals and businesses giving money to parties, is publicly known, and audited. The tax authority also knows it.

Do you think the existing private sector in Ethiopia can be changed into a real private sector, or should we start over?

A real private sector is not something we create. What the government should do is create conducive environment for a ‘real private sector to emerge.’ It is the demand and supply dynamism that creates a real private sector. There are shoe shiners who have become millionaires. Did the government create them? Of course the government can facilitate support, but without political affiliation.

PM Abiy’s administration rolled out privatization and liberalization initiatives in the past three years. Do you think it is sufficient to re-balance the state dominated economy previously under the EPRDF?

There are positive signs but still some individual businesses are close to the government, instead of organized business communities under the Chamber. I do not think this is good. The government must recognize, capacitate and work with the Chamber. There are improvements regarding regulatory issues and public services. But still there is a chain of corruption in the government system. It is related to power and partisanships, which is a big obstacle that must be reduced. The government has good intentions. There are various issues studied and forwarded by the chamber and sectoral associations. Things will improve if the government reacts on those issues. If it does not start punishing corruption and avoid party affiliation and preferential treatments for selected businesses, the problem will get worse. It is the government that creates a corrupt private sector.

Corruption is also unavoidable when the public servants are paid meager salaries. The government must pay public servants sufficiently. So, corruption is high not because people are bad, or the officials are greedy, but the civil servant takes corruption as supplementary revenue.

The government also drafted a new proclamation to re-establish the Chamber. The draft proposes membership as mandatory, among others. How can a strong chamber be established? Recently, two chamber officials also defected to the US. Why is there always an internal feud inside the chambers structure?

There is a structural problem in the Chamber. It is intentionally created. Making memberships mandatory generates revenue for the chamber. But it hinders the chambers from providing quality service for their members. This was seen during the Derg regime. Immediately after the EPRDF came, it worked hard to weaken all institutions, including the chamber, teachers association, and others. The EPRDF made memberships willingly, to shrink the chamber’s revenue and finally close the chamber due to a lack of fund. But we managed to survive, by improving services and generating revenue from creative works.

Especially, the Addis Ababa Chamber became stronger, at the time, while there were some problems in the Ethiopian Chamber of Commerce. When I was about to leave, there were efforts to change the Chamber’s laws and the government wanted to re-design the Chamber, to fit to the politics.

The Chamber serves wherever there are private businesses, not government structures or political leaderships. But the government shadowed and dominated cities’ chambers, by chambers of regional states. These regional state chambers are under the control of party officials. The Ethiopian chamber also fell under the influence of party members. We tried to avoid those influences and somehow succeeded to maintain a Chamber that represents only the interest of businesses.

The proclamation tried to further divide the chamber across sectors, on top of the regional structure, dissecting the interest of the private sector. Kiosk and garage owners have different interests, but also have common interests. These specific interests should be solved under sectoral associations, and their common interest under the chamber. But what the government did is bundle the sectoral associations and the Chamber together. Businesses with different interests sat on the same table, and failed to agree. So, there is still a structural problem.

I have seen the new draft proclamation too. We are unfortunate the draft did not address the problem still. The chambers and the business community still did not reach a consensus on the draft. The Addis Ababa and Ethiopian chambers are in agreement and sectoral associations have also their won perspectives.

Chambers should work only on general issues that represent the common interests of all businesses and the economy at large, aided by sectoral associations formed separately, representing interests of businesses in specific sectors. Thus, the chamber and sectoral associations should be established separately. I do not know the status of the draft proclamation currently, but if it is ratified, it would take another generation to amend.

So, do you believe the Ethiopian chamber should be the all-encompassing strong umbrella?

Not necessarily. My point is the chamber system should be separate from sectoral associations. Whether at local, cities or a national level, chamber must be strong. But they must align. The issue of sectoral associations is completely different. For instance, leather industries have problems that can be solved both through the chamber, and their association platforms. This is the right way.

For instance, there was the Ethiopian Manufacturing Industries Association. It was challenging the government regarding manufacturer’s interests. Its strong momentum even empowered the chamber. Then the EPRDF practically dismantled it. It even prohibited the association from renting an office. The EPRDF regime never wanted such strong associations and chambers. The reason why the government overlapped chambers and sectoral associations is to deny them on common grounds.

If the draft is ratified, it only maintains the problem. Currently, the government’s system prefers individual businesses, than the organized private sector.

So the draft should be revised and discussed again?

The process of crafting the proclamation has problems from its very inception. The chamber members and business communities have no consensus on the draft. The Ethiopian, Addis Ababa, and regional chambers must sit down and discuss on the issue.

The Ethiopian government is trying to allure investments by the diaspora. If the diaspora invest and save in US banks, or in Ethiopia, which return on investment is attractive? Or do you think the government should design incentive packages for the diaspora?

Businesses in Ethiopia are more profitable than other countries. The reason the US government devised AGOA from the beginning, is because African businesses can be profitable. Even in terms of savings, the return in Ethiopia is higher than Europe or elsewhere. The problem in Ethiopia is not on returns, but convertibility. Repatriation might be difficult. Saving in Ethiopia by itself is profitable, let alone investment. There are so many profitable business sectors in Ethiopia. Many sectors are emerging, and not exploited yet.

The other problem is that the Ethiopian diaspora has lost trust in the government back home. So, the current government must reverse that perception, through transparency, commitment and service efficiency.

Thirdly, the diaspora needs information supply on feasible businesses and projects in Ethiopia. Then the diaspora can form share companies, joint ventures, PLC’s or other investment modalities. If the diaspora know feasible businesses and the laws, then they can invest. Currently, the diaspora is placing their money on the stock market and other businesses abroad. They can divert that money to go back home.

Especially, the profitability in the financial industry in Ethiopia is very lucrative; but the government should facilitate currency convertibility. Plus, most diaspora’s in Europe and the US left Ethiopia three to four decades ago. They are at s retirement age now. So if the health system in Ethiopia is improved, most diaspora’s would prefer to go back to Ethiopia.

The diaspora also wants transparent systems to complain in cases of corruption and bad services. There is corruption in Europe and the US. But it is political corruption not work corruption. Political corruption is trying to twist or influence introduction of policies, proclamations or directives. Work corruption is bribing officials, institutions, and public services. There must be a complaint window for this.

The west has been shifting away from Ethiopia and imposed sanctions. Substantial number of Ethiopians vote, especially in the US. Can Ethiopians and black Africans use their voting power to discard unfavorable officials or parties in the US or influence to reverse such sanctions?

The diplomatic system has a more crucial role in this. To be specific, the US faced unprecedented situation in Ethiopia. A government that refuses foreign pressure emerged in Ethiopia.

The US even used the UNSC to pressurize Ethiopia, meeting twelve times within six months. On top of the strong refusal of the Ethiopian government to surrender, the #nomore movement strengthened the support for Ethiopia, rallying Africans behind Ethiopia. The movement is stronger than election powers. The movement eroded US’s credibility in Africa, and in the world.

Even during calls that Addis Ababa will fall to the hands of insurgents, one million diaspora opted to come back home. I believe Ethiopia will regain its rightful place in the international stage.

Unlike any time before, the diaspora is on the same page now, regarding national issues. Before this, the diaspora’s were highly divided and turned against each other. The division created a negative energy. If the diaspora was united before, the EPRDF could have been long gone. The Diaspora and opposition figures abroad were used to strife, not unity.

Can we say that the US’s pressure is normalizing since the tension with China over the horn escalated?

Their strategy differs. The US wants to ensure its interests through political influence, while China does it through investment and economic empowering. The US’s and China’s struggles will continue, whether Ethiopia is there or not. China, Russia, Turkey, Iran and India, to some degree, are joining the friction now. They have certain interests with or against the US.

The US’s fear is not what China will do in Ethiopia, but the kind of measures Ethiopia takes. For instance, Ethiopia’s normalization with Eritrea and the alliance with Somalia is a threat for the US. When the US told Ethiopia to stop the war, Ethiopia rather turned a deaf ear. Ethiopia filled the renaissance dam, when the US opposed it. These are some of the bold moves against US interests.

These moves have nothing to do with China, but they are decisions emanating from the nature of Ethiopians. So, the confrontation between the US and China continues, while Ethiopia strides to protect and implement its national interests fully.

I do not think Ethiopia will completely shift its diplomatic ties towards China. Imperialism is always imperialism, but it changes its face. The US always wants a government that listens to them. If a government refuses to carry out their interest, they depose that government, including assassinations. In cases such as Libya, Iraq and Syria, the US’s footprints in the countries politics can be seen from afar.

The US put the same type of pressures that worked before, and in Ethiopia’s case, it has failed. But the pressure will continue. Ethiopia has passed a major obstacle. Yet, Ethiopia needs to sharpen its diplomacy more.

At what stage is your investment process currently? What are your future plans?

We are establishing the pharmaceutical factory in Ethiopia, in collaboration with highly professional pharmacists, scientists and business people in the Ethiopian diaspora. Finance, knowledge and vision are required to establish a medicine factory. If you have capital, you can buy knowledge, since it is a commodity.

Our vision is to manufacture medicine and medical equipment’s in Ethiopia and provide for Ethiopians. It is not even about profits. We wanted to improve the medicine supply shortages in Ethiopia.

We have been preparing for the past two years. We came to invest in Ethiopia, amidst the rhetoric that Addis Ababa is about to fall. Our team strongly believes in Ethiopia. Currently, we are processing the investment license.

How much is the investment?

The initial investment will take us between USD 20 million to USD 22 million.

What is your conclusion on the soundness of the Ethiopian economy, especially in post-pandemic and post-conflict endeavors?

My first impression when I came to Ethiopia after almost two decades was that all the negative narratives about Ethiopia and Addis Ababa are wrong. There is still an active economy. Across streets of Addis Ababa, day and night, residents are scrambling to buy from street vendors. This indicates to a huge demand in the economy. This is a living economy.

But it does not mean there are no problems in the economy. There is a forex shortage, industrial inputs shortages, logistics problems and others. Yet, the economy has a big potential, especially if public services are improved, corruption is eliminated and bureaucracy is improved.

Do you think the government should maintain protectionism?

The US and Europe are not afraid of protectionism. Why should Ethiopia be afraid of it? Ethiopia is eager to join the WTO. But Europe is still protecting its agriculture. The US is prohibiting import of wood, aluminum and other items, especially trump did everything to protect local industries. So, Ethiopia must also protect its industries.

After America banned Ethiopia from the AGOA, US companies left the Hawassa industrial park. If it is a local factory, they would not do so.

Before, the US’s private sector had no national interest, instead they go for profits. That is why US industries moved factories to China, in search of a cheap labor. But now, the US government is asking them to come back and create jobs in the US.

The country needs a nationalist private sector. The private sector cannot just seek profits and become a pure capitalist. It must contribute to the social wellbeing and development of the country.

Even FDI’s must be undertaken in a joint venture scheme. If it has a local element, the investment can be sustainable.

How can one balance profit seeking versus national interests? Scholars also say the psychological make-up of Ethiopians is not compatible for capitalism.

Corporate governance, labor unions and social responsibility can balance capitalism. National security should be a concern of the private sector. If there is no security, there is no transport, meaning there is no market. Drought should concern the private sector. These make the private sector become a nationalist by default.

One of the major tasks of the Chamber is to make businesses discharge their social responsibility.

Thus, your conclusion is capitalism can work in Ethiopia.

The old way of capitalism, which is seeking only profits, does not exist anymore. Of course, you are responsible for your shareholders and board members. At the same time, you have to be responsible to the society.

Why you are not investing in the banking sector rather than pharmaceuticals?

The government said it opened the banking sector for the diaspora, but still, there are unsettled problems. It said the diaspora had to invest in foreign currency. This is an obstacle.

But the major reason I joined the pharmaceutical project, is because it is a matter of professionalism. Manufacturing is difficult in Ethiopia. We have a big purpose to bring change in the medical supply shortage in Ethiopia. We will produce capsules and tablets. We will also export, once we address the domestic demand. The company will also establish an R&D wing, which will conduct studies for other firms. Most of the founders are also researchers.

Are you a chemical engineer by profession?

I studied chemistry. I also studied industrial chemistry at Bahir Dar polytechnic. I already have a factory in Ethiopia, which produces plastic and rubber. It is expanding now.

Aklilu Wubet is a veteran in the banking industry. He joined Wegagen Bank on March 2020 as the Vice President of Corporate Service, having served in different capacities in many financial companies, including the Commercial Bank of Ethiopia, in the last 25 years. He was also the deputy CEO of Nile Insurance, Bank of Abyssinia and Lion Bank, and also served as a lecturer at Addis Ababa University.

The Reporter’s Samson Berhane sat down with Aklilu to reflect on his journey at Wegagen and the challenges ahead, as the acting president attempts to bring the bank back to its usual top status it has held for the last two decades. Excerpts:

The Reporter: You have joined Wegagen during a challenging time, when it faces decline in revenue from different sources particularly due to the tense political situation in the country. How are things going since you joined the Bank?

Aklilu Wubet: Banking is always challenging, especially in a world where resources are limited. And leadership is critical during a challenging time. Leading a company during its challenging moments is a great task and makes me happy. Especially, if you have strong team, challenge is a good thing. One thing you should also understand is that Wegagen is still a very strong bank, despite the challenges it has faced.

When I decided to join the Bank, I was confident that I would overcome all the challenges by working with a strong management and team the Bank has. The conflict has impacted all commercial banks. Peace is very important for the industry than any segment of the economy since banks deal with liquid resources. The impacts of the war, in particular, were severe on us because we are among the financial institutions with large number of branches in the areas affected by conflict.

When I joined Wegagen, my priority was to help the Bank withstand the impacts of the war. That requires being prudent and to closely work with regulatory bodies, investors and other stakeholders.

In the last 25 years, Wegagen was among the most profitable financial institutions in Ethiopia. Why was it not solid enough to withstand the shock brought on by the war in Northern Ethiopia?

To begin with, the Bank has been effective in withstanding the impacts of the war. Even though the profit is low, and has declined drastically, it is still profitable. It still has a large customer base and a huge amount of assets. Thanks to the strong base, which the bank is built on; it has been successfully coping with the conflict, even though more than a third of its branches are closed.

The profitability of the Bank in the last two decades has helped it build its asset base, enabling it to withstand the impacts of the war. The rules of the central bank and its strong regulations have had its contribution in enabling us to remain strong in such a challenging period.

The strong expense management that we have applied and the strong marketing system implemented by our management team has also contributed to the success of the Bank. If it was not due to such factors, the history of the Bank would have been ruined. But thanks to our efforts, we have defied the prediction made by some, who have forecasted that we will face a loss due to the war. But we are still in a good shape.

We have devised a strategy and are also undergoing restructuring, and increasing the number of vice presidents we have. We are still among the big players in the industry, hiring elite bankers.

According to industry insiders, the bottom line in the banking industry is profits and shareholders’ return. How did you come to the conclusion that the Bank is in a good shape, while its profit dwindled from one billion birr to 193 million birr?

Business is not only about making profits. Business is about being sustainable and staying competitive in an industry. The conflicts, coupled with macroeconomic challenges, have impacted the banking industry last year and banks would have profited much higher than they did, if there was peace.

Wegagen has declared a positive profit, while much of its branches are closed, and at a period when it was not able to collect loans given to businesses operating in war-affected areas. We even held a provision in case of loan defaults. We did not use a penny from the capital invested by shareholders, despite being in the midst of series of challenges. Overall, our objective was to make Wegagen the bank of all Ethiopians, by making it solid. I believe we have been successful in doing that.

There are critics that say Wegagen is a victim of an undiversified ownership structure which exists in the banking industry. Even though Wegagen is not the only financial institution established based on affiliation or along ethnic lines, some say its recent underperformance is an outcome of lack of diversification in terms of shareholders and customer base. Do you agree?

There are those that say banks are established based on affiliation.

Is that not the reality?

I cannot be sure because I have not had a chance to look through the list of shareholders of each commercial bank. In case of Wegagen, the story is different. Wegagen is wrongly misunderstood. If you see its shareholders, no bank is as Ethiopian as Wegagen. Its shareholders are highly diversified. Many big investors from different ethnic backgrounds have a stake in Wegagen. Name any investor and they are a shareholder of our bank. If you see the board, it is highly diversified. The same is also true if you see the management.

Did you bring that change?

No. I was the vice president 13 years ago at Wegagen and it was the same back then.

Okay, but in case of customer diversification, the reality is opposite to what you have said since the Bank’s profit declined drastically, when a third of its branches closed in one region. So is it not obvious that your bank did not work on diversifying its customer base?

Not only in Tigray. We also have many branches in Gambella and Somali than any other private banks. Of course, we have many customers in Tigray but that does not mean our customers in other areas like Addis Ababa are from the same region. We have over 2.5 million customers, way higher than the adult population eligible for banking services in Tigray. That shows how diversified our customer base is.

How about loan disbursement?

It is the same. More than 75 percent our loan portfolio is in Addis Ababa. However, in terms of deposits, the northern part of Ethiopia is known for being a big source. If you go to Mekelle, many commercial banks have many branches there. Some have more than seven or eight branches and the reason is obvious. This is because there is a good saving culture there. But that does not mean we have to work on the business mix because it is important to manage risks.

Then how did your non-performing loans surge because of the conflict if your borrowers are diversified?

We have provided five billion birr in loans to our customers in Tigray. We don’t know whether it can be paid or not because of the conflict. But that is enough to increase our non-performing loans. The whole industry faced similar problems because of the same reason. We held provisions in case of defaults. If it was not due to the higher provision we held, our profit would have been over one billion birr. That would be added to our income in the future, if we recover our loans. This means that we are investing in our future and if things go smoother and peace prevails, we hope things change drastically.

How is the liquidity position of Wegagen Bank? How capitalized is the bank?

We have a strong capital base. It used to be one of the largest in the industry, though some overtook us recently. Understanding its importance, our shareholders decided to raise the Bank’s paid-up capital to six billion birr before the end of the new deadline set by the central bank. We are also thankful that we don’t have a major shareholder because that gives us room for the management to do its job.

Regarding liquidity, when the central bank raised the reserve requirement from five to 10 percent, many feared that our bank would be among those that cannot meet the new threshold. But we are among the few banks that have fulfilled the requirement first. Our liquidity is now over 17 percent. However, that does not mean we are not facing liquidity shortages, because the whole industry is experiencing similar problems due to the sluggish growth of deposits.

Shareholders want to know when the bank would reach pre-war levels in terms of profitability. When do you think that would happen?

There are two assumptions. The first assumption is that the war would stop, peace would prevail and the government puts its energy towards the economy, a scenario which would benefit the banking industry. If peace prevails, our closed branches would be opened. We will be fully operational and our deposits would surge.

The second assumption is that if the conflict continues, we will operate with our existing resources and branches that are active. New banks are joining the industry. So I am sure we can perform better even with our active branches. We have already devised a strategy to mobilize more resources. We are hopeful that we will return to pre-war levels by the next general assembly.

Founded in September 2017, Eshi Express is a pioneer and one of the successful startups in tech-based delivery businesses, in an emerging business frontier in Ethiopia. Tigabu Haile, co-founder and CEO of Eshi Express sat with Ashenafi Endale of The Reporter, to talk about his business journey.

Excerpts:

The Reporter: What was the business pitch behind Eshi?

Tigabu Haile: If you buy an avocado in Yirgalem, it is around five birr per kilogram. But in Addis Ababa, it is around35 birr. So, we believed that Ethiopia needs an efficient logistics system in the supply and logistics service. Even in Addis, we do not see companies that provide end-to-end payment systems, sourcing and delivery services.

Sending packages in Addis is expensive. There are players like DHL, the Post Office and individual motorcycle owners. But Eshi can provide the service up to 50 percent cheaper than the market.

Basically, Eshi is a logistics company. So, how do you manage your fleet? What are the types of services you provide?

We have three types of services. We have Express service, in which we deliver any package in Addis within 90 minutes. The second type is delivery in half a day. If you order in the morning, we deliver in the afternoon. We charge 90 birr anywhere in Addis. The third category is delivery in 24 hours, which costs 70 birr anywhere in Addis.

Our main operation is in Addis. We use vans, pickups, motors and other types of vehicles. Most of the Ethiopian population is in the regions. We believe the logistics problem in the supply chain can be best addressed if we expand to regional states. Currently, we have been in the piloting phase in Adama and Hawassa, since last year. We will reach other regions in the next two years.

Do you own the whole fleet of vehicles?

We deployed the hybrid model. Around ten motorcycles and a van are owned by Eshi. But owning many vehicles is not feasible, so we stopped purchasing vehicles. We launched a technology six months ago, that enables any individual vehicle owner to register to our platform and deliver packages. Our model is called ‘from foot to fleet’. People can deliver on foot. Especially when we have big events, mass publications and other large deliveries many individuals deliver on foot.

How can these individuals or private vehicle owners access your platform? Is the technology similar to a taxi hailing platform?

It is almost similar but slightly different regarding registration system and insurance policies. Huge packages might be damaged in transit by individual vehicle owners. So, we always require courier insurance or insurance for goods in transit, for any private vehicle who works with Eshi.

How many vehicles that are not owned by Eshi are working with Eshi?

Right now we have more than 25 vans, pickups and different vehicles. There are also around fifteen motorcycles.

How many packages does Eshi deliver per day? How do you evaluate the demand?

The demand of the service is huge. There are thousands of delivery demands daily in Addis, while it is in the hundreds of thousands in the regions. The hard task is to make people use Eshi just once. Then they cannot stop using it.

Right now, Eshi delivers close to 115 packages per day. In the next three years, we plan to deliver thousands of packages daily.

How do you see the competition from other players in the market?

There is no really established company we see as competitors. There are legacy players like the DHL, Ethiopian Postal service, and individuals who have motorcycles. It is difficult for many startups to emerge and become competitors in this business.

Online payment, e-tax, e-commerce, delivery and packaging are involved in the business. How are these all done as one business?

Right now online transactions can happen but there are no e-receipts. It is impossible to make online transactions now. Payment is possible for internet and mobile banking. But if you cannot provide e-receipts, you cannot have a complete e-commerce transaction. There are shops that have an online presence. They just show their packages on their sites.

Does Eshi own warehouses or source from other suppliers?

Eshi collects the packages from companies who have warehouses. Receipt is issued traditionally. So, e-commerce is a work in progress. Eshi is the instrument that provides the logistics service. We do not sell any stuff online. Shopping happens between the customer and e-commerce companies. Once the order is placed and shopping done, either the customer or the e-commerce company orders Eshi to deliver the goods.

The number of e-commerce companies has increased since the COVID-19 pandemic. Has online delivery orders increased too?

E-commerce is taking off in Ethiopia and the government is also nearing to ratify the e-transaction law. All Shops will have an online presence. The outsourcing culture in Ethiopia is immature. Most companies want to do the e-commerce and delivery businesses by themselves. One company, especially startups, cannot handle both at the same time. So, after trying both for a year or two, they fail or specialize only in one.

Currently, big global e-commerce players are coming to Ethiopia. Probably they will launch in the next six months. Eshi has entered agreements with these global players, to do the delivery part. E-commerce companies should focus on what they can do best, because they cannot do it all, with limited time, energy and resources. We want to support their job, from the delivery side.

We will have many package drop-off points soon. If the customer is not at home when the delivery arrives, the drivers can place the packages at those points and the client can take it at anytime. This way, we are planning to drop many deliveries within one kilometer radius. This reduces our cost. That is why we charge 50 percent cheaper than the market. One delivery vehicle can cover many shops, pharmacies and supermarkets within an area.

Does Eshi plan to deliver beyond Ethiopia?

Ethiopia will operationalize the Africa Free Trade Agreement (AfCFTA) soon. Intra-Africa trade will boom in the near future. Eshi plans to become a Pan-African Delivery Company within the next three years.

Lack of automated addressing is a major bottleneck to delivery businesses in Addis. How are you solving it?

Absence of digital address system is a major problem for social services, health, banking, census, elections, apart from delivery business. Address is critical. If you do not have an address, you do not exist. Due to the lengthy communication between our delivery dispatches and clients, and usually missing locations, Eshi is losing resources, time and energy. The customer experience is also bad, because it is annoying when delivery personnel call repeatedly to find the address.

Currently, we have a project in the pipeline, named Eshi Locator, with our technology partner. It gives a code to each house’s. The codes are regenerated, when our partner localize using Google technology. We will imbed Google generated codes into our technology. It will take some time. Right now we are using Google maps, to locate the customer. But this has accuracy problems. Many things should improve to solve the location issue. Eshi Locator will be the solution.

What about using GPS locations or networks, if the customer uses a smart phone?

There are four mechanisms to order on Eshi Express. Customers can order on our website, use an application in Play Store, or call on one of our call centers. For Customers who have mass orders, like event organizers, big corporate or ecommerce companies, we have a separate technology platform, which can receive bulk orders and integrate it to our fleet system.

How much is the profit?

We cannot say it is profitable, even after staying four years in the business. At least we have survived, because we could also fail. The global data shows, less than two of ten startups celebrate their fifth year of establishment. Initiating and running a startup is very difficult. Access to capital is one of the biggest problems.

Was Eshi an angel investment?

Initially, Eshi was founded by me and my partner, who has similar business ideas with me. Eshi started with 1.3 million birr. We saved up the capital. We have also advisors. Last year, the Addis Ababa Angel Investors Network invested in Eshi. Delivery business is a capital, technology and skill intensive venture. You need to hire highly talented people. You have to scale-up fast. We hope the profit will come soon, once our delivery capacity grows.

So the angel investors are shareholders now. How much did they inject in the company?

We have an agreement not to disclose the amount. They injected the capital and immediately became shareholders. We gave them equity share worth their capital injection.

So return on investments has not come to fruition yet?

It will take time, especially with startups like us, in which you have to hire huge staff. No question, we are solving one of the top five challenges in Ethiopia. Lack of efficient logistics in the system is a major reason behind the rising inflation in Ethiopia. Food is being wasted because it cannot reach the market. For instance, there is surplus in the southern part of Ethiopia, while it is extremely scarce in the northern part of the country. That is because we do not have a robust logistics system.

Eshi still needs more cash injections to scale-up its capacity. Delivery is not only about packages, it is about the stories behind the packages. For instance the national blood bank of Ethiopia is one of our customers. We deliver blood every day. We collect blood from donation centers to the national blood bank. People are living because of that. NEBE is also among our customers. We did almost all deliveries in the past national election. We are behind the success of many big achievements. We are becoming instrumental in delivery in Ethiopia.

How many institutional customers do you have?

Currently it is close to 35. For instance, we deliver laboratory results for hospitals, on a daily basis. Embassies, hotels, optical shops, are some of them.

What are the incentives provided by the government for delivery companies, such as allowing duty free import of vehicles?

The government is not providing any support or incentive for delivery companies. There were no private courier service providers in Ethiopia, for long. So, only the Post Office and the DHL were known in this business.

For instance, driving motorcycles has been banned under the State of Emergency since some individuals might use motorcycles for crime. But Eshi had hired many staff, branded the motorcycles and there is no way motorcycles registered under delivery companies can be used for crimes. After all, we are delivering critical packages like blood and other essential services.

Secondly, there is an extreme lack of clarity among government institutions, regarding delivery businesses. Especially, the tax authorities are creating major obstacles to delivery companies. The government has no clear policy on delivery businesses, let alone support incentives. The delivery sector could not grow in Ethiopia, because the government has failed to understand it as a newly emerging sector.

There is the Ethiopian Couriers Association, to which Eshi Express is the board president. The association is trying to change the grim fate of the sector. We have submitted a letter to the government, asking the ban on motorcycles of delivery companies to be lifted. But the response from the government is slow.

Motor cycles cannot move after 6PM. So, we are forced to stop taking orders after 4PM. Otherwise, we cannot deliver last minute orders until the next day. This is especially affecting food delivery courier companies, because there orders are largely during dinner times.

What is the government’s response to the associations’ letter?

It has been three weeks since the association submitted the letter. But the government says it is still being considered. The letter was submitted to the Addis Ababa traffic management office. The city transport bureau has also failed to respond.

A new logistics regulation allows up to 49/51 partnership with foreign logistics companies. Is Eshi considering a joint venture with foreign companies?

JV is allowed for logistics companies engaged in sea, air and land transport. Ours is light package and fast delivery logistics. So JV is not allowed for us.

How much does the absence of e-receipts affect your business? How does Eshi cover the costs, if delivery is defaulted?

Online ordering, online payment, and e-receipts are not active at a national level in Ethiopia. Ethiopians consider online shopping, or e-commerce, as a luxury service reserved only for developed countries. That is acutely wrong. Delivery services extremely benefit developing countries. The purpose of e-commerce is to cut expenses and reduce prices. Companies do not have to open shops everywhere. So, it cuts out rental costs. End user customers also usually visit as many shops, to find a reasonably priced good. With e-commerce, you can find any items at your fingertip. You can order a delivery company, saving your time, energy and money.

The progress slows in Ethiopia, because the digitization pace is slow. But the Parliament is currently working on the e-transaction proclamation. The draft document has been under review for a year now. The Ministry of Science and Technology crafted the document and the Council of Ministers has passed it on to the Parliament. It was said that it would be ratified before the current Ethiopian year enters. But I think it is delayed because the government is busy due to the war.

But even after the proclamation is ratified, is there the technology that interfaces with the payment facilitator, end user, delivery companies, shops, tax authority and other regulators?

Eshi has end-to-end technology that enables the ordering and tracking of goods. The technology also enables us to publish the transactions in excel or PDF file formats.

E-commerce companies also have a similar technology. Ethiopia has all the basic ingredients to kick start e-commerce. We have the laws, graduates, and emerging e-commerce companies. The service quality will improve gradually.

Does Eshi use other payment mechanism like mobile money, tele birr and others, apart from e-commerce companies?

So far, our transaction is largely cash-based. But we are integrating with Fintechs like tele birr, CBE birr and others.

The starting price for delivery of a kilogram of package is 20 birr. It increases by12 birr per additional kilometer and three birr per additional kilogram.

How do you evaluate the competition with other emerging delivery companies?

It is difficult to say there is stiff competition. There are delivery companies that participate in bids with us. A lot of institutions like banks float bids for their bulk delivery contracts. There are only close to six active players.

The DHL, the Ethiopian Postal Service and Balderasu are active in Addis, while there are other startups emerging in regional delivery services. The DHL has no interest in the domestic delivery business in Ethiopia, leaving the market in Addis for us. Even in Europe, DHL works with local companies, specializing on the international market rather.

Close to 100,000 packages are delivered in Addis Ababa every day. Eshi, which delivers 115 packages per day, is comparatively better performing, than other players. Yet, the share of delivery companies is completely insignificant, relative to the demand.

All of close to six delivery companies in Ethiopia, including DHL and the Post office, are delivering less than 6,000 packages per day. The market is untapped.

The delivery demand in regional states is much higher than Addis. We have assessed the demand and mapped delivery services in 100 cities in Ethiopia. There is close to 200,000 package delivery demands in these cities.

Who is filling this demand now?

This demand is bridged traditionally. The Postal Service has some market share, but mostly; people send packages via cross-country buses. But this method of delivery has two major problems. First, it has no insurance if the package is damaged and second, the bus owners charge as they wish. Cross-country busses have no standard pricing for delivering packages.

Eshi is 100percent insured. When a client orders Eshi to deliver a package, the customer declares the value of the package. If it is damaged, Eshi refunds 100percent of the value stated.

Do you work with all insurance companies?

The local insurance industry is underdeveloped, thus, local insurance companies usually do not accommodate our insurance packages. So, we cover the insurance fund by ourselves. Eshi has been incurring cost due tothis. But now, we are communicating with insurance companies. All other delivery companies operating in Ethiopia do not have such insurance coverage, except for Eshi.

Is Eshi using its own vehicles for the piloting phase in Adama and Hawassa?

We deploy our own vehicles to deliver high risk packages. But usually, we use private vehicles which have insurance coverage.

Which sectors have high demand for delivery services, is it exporters, households, or wholesalers? And Ethiopia is ranked low on the logistics index. How can delivery companies improve this?

Our business is last mile delivery. We deliver from shops to end users, or consumers. Last mile delivery is the most difficult business in a given economy. One is due to a lack of precise addressing technology. It is also the most expensive logistics system. So the demand could be consumer goods, medication, and invitation or gift cards.

Last mile delivery also creates job opportunities. Millions of youth can deliver goods door to door. So, it is the best logistics sector for job creation. If we could make the delivery price cheaper, it can activate the economy, and affect millions of lives positively. It is a phenomenal sector.

By how much rate is Eshi growing from a startup to a large enterprise?

Our package delivery business size is growing at close to 10percentper month. It is not an impressive growth but we are making good progress.

We plan to grow by 15 percent on a monthly basis. Comparatively, Eshi is growing faster, because most of the delivery companies operating in regional states are highly affected by the conflict in Ethiopia.

How much does Eshi deliver in Adma and Hawassa?

Our delivery in these towns is just a couple of packages per day, for now.

But Blood Bank, the NEBE, Goh Betoch, Nile Insurance, Ramada hotel, hello market, and Ethswitch are some of our major institutional clients across the country. We do cash-up-on-delivery for our customers. We also provide full insurance coverage, which no delivery company does in Ethiopia. We also have warehouse for e-commerce companies.

Does Eshi directly buy goods and deliver?

Usually customers order e-commerce companies to supply the good. Then the e-commerce company orders us to deliver the packages to the customer who has placed the order. Hence,Eshi does not purchase the packages. The package is purchased by the e-commerce company. Since the customer cannot pay online, we collect the payments and give it to the companies, usually on a weekly basis.

If we directly engage in buying and delivering, it will take a huge capital. The e-commerce companies have the packages and the digital presence. I believe e-commerce should be much cheaper. Some e-commerce service providers give up to 15 percent discount, but the business is just taking up in Ethiopia. It is at very early stage.

Eshi does not want to play the role of e-commerce companies. If there are 40 e-commerce companies in Ethiopia, we do not want to become their competitors. Rather, we want to deliver their packages. But if there are packages not found in e-commerce warehouses and if Eshi can find those goods, we can supply it directly to the customer. Under this circumstance, we receive orders of packages worth less than 2,000 birr.

English Version News

Suzuki vehicle prices explode, shaking up the automobile industry

Yoseph Asfaw, a mid-level manager of one of the branches of Bunna Bank, was excited when he learnt he was eligible to take out a two million birr interest-free loan, courtesy of the performance his branch achieved last fiscal year. He did not hesitate to take the opportunity. After a few weeks of deliberation about what to buy with the money, he decided to purchase a vehicle. His choice was the 2022 model of the Suzuki Dzire, the most sought-after automobile in the car market. He was asked to pay 1.5 million birr.

“Are you sure I will recoup the money within a short period of time,” Yoseph asked the car retailer.

“Trust me, give it one month, and the price will surpass two million birr,” the retailer replied.

The trader was right. The price of Dzire 2022 has shot up to 2.2 million now, a development that helped Yoseph net a profit of 700,000 br in just a month. “You cannot get this money by saving or opening a trade store. And not surprising at all, given the volatility of the market,” said the banker, adding, “I don’t want to sell it as this is a treasure whose value appreciates every second, and the most profitable venture without adding value.”

It is not unusual to see the price of vehicles spike in Ethiopia. Cars are believed to be a big treasure, the same way apartments or houses are. A car costing less than USD 2,000 in neighbouring countries, the Toyota Vitz, costs nine times more in Ethiopia. The high tax on old cars, which could reach 500 percent, was used to justify the hike. Though the same is true for old cars now, the story is different in the case of new vehicles, a category given to automobiles produced within three years of imports.

Three years ago, the government introduced a new tax law to encourage the imports of new cars while discouraging the old ones. Such a reform was meant to make new cars cheaper, though it was a target that never materialized. A case in point is the Dzire 2022, an automobile imported through a duty-free scheme and flooded the market, along with other brands of Suzuki, including Espresso and Swift.

Toyota is still the dominant player in the vehicle market, though traders say Suzuki is now commanding the lion’s share, probably as high as 60 percent in the last two years. It is partly because the cost of new Toyota vehicles is higher than in the past, as older ones were less costly. For the same reason, Suzuki is the most preferred brand for importers now because the lower the cost, the lower the amount of foreign exchange importers needs to get.

“We get the forex from the parallel market with a premium, as banks barely cover the cost of the imported cars. Suzuki has become a preferred option for many importers as it is less costly and brings a better return with a higher profit margin than Toyota, which is expensive and requires a tiresome process to get the forex needed to import it from countries like Dubai,” said an importer.

Last year saw a spike in demand for new vehicles, largely due to the huge amount of finance availed by banks to borrowers eligible to take a loan to buy automobile. During the third quarter of the last fiscal year, 330 million birr was imported, twice what was imported in the preceding quarter. It is also 20 percent higher than what was imported during the same period in 2020/21. The increase is the outcome of the growing demand in the market, according to retailers. But that comes with a cost.

“The demand is way higher than the supply. We are receiving orders more than what is available in our stock,” said Ezra Hailemariam, marketing manager of Tamrin, one of the major market players in the car market and known for importing Suzuki brands.

The change in the global market has also contributed to the spike in price, according to Ezra.

“Over 90 percent of Suzuki cars are imported from India, which is not producing much now due to a shortage of inputs because of the tension between China and Taiwan, which is the major supplier of semiconductors for the factory in India,” Ezra added.

According to a senior company official, Maruti Suzuki said “it could not produce 51,000 units in the April-June quarter owing to the ongoing chip shortage situation.”

India’s largest carmaker, which sold 1.4 million vehicles this year, underscored that the semiconductor shortage is a challenge in planning its production activities.

“The electronics component shortages are still limiting our production volumes. In this quarter (Q1), the company could not produce 51,000 vehicles,” said Maruti Suzuki India (MSI) CFO Ajay Seth in an interview with a local media in India.

The scope of the fighting between government forces and militants of the Tigray People’s Liberation Front (TPLF) along the border of the Tigray region has widened with both sides acknowledging that the conflict has spread to more areas in addition to the area where it initially erupted. The fighting between government and TPLF forces resumed on August 24 after a five-month lull. Though combat had been heaviest around the southeastern border of Tigray, TPLF militants have pushed into the neighboring Amhara and Afar regions, sending residents fleeing. Clashes on the ground and air raids over Tigray have poured cold water on the efforts underway since June to find a peaceful solution to the 21-month war that began following an attack on federal army camps based in the region. The warring sides have accused each other of firing first and shattering the months-long relative calm that has been prevailing in the northern part of Ethiopia following the federal government’s announcement in March of a truce to allow humanitarian aid to be delivered to Tigray.

The federal government has also blamed what it calls the west and Ethiopia’s “historical enemies” for using the TPLF as a Trojan horse to advance their evil design on the nation. Ever since the administration of Prime Minister Abiy Ahmed (PhD) commenced a military operation in Tigray in November 2020 in response to attacks on the Northern Command of the Ethiopian National Defence Forces (ENDF) the country has been subjected to unprecedented pressure at the hands of Western governments, the U.N., mainstream media, think-tanks and rights groups. The U.S. particularly has sided with the TPLF, slapping a slew of sanctions on Ethiopia and withdrawing its benefits under the United States’ tariff-free African Growth and Opportunity Act (AGOA) while it gave the TPLF a slap on the wrist. Furthermore, the U.S. and its allies at the U.N. Security Council have tried over a dozen times to formally admonish Ethiopia but failed thanks to the vote of China, Russia and India. Apart from exerting undue diplomatic pressure, the West has also been waging an information warfare against Ethiopia through a disinformation campaign undertaken by the mainstream media, think tanks and so-called rights advocacy organizations. Its end-game, as some analysts plausibly argue, is to engineer a regime change or if that does not work to coerce Prime Minister Abiy’s administration into accepting to the demands of the TPLF.

It’s not only over the Tigray conflict that the West is pressurizing Ethiopia though. The filling and operation of the Grand Ethiopian Renaissance Dam (GERD) has been a bone of contention between Ethiopia, whose highlands supply more than 85 percent of the water that flows into the Nile River, and the lower riparian states of Sudan and Egypt. In 2020 the U.S. tried to force Ethiopia into signing a binding agreement on the filling period. The Ethiopian government declined to sign-off a U.S.-drafted agreement regulating the filling time of the dam, which Egypt insisted should be completed over 12-21 years, saying it has the right to fill the dam at its own pace and would do so in no more than seven years. Although Sudan initially supported the building of the dam, since then it has taken Egypt’s side on the ground that filling the dam without the agreement of downstream countries imperiled its national security. Again the Security Court, at the behest of Egypt and Sudan, convened on several occasions to consider a resolution calling on Ethiopia to cease filling the GERD’s reservoir and pushing for a binding agreement between the three sides on the operation of the dam but failed to adopt it.

The West’s motives driving its pressure campaign on Ethiopia, its long-standing regional ally, are purely self-centered and zero-sum. It is wary of Ethiopia’s pursuit of an independent foreign policy, which may very well frustrate the accomplishment of its strategic goal in the Middle East and Africa. First, Ethiopia’s apparent reluctance to do toe the West’s line has been perceived to make it harder to protect the interests of Egypt—the cornerstone of its Middle East policy. Second, its attempt to thread a needle as animosities between the West and China ramp up is not appreciated by the West, which feels threatened by Beijing’s growing clout on the global stage. Given Ethiopia has been a beacon of black Africans’ struggle for freedom and could inspire continental resistance to neo-colonialism, the West might deem that forcing Ethiopia to forsake China is instrumental in containing the influence of its top geopolitical rival in Africa.

The West better realize that the essentially undemocratic and unipolar global world order that had prevailed over the last several decades following the end of the Cold War is ebbing. As a country that has never been colonized and is home to a fiercely patriotic people, Ethiopia will never cave in to the West’s demands. Needless to say this requires on the part of the federal government to develop and implement a robust diplomatic policy aimed at nullifying the threat posed by its historical enemies through a variety of tried and tested mechanisms. Some of the steps it can take in this regard include forging a compromise with its adversaries where possible and failing that to foil their destabilizing policies and measures. Ethiopia has the capacity to find a resolution to the political crisis engulfing it. Any nation or organization which has its interest at heart should stop meddling in its domestic affairs and instead support it in seeking enduring solutions.

The abrupt eruption of fighting between government forces and militants of the Tigray People’s Liberation Front (TPLF) along the border of the Tigray region this Wednesday has left Ethiopians apprehensive and disheartened. The resumption of active hostilities shatters the months-long relative calm that has been prevailing in the northern part of Ethiopia following the federal government’s announcement in March of a truce to allow humanitarian aid to be delivered to Tigray. Predictably the warring sides have blamed each other of provoking the hostilities. The Ethiopian government has accused the TPLF of striking first, saying it had “destroyed the truce”. In a statement it issued on the same day the Government Communications Service said, “Disregarding the numerous peace options presented by the Ethiopian government, the armed wing of the terror group TPLF, pushing with its recent provocations, today committed an attack” around southern Tigray. The TPLF though has said government forces and their allies had launched a “large scale” offensive towards southern Tigray early Wednesday after a months-long lull in fighting, adding its forces were defending their positions in the southern front.

The lead up to the current round of conflict portended the escalation of the now 21-month civil war. War drums were repeatedly being beaten with all the sides in the conflict issuing statements pointing to the outbreak of an impending war. The TPLF said on several occasions that the peaceful path to resolve the situation was not working and that it was considering “other options.” The government of Ethiopia on its part accused the TPLF of engaging in extensive military mobilization in preparation to restart the war and called on the international community to condemn the terrorist-designated organization and dissuade it from its ill-fated move. The government of neighboring Eritrea, whose troops have been operating in Tigray since the war began, also pointed the finger at TPLF for plotting to launch attacks on the country to reclaim lost territory.

Since November 2020, the bloody war has exacted a heavy humanitarian toll and ravaged the nation’s economy. In addition to the tens of thousands killed and injured, millions more were displaced, psychologically traumatized and left needing emergency food assistance. Social and economic infrastructure has been totally or partially damaged, including schools, universities, health institutions, and other facilities in the Tigray, Amhara and Afar regions. The economy has taken and continues to take a battering. Its growth, which stood at around 10 percent annually before the conflict, has contracted by half; scores of industries have been damaged while some investors have suspended or totally quit operations, resulting in a surge in unemployment; the undoubtedly huge sums of foreign exchange the war has eaten up has contributed to its dearth at levels rarely seen before and to driving inflation higher. Although it’s difficult to quantify the true cost of the war, the destruction is sure to have cost Ethiopia billions of dollars.

The renewed conflict comes as efforts underway since June following the establishment of a government-appointed committee tasked with starting peace talks hit a snag. The government’s announcement in late July that it was ready to hold talks with the TPLF “anytime, anywhere” and the TPLF’s expression of its willingness to ending the war through peaceful means raised the prospects of peace. The apparent readiness of the two parties to engage in peace talks was hailed as an important initiative locally and by the international community. However, both sides have laid down preconditions that they say must be met prior to the commencement of talks—the declaration of a formal cessation of hostilities in the case of the Ethiopian government and the resumption of basic services to Tigray by the TPLF. They also disagree on who should lead negotiations, with the government demanding that the African Union oversee the process but the rebels insisting that outgoing Kenyan President Uhuru Kenyatta should chair it. While we are not apportioning blame here it’s disappointing to say the least that war has broken out again due to the inability of political leaders to do whatever is necessary to prevent it.

War is generally regarded as something that cannot guarantee a win-win solution to political conflicts. This said some contend that war is not necessarily the worst option as long as it fulfills certain considerations that lend it moral acceptance. Critics, however, argue that all war is essentially indefensible regardless of how justifiable the cause behind it may be. They also attempts to justify a particular type of war as being just serve to rationalize violence instead of constraining it. Philosophical differences aside, many agree war is a failure of imagination. Ethiopians have had enough of the internecine conflicts that they have endured for centuries. The blame squarely lies with political leaders and elites bereft of the desire to settle differences through constructive dialogues. In any kind of armed conflicts it is innocent civilians who bear the brunt, not their architects. That’s why the Ethiopian government and the TPLF need to immediately stop fighting and thrash out a durable peace accord at the negotiating table. Let’s not go back to square one!

Hopes of a negotiated political settlement to the war that erupted in northern Ethiopia in November 2020 following the attack on the Northern Command of the Ethiopian National Defence Forces based in the Tigray region by the forces of the Tigray People’s Liberation Front (TPLF) have been high ever since the Ethiopian government established in June a committee tasked with holding peace talks. The government’s announcement in late July that it was ready to hold peace talks with the TPLF “anytime, anywhere” and the TPLF’s expression of its willingness to ending the war through peaceful means, albeit the fulfillment of certain preconditions, led many to believe that peace was finally within Ethiopians’ grasp. The apparent readiness of the two parties to engage in peace talks was hailed as an important initiative in bringing a conflict that has exacted a terrible toll on the country and its people to an end.

Efforts to start the peace talks seem to have hit a snag lately though. First, this week the Main Peace Committee—the committee the Ethiopian government established to explore the possibility of talks with the TPLF—declared while announcing it had drawn a “peace proposal” that the resumption of basic services to the war-stricken region was contingent up on the creation of an enabling environment once a formal ceasefire is concluded. Meanwhile, the TPLF immediately dismissed the committee’s statement as “obfuscation”, blaming the Ethiopian government for openly defying “their oft-repeated promise to take measures aimed at creating conducive environment for peaceful negotiations”. It further accused it of “taking provocative actions against [Tigrayan] forces” and warned that “it will be solely responsible for the eruption of a second round of war that will lead to the total destruction of the country”.

The condition laid down by the Main Peace Committee in a statement it issued, namely that the declaration of a formal cessation of hostilities is a prerequisite to resume the provision to Tigray of, among others, electricity and telephone services belies the Ethiopian government’s recent unambiguous assertion that it was committed to hold negotiations without any precondition and as such represents a step backwards. While the committee has legitimate security concerns regarding the safety of federal government employees that need to be deployed to Tigray in order to restart the basic services, it should also be mindful of the fact that the continued disruption of the services only serves to exacerbate the plight of ordinary Tigrayans, not the leadership of the TPLF. It needs to demonstrate in deeds its avowed commitment to alleviate the suffering of citizens in the conflict-affected parts of the Tigray, Afar, and Amhara regional states. On its part the TPLF must stop beating the drums of war in the realization that throwing around belligerent statements is counterproductive to peace-building endeavors and just prolongs the ordeals of the very people it claims to stand for.

A host of hurdles stand in the way of the proposed talks. TPLF forces still occupy parts of the Amhara and Afar regions they invaded. Similarly, the Amhara region has ruled out negotiating over the fate of areas its forces wrested from Tigray soon after the war erupted, arguing they were forcefully incorporated under the Tigray region in 1991. The continued presence of the Eritrean troops in some of the territories they occupied in Tigray poses a challenge that complicates negotiations. Moreover, disagreements over who leads the mediation process—the African Union (AU) as the Ethiopian government insists or Kenyan President Uhuru Kenyatta, the preferred choice of the TPLF—can torpedo the entire process.

Trying to bring about a complete end to the fighting in northern Ethiopia followed by a political settlement which leads to a lasting peace is an arduous task to say the least. Nevertheless, no price is too high to pay for peace. Now is the time for the warring parties to show a genuine determination and commitment to peace. The deep-seated antagonism between the two sides understandably makes it difficult to strike a peace deal. Engaging in dialogue and making the necessary compromise requires more courage than continuing the war. Embarking on a peace process should not be about total victory for one party and a defeat for the other. It is about achieving an outcome in which all the protagonists and more importantly the people of Ethiopia emerge victorious. For the sake of Ethiopia and its people the Ethiopian government and TPLF must recommit themselves to peace.

The rule of law is a mechanism, process, institution, practice, or norm which strives to ensure that no one is above the law, everyone is treated equally under the law and held accountable to the same laws, there are clear and fair processes for enforcing laws and human rights are guaranteed for all. Ethiopia has the sad distinction of being a nation with a checkered track record when it comes to upholding the rule of law. Among the different metrics by which a country’s overall rule of law performance may be measured, Ethiopia has particularly fared badly in assuring order and security as well as respect for fundamental rights. The act of turning back some people travelling from the Amhara region en route to the capital Addis Ababa constitutes a clear example of the latter.

For over three weeks now security forces in the Oromia region have been preventing citizens travelling by cross-country bus from the North and South Wollo zones of the Amhara region to the capital through Oromia from getting to their destination if they do not carry a residence ID of Addis Ababa. Federal government officials claim operatives deployed by the terrorist Tigray People’s Liberation Front (TPLF) were recently arrested while trying to infiltrate Addis Ababa using residence IDs and administrative seals it had looted when it occupied some parts of the Amhara region, adding the measure is part of a security operation aimed at thwarting the evil designs of the terrorist group. True, a government’s primary responsibility is to protect the safety and security of citizens. Nevertheless, care must be taken to ensure that the manner in which any operation to ensure law and order does not trample basic liberties enshrined in the constitution.

One such right is freedom of movement. Article 32 of the constitution stipulates that any Ethiopian or foreign national lawfully in Ethiopia has, within the national territory, the right to liberty of movement and freedom to choose his residence, as well as the freedom to leave the country at any time he wishes to. The Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights, and the African Charter on Human and Peoples’ Rights — the international instruments Ethiopia has ratified and in conformance with which the fundamental rights and freedoms specified in the constitution must be interpreted — also afford protection to this right. Absent a duly declared state of emergency, there can be no justification for the indefensible prevention of Ethiopian citizens from enjoying their freedom of movement on the ground that they pose a potential security threat.

Aside from flouting the rights to liberty of movement, the action of the Oromia security forces has other troubling ramifications. First, it creates a perception of discrimination and ostracization in the individuals victimized by the travel restriction. Moreover, the fact that they are unable to travel to their intended destination entails damaging economic and social consequences for them. This is liable to sow the seeds of resentment and down the line to political conflict. Second, it encroaches on the federal government’s constitutionally granted power to regulate major roads linking two or more regional states. Such intrusion into the federal government’s exclusive preserve sets a bad precedent for other regions. In short it spells danger for the integrity of the constitutional order and the rule of law.

Freedom of movement is a fundamental right all levels of government must respect. Any perceived security threat its exercise may pose should be handled in a manner that does not result in the violation of the right and subjects innocent citizens to inconvenience. There can be no sugarcoating the fact that the act of preventing certain classes of people from travelling to wherever they want is an unequivocal infringement of not only freedom of movement, but also the right to equality. As such it is incumbent on the federal, Oromia and Amhara regional governments need to hold consultations on ensuring that everyone travelling from the Amhara region via Anwar Soussa has been the Managing Director (MD) of Safaricom Ethiopia since July 2021. He was the Managing Director of Vodacom DRC and the Chairperson of Vodacash (M-PESA), a position he has held since 2017 until joining Safaricom Ethioia. During his tenure, Vodacom DRC made major strides in operational performance, crossing the USD half a million in service revenue mark for the first time in 2020. The Reporter’s Samson Berhane sat down with him to understand his new beginnings in Ethiopia.

The Reporter: First, tell us about your journey in the telecom sector.

Anwar: I have been in the telecom sector since 2006. But I started in the technology sector since 1996 in Montreal, Canada. I joined Safaricom Ethiopia, the project, when I was in Vodacom in Congo. I was a CEO there. My experience perfectly suited for this type of operation.

Safaricom has been preparing for more than a year to launch service. Why did it take so long? What were the problems that you have faced while doing so?

I don’t call it a problem. I call it a challenge. Initially, when we come into the market, the idea was to launch using ethio telecom infrastructure. That agreement took longer than expected to finalize. As a result, we choose to build our own towers. We did not want to wait. To build towers, you have to find land, import materials like steel and find cement as well as hire sub-contractors. That means you need more time than the initial plan. That is the real reason why it took longer than expected to launch service. Now, we signed a deal with ethio telecom and things are gonna move faster.

Tell us about the detail of the deal. I heard you are going to pay in both local currency and USD to lease the infrastructure of ethio telecom.

I am going to keep the deal private because that is between us and ethio telecom. But there is a dollar component. The reason is, as well all know, there is a forex shortage in the market and to prepare a site for us, they are required to import materials from abroad. We recognize that. We agreed to make the component in dollar for them to make the site ready for us.

So, the negotiation is now over?

Ethio telecom has been a very good partner. The CEO, Frehiwot, has been gracious in terms of engagement with us. Everything is proceeding well. The delay was due to operational issues. How many juniors were available? How fast we can get steel? How fast we can upgrade the site? All of these are operational issues.

When you launch service in Dire Dawa, you have used your own infrastructure.

That’s correct. When we launch service, initially, we are using our own infrastructure. But as we move forward, we will be sharing infrastructure of ethio telecom and build our own in the meantime.

Is there any change in equity contribution of shareholders in Safaricom Ethiopia? Some say, there is. Is that true?

No, there is change.

As Safaricom is listed in the stock market, a change is expected when something new happens. Have you seen any change recently after you launched service?

I don’t think it is possible for you to attribute any change to a certain element. The reality is the World’s stock market has been very volatile over the past six months. There is a war and a global recession coming in. Certain things happening are way beyond the control of a certain company or what we do here in the ground.

What should Ethiopians expect from Safaricom? Many hope Safaricom will come up with a better quality of service with a lower fare.

The pricing move from ethio telecom last year was very strong. They brought down massively. I am not sure if it will be possible to bring down price from what is in the market now. However, in terms of quality, my expectation is that the quality overall in the market will improve. And the reason I say that is because we are setting up a new network and ethio telecom, or the competition, will not stay still, I expect they will bring the best game in the table. Quality of service, both in technological level and in customers’ service, will be improved massively. How customers’ complaints are going to be taken care of? I think these are areas where you see a major improvement.

The price that you are charging is almost similar with ethio telecom. Do you think you can be competitive in the market, while charging the same price, as people expect a lower fare from you?

The price for voice is one of the most aggressive in Africa. And I don’t think there is a room to drop voice prices. So do I think we can be competitive? Yes, I do. The most important thing we want to flag is that we don’t want a price war with ethio telecom. If we start a price war, that means they will automatically react. There is no way there is going to sit by and see us dominate the market because our price is cheaper. I think that will a detrimental impact on the market, not only on us. I don’t think you see a change in terms of price.

The infrastructure deal took more time than you anticipated. The global market is not helping too. Did you make any change in your financial targets, considering the challenges you have faced since you secured the license to operate in Ethiopia? For instance, do you still think it is possible to achieve breakeven within five years, as outlined in your initial plan?

Yes, I do think so. I think the biggest challenge is the global inflation. The price of fuel is increasing. The same is true for cement and steel. All these things are going to be more expensive. I think this element of the business will be very challenging. Yet the plan is still to breakeven within four or five years. But we have to pay attention to the cost.

You are investing heavily in infrastructure development. And can you tell us how far you have gone thus far?

We will continue to invest with the money that we allotted when we started the business. Some places are easier. Addis is easier than the regions. This is because there are a lot of buildings to put on the antennas. So it is simple to deploy in Addis than other areas.

If it is easy, why did you first launch service in Dire Dawa?

That is a small town. It requires fewer sites. It is easy to optimize. The network rollout was very fast.

How long it would take to launch service in Addis?

Six weeks. We believe there is a massive opportunity in the capital, in every element. I have been working in 12 countries. I never had been in a country where a single company dominates everything. The market will be split.

Is there any place that you want to capitalize on, especially an area where ethio telecom has a little presence?

That is a nature of businesses. You grow until there is no place to grow.

How long it would take for you to be independent from ethio telecom?

I don’t think we want to be independent. The reason I say that is because old days where everyone builds its own infrastructure are gone. You have to share infrastructure. That makes more sense because that does not have any impact on your competitiveness. Why do you build a fiber where there is a fiber? That will be a waste of money.

There has been a social media outcry against your recruitment process. What is your reflection on this?

To be honest, I think it was not only on the recruitment process but also on the language we are using. It was also about distributors and how we are allocating distributors across regions. It was also about the religious mix of what we have in the office and what we have employed everywhere. There were a bunch of requests the activists raised with us. So, we did not respond immediately because we were supposed to understand whether these are true or not and see ourselves if there are problems. To be honest, I don’t think the problems are as acute as people are saying. What they did say is to be careful. For instance, if we go to Oromia, we have to use Afan Oromo. We have to pay attention to laws. We have put signs saying coming soon. It was us not being sensitive. We met guys behind the campaign. They were very moderate. None of them want to hurt Safaricom. They want what we do to be fair. They did not make extraordinary demands. That’s why we are comfortable to engage with them. I understand we have to be sensitive to the history, the culture and the current politics without going too far. It has to merit-based. Everybody coming to the company should be the best of the best. We have received a lot of advises from the government. All of them said “you must choose the best but be careful.”

Do you think it is possible for Safaricom to apply meritocracy in light of the current situation in Ethiopia?

I think there has to be a meritocracy. The qualification of the candidates has to be there. There should be no compromise. However, as we choose candidates, the priority must be given to the people within the region. It is not appropriate to start shifting from one region to another. Not because of other issues but language considerations are critical. People have to speak the language of the area where they are working.

Now let us talk about mobile money. I know you are in the process of launching M-Pesa here. Do you see any progress from regulatory body in introducing a legal framework to govern the sector?

The legal element is going fine. I think it is gonna be available very soon. Our shareholders are engaging with the government. From operational perspective, things are going well. We have put the app in place. We have put configurations in place. Everything is in a good shape. In technically perspective, we will be ready to launch service in the next three months.

The approval process of the bill may take another three months. Do you think that will have an impact on your plan?

No. We got so much to do. We have 25 cities to cover. We have massive network to build.

Do you think you can repeat the success of M-Pesa in Kenya here in Ethiopia?

Absolutely. Kenya is particularly amazing story. Wherever we launched M-Pesa, we were successful and we are leading the market. So we don’t see any way it is not going to be successful in Ethiopia.

Ethio telecom is already advancing in the mobile banking market. Are you expecting fierce competition when you launch M-Pesa?

I do expect very strong competition. They have done a great job in recruiting customers and strengthening the network.

From what I have observed, ethio telecom is taking an advantage of its link with public offices to facilitate payments in the public sector? Have you get any promise from government officials whether you will get the same opportunity when you launch M-Pesa?

We are talking them to now. There is no one said we are not going to get this opportunity. Yes, they had a one year head start. They have done great job in services they have launched. Yet I believe we can catch up.

How is the war in North Ethiopia affecting you?

We have a huge amount of work to do. I think it will slow us down in certain areas but we will continue doing our work in other areas. But everyone is sad to see the resumption of conflicts.

Are things in place to launch service in North Ethiopia, particularly in Tigray, if the war ends?

We will be ready as soon as communications are stored and get the blessings to go back in. We want to reach all over Ethiopia.

My last question is on repatriation. Many international companies usually complain about the difficulty of repatriating profit in Ethiopia. Some say it takes over a decade. How is your plan in that regard?

Repatriation is not a big issue. The issue is finding dollar to buy equipment after the investment window closes. After our money runs out, we need to get forex to buy equipment. Regarding repatriation, we knew the issues when we came. If it takes 10 years, it takes 10 years. We gonna be here longer than that. Of course, we want to repatriate but we are here for long term.

Oromia without fear that they will be turned back before getting to their journey’s end. Given upholding the fundamental rights laid out in the constitution is vital to assuring the very survival of Ethiopia as a cohesive polity, overstepping the constitution in the name of containing elements bent on wreaking havoc cannot and should not be tolerated. That is why it’s imperative to put an immediate stop to the blatantly unconstitutional violation of freedom of movement and see to it that it’s not repeated ever again. Goitom Tsegaye is deputy chairperson of Arena Tigray, an opposition party popular in Tigray. He has been voicing his concern over the war in Tigray since it broke out almost one and half years ago. The second time the conflict started, Goitom found it heartbreaking. He thinks that in carrying out the eagerly anticipated negotiations between the two warring groups, the African Union did not fully fulfill its obligations to the organization. The Reporter’s Selamawit Mengesha sat down with the opposition leader to get more of his perspective on the recent resumption of hostilities.

The Reporter: Let’s start with the war that erupted anew this week. Before the battle resurfaced, there were talks of a peace agreement. Is there still hope for negotiations?

Goitom: It is heartbreaking that the dispute has resurfaced this week. Since it began, there is a potential that it will continue, although much will be lost if it does.

War’s casualties are well known, and hopefully we have a government that cares enough about its people to put an end to it. They should have learned from their previous mistakes and avoided them, in my opinion.

Both parties demanded that mediators be appointed. What was the reason the two parties couldn’t agree on who should undertake the mediation?

Essentially, I believe there is one thing we should all remember: everyone must be fair and impartial while looking at things.

In a war, not everyone carries a weapon, but what we’re seeing in Tigray is people lacking necessities such as banks, water, transportation, telephones, and electricity.

We were taught to believe that these services were destroyed during the war and that the government was unable to repair them, but it is now clear that this was not the case all along.

According to the Tigray regional government’s discussions with the EU, the federal government is leveraging these necessities when it could simply provide them to the people; it’s using them as a weapon of sorts.

War has laws, but the warring side is separate from the people. The people of Tigray are also Ethiopian citizens; hence the administration is harming its own people. Personally, I believe it is not the best way to proceed.

I believe that the federal government should have learned from its failures from the beginning. I don’t think initiating a full-fledged war with the TPLF was the best course of action. Instead of attacking, it should have been defending.

It was not a prudent move, especially with other powers involved. What I mean is that the items the Tigray regional government is requesting from the federal government are essentials for the people.

Both parties bear responsibilities for doing the right thing by the people. I’m not sure why it’s framed as a difficult choice. It is for the people of Ethiopia; hence the government should have established a consensus for its people by now.

To return to the subject of the negotiations, the government already pledged to begin them without any preconditions. However, the offer was to negotiate solely with the TPLF, without including Amhara, Afar, or even Eritrea. Do you think these groups should have been taken into account during the negotiations?

I believe the government’s strategy was flawed from the start. We’ve observed unlawful acts such as Tigray transferring land to Amhara with the assistance of other forces, so what has the Amhara area lost from Tigray?

We’ve heard on several times, particularly in the case of Welkait, that the region is attempting to reclaim their land. Is it even their land is the question?

The structure of the regions, in my opinion, is fairly apparent.

I say this because there was a region called Show that later became part of the Amhara and Oromo region, a place called Bege Medhir became part of the Tigray and Amhara region, and if Welo became part of Afar, Tigray, and Amhara, then there is really nothing new that happened between Tigray and Amhara, unless there is a belief that if I am living here, there is no one else there, which in that case makes comprehension difficult.

Ethiopia and its land are inextricably linked, so stating the land was mine and I want it back makes no sense to me. Questioning the demarcation system is understandable, just as arguing “using language as a way of defining regions is wrong,” but claiming land in the same country is not.

Ethiopia’s land is reserved for Ethiopians. Sitting and talking with Tigray and the federal government makes sense because the government is clearly offending Tigrayans and requires mediation.

Because Eritrea was involved in the attack, having Eritrea participate in the talks makes more sense than having the Amhara region participate in the talks.

Understanding this, I believe, is critical.

As a representative of Tigray, Eritrea and the federal government should have discussed Bademe and other issues. However, in actuality, the federal administration has not been representing the people and territory of Tigray.

Negotiations have been attempted by international groups. We’ve seen people like Obasanjo come to the country and make attempts, and many people were optimistic that the talks would take place. Do you believe the conflict resurfaced because those bodies failed to carry out their duty properly? Or do you believe they carried out their responsibilities correctly?

I believe we should have taken the initiative.

Both the federal government and the Tigray regional government should have demonstrated interest in the negotiations from the start; only then could other groups assist in getting the talks started.

According to my knowledge, they did not fulfill their obligations, particularly the African Union. Aside from creating articles and laws, I do not feel the AU has a consistent and capable ability due to one of their articles; Article 2H, titled humanitarian integration.

Although the article has been ratified, the Union lacks the resources to put it into action. According to that provision, the Union has the right but not the resources to intervene in cases of humanitarian rights breaches.

For example, the AU did nothing to address the Tigray situation; there were words but no action. For these reasons, I didn’t have high hopes for the AU. It still has a long way to go, in my opinion.

Other international organizations with influence and power have their own military intervention regulations as well. The west has previously attempted to exert pressure on the administration, but international organizations such as the EU and countries such as the US are preoccupied with other matters such as the Ukraine-Russia war.

They have the ability, but their focus has been diverted away from Africa. They, too, lack consistency, as evidenced by their actions in Ukraine. As a result, I don’t believe they’ve done their part

They have the power and capability, and yet here we are.

Who do you believe is to blame for the re-ignition of the war? Could the difference in negotiation beliefs be the cause, or do you believe the absence of the Welkait and Humera concerns is a contributing factor?

As I stated at the outset, if we refer to the Oromia area, we need to know which cities and counties comprise that region. That is, the problems of Tigray and Welkait should not be a problem. I cannot argue that the requirement should not be met because the federal government granted the land without Tigray’s approval and is now requesting that Tigray accept it.

People who lived there before are now refugees. People are unable to use their own funds because banks are closed. All of these difficulties should be considered as prerequisites.

It’s not difficult to grasp, even for the federal government. People are hungry, so shouldn’t that be addressed first as a prerequisite before any negotiations begin?

I cannot accept the idea that there are no prerequisites. Negotiations would be conducted with a boot on the people of Tigray if those demands were not met.

I don’t have any information on who restarted the war. To be certain, I would have to live there. I am like everyone else, listening to all sides’ arguments.

What will the people of Tigray face if the fighting continues? You’re already aware of the issue. What do you think about the present humanitarian crisis?

I don’t believe that anything positive can come from conflict.

War will take innocent lives, destroy property, and deplete the economy, and what could be worse than that? Tigrayans are at a significant disadvantage.

They are under attack from their own government, former foes such as Eretria, and adjacent territories such as the Amhara region. It’s painful to see how something that should have been resolved amicably has turned into an injustice against the people of Tigray, which is also an injustice against the rest of the country.

Hopefully, people will realize this soon. I’m sure there will come a day when our empathy will be tested. Ethiopia will pay a high price as a result of the conflict. In the war, there are no winners, but all are losers.

Do you believe the constitution can deescalate and resolve the conflict? What are your thoughts on the matter? Is it possible to resolve the disagreement based on the current constitution and the new statute established by the federation under which regions could decide directly to be regions?

There aren’t enough people organized to hold a referendum. Furthermore, Tigray has no representatives in the House of Federations. How will Tigray make its case? Who will be Tigray’s representative?

At this stage, it would be child’s play; the most serious offenses have already been committed. Atrocities in violation of the constitution have occurred. International agencies have branded it ethnic cleansing, and some have even called it genocide.

So this is pretty strange. On paper, the constitution is just and fair, but its implementers are not.

Is it truly conceivable to exclude Eritrea from the war in the future if Eritrea’s government refuses to withdraw its troops? Will their departure solve the problem in any way?

I believe we must consider how they got to be involved in the war.

Did the federal government request that its troops participate? Was the Parliament able to represent them? I mean, there are multiple options, right? Who delegated authority?

These points must be addressed first.

It would be pointless to question something that has no legal foundation. Was a formal agreement reached between the Ethiopian government and President Esaias? If so, what were the terms, and where are the documents?

Is it even conceivable for an Ethiopian Prime Minister to pull out such a deal out of the blue? He cannot. To begin with, it must go past Parliament.

As a result, the question of whether Eritrea should withdraw has become extremely convoluted, with numerous loose ends.

We have observed that since the beginnings of the war, a large number of Tigray-born residents living in various cities throughout the country have faced discrimination and harassment everywhere they go. They couldn’t return to Tigray due to the war, and during this time, everybody from Tigray or of Tigrayan ethnicity was in a plight. That had been subsiding to a degree in recent months, but now that tensions have resurfaced, what does this mean for Tigrayans living around the country?

This is a clear problem. Kibrom authored a book and was detained because of his ethnicity; he traveled to Afar and got into a lot of problems; I’m using him as an example, but there are many others like him.

What is the UN peacekeeping mission doing now? To be honest, I don’t think it was even this horrible during Derg’s reign.

Innocent people are openly mistreated based on their race, with some even losing their lives as a result. Tigray is not being represented by the government, and this must change. It must reflect on its previous activities.

We are on the verge of a major crisis, which must be examined thoroughly.

It is unacceptable to feel unsafe and to face severe discrimination in your own country because of your heritage. There was a glimmer of hope. As you stated, the current circumstance may pass as it always does, but it may leave wounds and scars that will not go as readily.

Do you believe Ethiopia will be restored to its former glory in the future? What is the hope in a situation when many already believe Tigray is no longer a part of Ethiopia or that it would have a referendum? Do you believe Ethiopia is one of them?

It depends on the next steps we take.

As far as I am aware, Tigray is still a part of Ethiopia. Even Eritrea would have been a part of Ethiopia if not for the Adwa war and its consequences.

Right now, looking at the government’s actions against the people of Tigray, such as refusing to reopen banks, the internet, and transportation, it appears that there is a power that does not want Tigray to be a part of Ethiopia, which is incorrect. The China Foundation for Poverty Alleviation (CFPA) is a non-governmental, non-profit organization that was established in 1989 as one of China’s largest charity organizations dedicated to poverty alleviation.

The foundation, among other things, provides healthcare and nutritious food to vulnerable populations, with a focus on mothers and children; supports education programs; provides scholarships; builds infrastructure; and distributes stationery to help communities thrive.

The Ethiopian Civil Society Organizations Authority registered the Foundation in 2019, and it has been actively working since 2015 by collaborating with local and international non-governmental organizations on various projects such as school feeding, clean water, women’s economic empowerment, and refugee support. Sisay Sahlu of The Reporter spoke with Emma XiaocenXuang, the country director of the foundation’s Ethiopian office, about some of the project activities in Ethiopia.

The Reporter: It is unusual to see the Chinese government involved in such areas, particularly in poverty alleviation. What are the goals of establishing this foundation?

Emma XiaocenXuang: This is the basis of a total charity organization founded in 1989.

The Chinese government’s fund for social enterprises provides 99 percent of its funding. In China, the foundation works in the fields of health, education, rural development, and livelihood. We are now investing in similar international engagement areas.

In Ethiopia, our official implementation agreement began in 2015 in collaboration with Ethiopia’s First Lady, Roman Tesfaye, specifically to begin school feeding in Addis, in over 43 schools.

We were collaborating with a local organization called E-network at the time, but they changed the name to Hailmariam and Roman Foundation. We were officially registered as a civil society organization in Ethiopia in 2019 after working with this foundation for about four years.

We started the registration process in 2017, but the government changed, so we put it on hold. We restarted in July of 2019.

What is the foundation’s international experience?

In 2005, we began working as an emergency aid provider, and in 2015, we officially began in Myanmar and Nepal as our first steps in Asian countries, with Ethiopia becoming our first African destination.

We began our project in Ethiopia and Sudan in 2015. However, we chose Ethiopia as the location of our regional office.

The Chinese government has extensive experience in poverty alleviation. What is the secret to their success? Are there any suggestions?

One component of the foundation is poverty alleviation. The People’s Republic of China has a very strong system, and China is very good at mobilizing all of the parties involved, such as companies, non-governmental organizations, the public, the government, schools, and research institutions, to engage in poverty alleviation.

All of those parties are working within this system, and there are numerous methods and areas for collaboration in the education and nutrition sectors. We incorporated the school feeding system into children’s basic rights and the education system, not just the Zero Hunger plan.

We also give quotas to poor areas, particularly at China’s two best universities, Tsinghua and Peking. According to policy, we provide a quota for the poor. This is because if you want to end poverty, you have to invest in education.

Similarly, we must construct a very strong housing system to ensure that all citizens receive the full package so that they won’t have to stress over things like, “Oh, I’m sick right now, so I’m going to the hospital and spending a lot of money, since the government is covering most of the cost.”

Both the government and non-governmental organizations offer benefits like insurance.

For instance, I was born in China. Both the government and my company provided insurance for me. However, I believe that identifying the poor is the most difficult task because doing so is the first step in providing aid to the underprivileged.

In this regard, the Chinese government created a system that can store all of a person’s information on a card that serves as an ID card. You can discover a person’s complete information using this card.

A person also has a complex set of criteria and evaluation standards.

If you have an income of up to 2300 Chinese RMB, that means you are getting out of poverty, and the next step is to observe and follow-up for a few years until you make steady progress out of poverty.

If they are in an accident or become ill, they will be forced to return to poverty and their names will be added to the poverty list again. So this is a national system implemented with strong leadership and complex evaluation criteria to identify, follow-up, and evaluate the entire system.

How can we balance the demands of the expanding population with the available resources? Is there any advice, particularly with regard to the food system?

You know, it could be the geographical location, but if you look at China, we have a very large land area. Even the climate in the north and south is vastly different. People in the south, for example, prefer rice as their main food, whereas people in the north prefer wheat. The majority of Ethiopians consume Enjara.

I believe it is about food diversity and nature’s gift. I couldn’t find any seafood in Ethiopia. Everything is imported. So, in comparison to geography and location, it is the gift of nature that I want to emphasize.

The second point to mention is that China has made substantial investments in its agricultural sector. We simply devised a number of methods for producing more food while working with limited resources.

For example, there is a well-known Chinese man who developed a type of improved seed by changing the genetics and received an international award. In the same situation, this new seed can produce more than ten times the yield of the original local seed.

Thus, we put more time, effort, technology, and other resources into our endeavors. The northwest region of China is characterized by extremely dry land devoid of any water. In order to effectively use rainwater for farm work during the dry season, we constructed a water sailor.

The other thing we do is drip irrigation, and we make good use of all the available resources. There are just too many aspects to it for me to list them all now.

When the land is distributed in pieces, the government in some places tries to use the entire land and bring all of the necessary equipment to do the farming all at once, saving money, time, and human resources while producing more products.

What can Ethiopia learn from Chinese agricultural practices in order to make better use of its resources?

The most important industry is agriculture. Ethiopia is also dependent on it.

I noticed teff is a main product, and it appears that farmers are having difficulty making a living from it. I recently traveled to the Amhara region, Somalia, Oromia, and other parts of the country. I noticed how friendly and hardworking the people are.

Their farming equipment, however, only uses cows; such farming was abandoned in China more than 30 years ago.

When I see this practice, I think to myself, “Is it possible for Ethiopia to develop without using adequate technological instruments?” And I believe it is preferable to bring more technology and do it more efficiently.

I want to be modest. I sometimes admire how they learn this from their ancestors and local wisdom, even knowing the direction of the wind and when it might rain.

However, because I am not an expert in the field, it is difficult for me to speak out without conducting an assessment and a survey. In China, there are numerous agricultural universities with a large number of professors and college students working in the sector.

They are professionals who are learning from both abroad and at home, and they provide an excellent representation of Chinese planting culture. Farmers are constantly being introduced to new cultures, technologies, and skills. We also organize farmers into groups to teach them how to plant properly in order to produce more products.

Another experience is that you are aware that individual farmers are extremely vulnerable and lack the clout and knowledge to bargain with the market and the upper chain. They only sell the original fruit for a very low price. They put in a lot of effort and got very little in return.

There is something in China known as a “cooperative” or “organization.”

It is a unified organization made up of all farmers, and the farmers choose just one or two people to lead their organization and send representatives to determine the prices of all products.

They bargain to determine the market price, and if they work together and make a profit, they split it.

The majority of Chinese practical and recognized engagement in Africa mostly takes the form of investments, loans, and credit provision. Humanitarian commitment to Africa is little known, particularly in comparison to the Western world. What prompted the Chinese government to get involved in such foundations and poverty-relief efforts?

The first point I’d like to make is that the China Foundation is a non-governmental, non-profit organization, and we take great care when discussing political issues. We are always neutral and on the side of the vulnerable.

My personal observation is that, initially, international aid is provided all over the world, particularly after World War II. So there is a tradition, and 40 years ago, China suffered greatly and received significant assistance from Western and other developed nations.

They invested heavily and brought some goods to China. You know, for example, for people like me, I have received an English education from the UNDP.

China was the first recipient of aid, and now that the country has matured and can no longer ignore these countries, it is time for China to accept responsibility.

So, doing business is one thing, and taking on social responsibility is quite another. There is no conflict, and we must proceed.

You earn money and support your people there, but you must invest locally to support the local community, which is natural. Here, we share common sense and concepts with both the government and the general public.

But, you know, because we only recently developed our economy to support the Chinese public, the concept of social responsibility is something that comes from a good heart. China has done a lot to eradicate extreme poverty, but poverty still exists, and people are becoming wealthy in a very short period of time. We sometimes solve the poverty problem, but we still need to work on the nutrition problem.

We can’t solve it quickly because it’s a long-term process.

However, the Chinese government is always concerned with the need to do something for the locals, and they encourage businesses to assist the locals and take more responsibility. It also encourages companies to invest abroad while also taking on social responsibility.

The funds for this foundation did not come from the government; rather, they came from the South-South cooperation initiative.

How much money have you put into Ethiopia?

We used USD two million this year, but depending on the project, the fund may grow if the situation allows us to move forward.

What have you done in Ethiopia thus far?

We want to do a lot of things, but some of our plans have to be put on hold, not only because of the COVID-19 outbreak, but also because of the conflict in Ethiopia.

We are now investing in education, especially in school feeding, panda bag, wash, and solar light projects. But school feeding is the first thing we’ve focused on because we believe the children deserve it and that it’s a basic human right.

In addition, we intend to construct the school kitchen and provide cooking supplies for the students.

We have received funding for it, but we have yet to make a decision.

The city of Addis Ababa has adopted the full standard of cooking that we developed based on Chinese experience combined with the first lady’s local experience. Initially, it was 40 birr for two meals (breakfast and lunch) per child.

We recently visited the Oromia region and plan to visit the Amhara region; we simply want to share our limited resources’ experience, models, and any other relevant information.

Our main goal is to create a model and share it with the government and other non-governmental organizations (NGOs) that want to get involved and contribute to the local community.

Do you believe this school meal can be sustained?

Of course, we will conduct an evaluation, and once we see how the school feeding program is working, we will not suspend it for at least three years. We need to ensure that once the program is running smoothly, we can extend it for more than three years.

But our aim and goal is to keep this school feeding program running from kindergarten to grade eight, and that is how we will proceed.

However, if the government says, “We have money and we don’t need you anymore,” we suspend it and shift our focus to other sectors.

Addis Ababa has started the program, but if you look at mothers’ cooking, you will notice that they only use three stones in the pot to cook the sauce, which consumes a lot of energy and is bad for their health.

They must get up early and are paid very little. As a result, we are attempting to provide more integrated and comprehensive support, such as building and maintaining the kitchen as well as providing cooking materials.

We commissioned some Chinese construction firms to create the design, which we have already implemented in one school.

It is a pilot project, and if it is useful and effective, we will undoubtedly expand it. However, the first step is to obtain electricity in order to provide modern cooking materials, which can also save energy.

How are schools chosen for this project?

We communicate and collaborate with the government, and they know which areas and schools require the most attention. We will go there on the ground and compare one school to another based on their recommendations.

Are you planning anything else?

Yes, there is a Panda Bag project that aims to provide kids with school bags that contain more than 100 school supply items, such as lunch boxes, water bottles, hygiene items such as soap and toothpaste, and all the necessary materials for the students.

Every year, we conduct an assessment by asking children, teachers, parents, and members of the local community what kinds of items they most need and which items they do not want.

We need to make more adjustments if any item is more needed. We make every effort to avoid any political or religious content in this gift. The donation was made in collaboration with the Ministry of Education.

We will send the entire quota to the Afar and Amhara regions this year because they are affected by the conflict.

What exactly is the challenge?

Of course, there are numerous challenges. Each project has its own set of implementation challenges. We have to buy the panda bags from local factories when we need to provide them to the children. We talked, argued, and bargained about the price and shipment from China with them during this process, because we couldn’t find the item in the local market.

Actually, we made it easier for you to invest in it in the local market, but you couldn’t find the right quality.

And something that worries me is that when we try to collect some items from the local market, I notice that they are coming from India or Turkey, and I believe that if we need to invest in the local market, we should get the materials from here, because buying imported materials is very expensive.

Of course, not this year. We paid nearly one million birr per year for the damage in the previous three years because we did not receive the tax-free letter. However, we received this letter this year. This entry was published on August 1, 2010. Yohannes Benti (PhD) began his career as a chemistry teacher for a high school in West Oromia in 1992, the same year he got his degree in chemistry from Addis Ababa University. He has been the president of the Ethiopian Teachers Association since 2009, having been elected three times. He is the lobbying group’s longest-serving leader, having ruled over it for more than a fifth of its existence.

He immediately became an active member of the Association. Before getting his master’s degree in Educational Planning and Management from Addis Ababa University in 2005, he earned a second bachelor’s degree in law from a private university. While running the Association, he got a certificate in Advocacy and Citizen Management from the Coady International Institute in Canada and a PhD in Educational Policy and Leadership from Addis Ababa University in 2019.

The Association has 700,000 members at all levels. For the past six months, university instructors have been protesting about inadequate remuneration and other difficulties, but the government appears to have mainly ignored them. They have even vowed to strike in the coming month if the administration does not present a satisfactory solution.

Yohannes is the president of the association that represents each university’s associations, as well as a member of the Board of Education International, a 32-million international union organization. The Reporter’s Samuel Bogale sat down with him to discuss the concerns of lecturers and the education sector.

The Reporter: What compelled university academics to issue an ultimatum as they request the government to make an adjustment on salary and work grade? Can you tell us what they asked, and why they didn’t get a response?

Yohannes Benti (PhD): The query from university lecturers is on Job Evaluation Grading (JEG) and its implementation, which the government decided to impose for all civil servants in 2019.

There were approximately 65 salary scales among civil servants when the government agreed to reduce these scales in 2010, but it was later reduced to 22 scales in 2019 and applied immediately.

Since 2016, the Association has represented both general education and university teachers in the study to implement the JED on civil servants.

We detected a problem with the scales and wages of general education instructors when it was brought to us for comments in 2019, soon before implementation. We later requested an adjustment to increase their grades from the Ministry of Education, which then met with the Civil Service Commission.

During the process, the requirement for university instructors was disregarded.

What substantial modifications were made to the pay scales for general education teachers but not for university lecturers?

The highest work grade for teachers, regardless of experience, was only six. When the JEG was established, we asked the government to help them improve their grades, and they eventually made it to grade nine.

These are the salary adjustments that university lecturers did not have the opportunity to make. High school teachers with a bachelor’s degree currently earn more than 12,500 birr per month, or 1,400 birr more than university lecturers.

The higher the grade point average, the better the salary.

What has been the reaction of university instructors since then?

They have been complaining during our series of meetings since its deployment in 2019, and have even requested back pay.

Last year, the associations at each university formally developed a list of approximately 14 questions. Our association was then part of a committee that made the requests to the then-Ministry of Science and Higher Education, which was later dissolved before responding to our queries.

The petitions have since been passed on to the Ministry of Education, which is now the regulator of Ethiopia’s universities.

They had complained not just about the JEG and salary scales, but also about overtime pay, consultancy fees, housing allowances, and tax-related difficulties.

Housing has long been a demand of the teachers, and the government has always claimed that it is taking action. So far, how has it been?

Since the implementation of a directive in 2016, teachers have been given preference for housing at their places of employment, either by building on a plot of land or by purchasing condominium homes in cities like Addis Ababa.

University academics are excluded from this due to claims that they were receiving housing benefits, and their universities may be in a better financial position to have their own buildings and house the teachers. However, some city administrations, such as Addis Ababa, have already started offering housing subsidies to their general education instructors.

For teachers, a home is not just a place to live but also a place to work. Regions like Oromia have long been doing outstanding work in providing teachers with houses by giving them land to build on. In Addis Ababa, some 5,000 instructors were also given condominiums.

For the obvious reason that many other people of the community also urgently require homes, the housing question does not receive a prompt response. However, up until the end of the previous year, roughly 110,000 teachers received land on which to construct homes, along with a few condominiums.

The government was recently warned by university teachers to respond to their inquiries or face a strike by the end of September. What is the position of your association on that?

Discussions can help solve issues. Such actions have a significant negative influence, thus we don’t advise them. We should keep asking and be open to the strong arguments we hear while at work.

The administration views raising the scale and compensation as a difficult task, given the current economic climate. The Association also understands the situation.

The homogeneity of pay across various universities is one of several other issues that are currently being addressed. Our Association is attempting to mediate disputes between the government and educators. Both the things that the nation can change and the things that should be put on hold should be done.

Threatening with prerequisites is useless. We condemn that.

The government has been supportive of general education teachers at primary, secondary, and vocational schools, including acts such as granting land for them to build their homes.

We will continue to request the same perks for university instructors.

The government recently announced that universities will have autonomy, beginning with Addis Ababa University this academic year and expanding to ten universities in two years. What are your thoughts on this development?

The proclamation for university’s autonomy has been in existence for a long time. It is unclear how it would be used at all universities at this point, but they are starting with Addis Ababa University and expanding to other campuses. That is something that universities would like as well.

Several teachers work at schools, primarily private ones, despite not having completed the teachers’ training program, also known as the Post Graduate Diploma in Teaching (PGDT). Who are the association’s members and who are the teachers?

Any educator working at any institution is eligible to join. A teacher is someone who possesses the necessary credentials, such as the necessary training, education, and capacity. The worldwide standard is also being followed in our nation.

Not everyone who attended school for a certain field of study is qualified to teach. Additionally, it is essential to possess the required pedagogical skills. Teaching abilities and expertise should be present.

You can’t teach English because you studied it. This isn’t just a problem in private schools.

Do government schools hire teachers who have not received PGDT training?

Sure. When schools experience a teacher shortage, one option is to train applied science graduates in PGDT and hire them in schools.

Initially, the goal was for these graduates to be trained and deployed, but due to an acute shortage of instructors, they were authorized to begin teaching immediately.

This is an issue in both private and public schools. After much deliberation, the government decided to require instructors in both private and public schools to complete the PGDT program.

The requirement that teachers need to fulfill after completing PGDT training has actually been a part of government legislation for quite some time. This training is offered by a small number of universities to all teachers, domestic and foreign. Private schools will be required to pay for their own staff training.

Teachers in universities and in general education are unemployed in northern Ethiopia’s conflict zones. How is your organization supporting these educators?

University professors from the universities in the Tigray Regional State would be able to register online and request reassignment, according to a statement from the Ministry of Education.

Even while we know that some lecturers accepted the risk and continued to work, there may still be individuals in the area who are unable or reluctant to do so.

We have a list of the teachers who were displaced in relation to general education teachers. We are giving a small sum to a few of them as a sign of solidarity.

Our request for assistance in reassigning 43 instructors was made to the Ministry of Education and even the Ministry of Finance, but we heard back that neither the Ministry of Education nor the Ministry of Finance oversee any elementary or high schools.

We will continue to support them while putting pressure on the government to transfer them to any school and location around the nation.

How is the Association, a significant player in the education industry, reacting to the most recent changes and new rules?

The education reform research, which began in 2016, was the catalyst for reform. The public then debated it in 2019 prior to its implementation. University education was expanded to four years, and a national high school graduation exam was administered in grade twelve. In Ethiopia’s justice sector, Tamiru Wondmagegnehu is a colossal figure. He has been working for fifty years and has witnessed four regimes in addition to becoming a walking library. He has a master’s degree in legal studies and international law.

He started out as a judge under the imperial regime and eventually worked his way up to become the vice president of the Supreme Court, Special Court, and High Court under the socialist Derg regime. However, he was detained along with three other Supreme Court justices when the EPRDF seized power.

Following his release from prison, he founded the Tameru Wondm Agegnehu Law Office, which rose to prominence in the nation. Ashenafi Endale Of The Reporter sat with Tamiru to talk about Ethiopia’s legal system.

The Reporter: What similarities and differences can you find between the legal system, the institutional makeup of the judiciary, and its operations under the imperial rule, the socialist Derg, the EPRDF, and the current administration?

Tamiru Wondmagegnehu: The Ethiopian legal system can be divided into four periods: before 1900, between 1900 and 1941, between 1941 and 1974, and since 1974.

Since Derg, we have been ruled by autocrats akin to the French Revolution. Under these regimes, the courts have been altering their characteristics and duties.

Ethiopia’s triumph at Adwa falls under the first category because it is known around the world and has received attention. Four diplomatic consulates started operating right away in Ethiopia. Ethiopia became the only nation of color to be acknowledged under international law.

Following the 1648 Westphalia treaty, Europe came to the conclusion that there was no other nation state than Europe and decided to establish a European nation state. Therefore, only European nation-states were subject to international law before 1900.

According to international law, Muslims and Blacks in particular were not eligible. That is why Europe began its colonization of the western hemisphere, including its policy of rushing to conquer Africa.

No international law imposed sanctions on Europe. They consequently run ferociously to satisfy their need for resources and markets. Ethiopia was the only African nation at the time to have created its own state boundary.

In circulars he sent to England, Germany, France, and Italy, Emperor Menelik described and mapped Ethiopia’s active boundaries. Ethiopia did not draw its border with other African governments, but rather with European invaders. At the period, as to this day, Ethiopia was surrounded by European colonial governments.

What modifications were made to the foundational rules of justice by the regimes?

Fetha Negest, a 500-year-old written code of justice in Ethiopia, was created under Zerayacob’s rule. However, the zufan chilot (the king’s court) was the only institution at the top until 1900. All the officials of the kings judge matters according to their ranks.

Foreigners began to enter Ethiopia after 1900, and Fetha Negest was no longer useful for adjusting to modern rules. The first cabinet was founded in 1900 by emperor Menelik.

The emperor was under pressure from the foreigners, particularly the French ambassador, to create a consular court. Foreign judges were therefore permitted to sit as judges alongside Ethiopian justices after 1900. The consulate court operated from 1900 until 1941.

Emperor Haileselasie I disliked the consulate court system when he returned from exile in 1941. Thus, in 1941, he issued the Negarit Gazette’s founding proclamation for the first time. The second Negarit, which announced the development of a modern legal system in Ethiopia, was released that same year.

Haileselasie gave the order for English professionals to set up police and court institutions in Ethiopia, which were established at the supreme, upper, Awraja, and woreda levels.

The head of the Supreme Court was a foreigner. Experts received their education elsewhere. However, all of the judges on the supreme and higher courts were foreigners. This persisted up until 1965, when Niguse Fithawok, the first Ethiopian, assumed the presidency of the Supreme Court.

The final judge during the emperor’s reign was Hailessilase. After the emperor was deposed, there was a void. Thus, in 1987, the cassation bench was formally constituted.

I served as one of the justices on the cassation bench during the Derg administration.

Derg didn’t interfere with the system of civil courts. However, the government formed the military court system in addition to the already-existing civil court system. It never presented its cases before a civilian court; instead, it either executes its victims immediately or takes them to a military court.

Judges were therefore shielded from political interference.

The judges were fully removed when the EPRDF came to power. It stocked the legal system with cadres and individuals who could advance EPRDF interests. This persisted up until the 2018 inauguration of the present administration. There are several things that the present administration is working to fix.

What aspect of Ethiopia’s legal system is most lacking?

The practice of law is not based on reason but rather on experience. Justice must be acrobatic, just like life. Every judge gains knowledge from the rulings of earlier judges. Of course, some claim that this only applies to “common law” and not “civil law.”

Ethiopia adopts a system of “eclectic law.” This indicates that the principles were taken from several legal systems. Ethiopia’s legal system, however, is a little unclear.

On the one hand, we have the civil law cassation bench. However, a cassation bench’s ruling becomes law, and all courts below the bench must follow the sentence. The model is now comparable to common law.

The Ethiopian justice system has been disrupted by this difference in legal systems. Continuity refers to the use of prior judgments as standards for upcoming cases. Continuity is crucial.

Continuity provides predictability and confidence, two important advantages. Your win-loss ratio must be accurately known before you file a lawsuit. All of the stepping stone articles are already familiar to you. The courts would be unable to accomplish their jobs if every case required an interpretation of the law. A predictable life cannot be ensured by a judicial system like this.

In both the United States and Europe, attorneys provide clients with percentages indicating their odds of winning and losing. Ethiopia is the only nation without consistently applied laws. The main flaw in Ethiopia’s justice system is this.

The court systems and Ethiopian Bar Association must cooperate on this.

The Ethiopian justice system’s organizational structure is the second significant shortcoming. Ethiopia’s legal system was totally centralized, like one sun, one sky above everyone, prior to the EPRDF.

Ethiopia was divided by the EPRDF into nine different states, and that number is currently rising. There was discussion about how to reorganize the legal system after the EPRDF came to power and Kifle Wodajo was selected the leader of a group of specialists.

Some contend that, like prior governments, the justice system must be centralized. But the head of the Indian Supreme Court, Bagwati, present to offer advice, contended that Ethiopia cannot afford a decentralized court system. Others, however, believe that since the EPRDF formed a federal government, it must be decentralized.

Finally, the regional states and nine distinct court systems with nine supreme courts were approved by Parliament.

Ethiopia became the second nation after the US to implement a decentralized judicial system.

Under the US Supreme Court, there are 52 supreme courts. Because of this, America is the nation with the most lawyers. It is a new jurisdiction every time you enter a US state, thus the lawyers have to learn numerous laws in one nation.

The American federal structure is imitated by many countries, including Germany, but not its legal system. A decentralized court system was rejected by Nigeria, India, and many other federal governments because it was too expensive.

A decentralized court system appears advantageous at first glance. However, it is also expensive in terms of resources, both human and governmental. All we can do is hope and pray that Ethiopian leaders will be able to change this and unify the legal system.

How can the two main bottlenecks be eliminated at this time?

The constitution ties everything together. Ethiopia’s judicial system, however, can be centralized despite the fact that the structure is a federal one. India and Nigeria are two prime examples.

Currently, if a lawyer in Ethiopia wants to practice in many regional states, he must obtain a license from each of the regional states. However, if Ethiopia’s justice system is centralized, all of the regional states use the same article. A single license allows a lawyer to practice law across the entire nation.

In comparison to a federation, Ethiopia’s legal system is more like a confederation of states. Such a system is unique to the US, and only they can afford it.

Ethiopia is a small nation when compared to the size of America. Therefore, a decentralized justice system is not needed. It is incredibly difficult to reform and modernize Ethiopia’s judicial system. There may still be ineffective judicial systems in remote areas of the nation even after creating a centralized one.

How can the present border disputes with neighboring nations be resolved given that Ethiopia’s boundary was shaped by colonial powers?

England, France, and Italy all had boundary accords with Emperor Menelik. However, agreement does not imply demarcation. Ethiopia naturally agreed with England but not with Sudan. The current issue with Sudan stems from this.

The Prime Minister of Sudan, Alnimeri, and Haileselasie got along well. Just before the emperor was ousted in 1972, they were about to start demarcating the border. I hope Sudan and Ethiopia will start the delineation process right away.

Emperor Yohannes pleaded with England in the 1870s for assistance in keeping Masawa under control. Even though Yohannes assisted them in rescuing English troops in Sudan who were being surrounded by Mahdists, England refused. Meles Zenawi voluntarily gave over Assab a century later.

This is a huge contradiction.

But the situation with Sudan is becoming increasingly complicated.

As long as the 1972 agreement is in force, it can be resolved. The issue is that the borderlands’ value has increased recently. Ethiopia’s biggest issue is the absence of a succession plan whenever a new regime takes power.

Haileselassie came to an accord and was about to draw the line with Sudan. Sadly, Derg surpassed Hailesselasie. Derg, however, started over after stumbling everything the emperor had begun.

No Ethiopian administration adds on the successes of the preceding administration. Whether it be with the legal system, politics, development, or anything else, this is the root of practically all of Ethiopia’s problems.

Others have suggested Ethiopia may be able to reach the Red Sea via Ras Dumera, a thin free line that runs between Eritrea and Djibouti border.

Africa is home to fourteen landlocked nations. There is no other nation, however, that is as big, and as populous, as Ethiopia. The thirteen African nations that were already landlocked begged the UN to intervene before Ethiopia became landlocked.

Aid couldn’t get to these landlocked African nations. Even when a machine is replaced by a different brand, spare parts still come in. Because perishable goods take longer to reach the landlocked countries, importing them was unimaginable.

In order to negotiate between the African states, the UN tasked Yusuf Ahmed, at the time Ethiopia’s transport minister. This occurred under the Derg, shortly after which Ethiopia became a landlocked country.

A Kenyan academic once stated that Africa shouldn’t have more than 20 ports-accessible nations. He claimed that because even tiny governments are permitted to be countries, landlocked nations are created, dividing Africa into 55 countries.

However, the AU is introducing a very efficient procedure to grant all African nations access to ports. This will become a reality once the African Continental Free Trade Area (AfCFTA) is completely operational.

Of course, until Ethiopia uses them, the ports in Djibouti, Eritrea, Somalia, and other countries on the horn of Africa stay inactive. Masawa Port was undoubtedly a crucial tactic in WWII, acting as a stepping stone for the allied troops’ advance into Eastern Europe.

Currently, Ethiopia is attempting to enter Berbera port, which is positive.

Haileselasie made every effort to integrate Eritrea into Ethiopia in order to get access to the port. Assab port is obviously useless if there is a blockade of any type at the Suez Canal or Babel Mandab. Ethiopia is better off using Berbera port. There is nothing anyone can do because Berbera is the gateway to the ocean.

How can Ethiopia’s efforts to secure ports be impacted by Somaliland’s de facto status and lack of recognition?

The issues in the Horn of Africa can only be solved by peace. The horn has a sizable population. The chaos persists if this force is not used to development. Countries in the Horn of Africa must work together for the benefit of all.

The fewer jobs we produce, the more unstable we become.

Why do young people join OLF-shene, TPLF, or other armed organizations when they could get a respectable job, a home, a car, and vacation packages? Everyone wants to see equal development because they want to see their own country prosper.

Progress can lead to peace.

Due to the absence of an independent African state at the time, Haileselasie was banished to England. For that matter, there was no state.

Many people agree that Africa’s instability stems from the distribution of the same ethnic groups among its various states. Can African countries redraw the borders that colonial forces drew and reestablish nation states?

Ethiopia was at the vanguard of African decolonization in 1963, when the Organization of African Unity was established in Cairo. The main issue when the UN decided to decolonize was how to recognize and define the borders of African states. War was imminent amongst Africans if they had to trace frontiers back in time.

The UN and OAU ultimately opted to keep things as they were. In other words, borders and states begin at the location of the colonial boundary.

Each nation in Africa has territorial claims. We can’t, however, go back in time and fix it.

Ethiopia once ruled a sizable region, including the modern-day nation of Yemen, during the administration of King Kaleb in the fourth century. But we can’t claim it now.

The answer is that by uniting Africa through the AfCFTA, the AU’s economic integration agenda can eliminate the need for political frontiers.

Of course, Ethiopia is the nation that will be most negatively impacted by the status quo. The Congo, a sizable nation abundant in natural resources, was about to become landlocked. However, they were able to enter the Atlantic Ocean by Kabinda that was incredibly small. By the way, Congo provided the uranium for the bomb dropped on Japan.

A little opening between Djibouti and the Eritrean border allowed Ethiopia to reach the Red Sea. However, nobody is willing.

A serious hunger broke out during the Derg, and Nordic nations wanted to send aid cargoes. However, there was no way for the supplies to reach Ethiopia. Nobody would have protested if the Derg had taken one of the ports in the Horn of Africa at the time by force.

Ethiopia’s survival will depend on how its ports are handled in the current context of rising import volumes and growing population. It will either receive a peaceful response or a harsh one. Ethiopia must have a port, if only to use the congested route between Eritrea and the port of Djibouti.

The Ethiopian government also has to improve diplomatic connections with the surrounding nations so that they will consent to us establishing our own port.

Do you believe that Ethiopia’s conflict and ongoing instability are a result of the country’s power structure?

Ethiopia’s primary issue is underdevelopment as a result of missing out on the Enlightenment, the Industrial Revolution, the Agrarian Revolution, and the Technical Productivity Periods of the middle Ages.

According to Gibbon, who lived two hundred years ago, “the Ethiopians slumbered for over a thousand years, oblivious of the world by which they were forgotten.”

Of course, since we remained closed, we were not colonized. The mountains of Ethiopia were impenetrable to any force. Due in part to the progress that colonizers sparked, several African nations outperformed us.

Ethiopia nevertheless continues to be rich in resources and treasures. The only nation in Africa with a written past and its own alphabet is Ethiopia. 80 percent of Ethiopia’s bibles were completed and authored in the sixth century. At the time, the western bible was still in its infancy.

Additionally, Ethiopia was crucial in the spread of Islam and Christianity. Ethiopia was the destination of the first Hijira, not to Meca and Medina.

Unfortunately, because we were isolated for a millennium in between, Ethiopia’s civilization did not maintain its early impetus. We woke up when the world is already way ahead of us. We were still plowing the ground with oxen and yolk when Ethiopia awoke once more.

Youth in rural communities no longer have access to land for farming as a result of the land policy. Therefore, everyone is moving to the cities. Not only are Ethiopian towns crowded, but the proportion of farmers is out of proportion to the country’s growing consumerism.

Unemployment is widespread. There is a shortage of farmland. Ethiopia’s current issue stems from this. For the first time, PM Abiy Ahmed is attempting to spread large-scale agriculture to lowland areas in addition to the rain-based, often small-scale farming in highland areas.

What do you think of the administrations ongoing judicial system reform?

We voluntarily submitted to Ethiopia’s complicated legal system. One institution cannot bring about justice system reform. Huge amounts of public resources are being used by the decentralized justice system.

Ethiopia cannot support a decentralized judiciary when dozens of regional entities each have their own legal framework. This has to be combined.

Abiy recently complained to the parliament about how corrupt the legal system and police are. A few judges have been furious. It is well known that some judges accept bribes. Even judges of the top court experience this.

It is incorrect to hold the PM responsible in a legal system as tainted as Ethiopia’s. Though it is a challenging undertaking, we must find solutions to fix the issue rather than pointing the finger at one another.

The Court has the most authority in any nation that wants to advance. The future of the nation, business, and daily life depend on the Court.

What big setback do you believe has occurred since PM Abiy came into power? Was the transition peaceful?

We must research the causes of our ups and downs. Ethiopia has not done a very good job at nation-building. There are distinct state borders in Europe. However, the societies are very interconnected and quite similar. They are similar in terms of culture, languages, and universities. But the Ethiopian society has been segregated from one another, living in separate cultural enclaves.

Social media is currently dividing our society even more and pitting everyone against one another. Nobody is accepting accountability. We have much work to do in order to build a civilized society.

Ethiopia’s unemployment and unrest don’t surprise me because I am aware of our incapacity to provide quality labor and excellent jobs.

Five years ago, nation-building and good governance were the social movement’s top demands. Today, the issue has expanded to include the state’s continued existence. The student movement during Haileselasie began with a “class struggle” and concluded with ethnic politics in a similar manner. Why do political groups in Ethiopia consistently fail to achieve their goals?

Due to the students’ limited exposure to other ideas and the “class struggles” popularity in Cold War-era politics, the students’ movement adopted it. However, the class battle diminished and gave way to an ethnic conflict, which Meles Zenawi pursued.

Many Ethiopian academics today, particularly those in the diaspora, believe that ethno-nationalism poses a threat to the state’s very survival.

This indicates that the nation-building process in the country has been derailed by ethnic identity politics, which is having an impact on both the nation-building process and the state’s very existence.

Nationalism is not necessary for Ethiopia. The United Kingdom, France, the Netherlands, and even Italy are examples of nation states. The US, however, is not a nation-state. Europeans make up half of the American population.

One hundred years ago, Ethiopia became a nation-state. However, due to a number of criteria not being met, Ethiopia was unable to become a nation-state.

Many academics, particularly those from Addis Ababa University, continue to vehemently inform the media that Ethiopia needs to become a nation-state.

Talking about nation states now is a farce. Instead of a nation state, Ethiopia needs to be a patriotic state. Everyone in their own ethnic group is patriotic. Every Ethiopian, including Oromo, Kembata, Amhara, and everyone else is a patriot. That is what the United States is.

Everybody is present in America, including Latinos, Chinese, Indians, French, and Blacks. However, they never give up on the United States, which is their nation. Although they are patriotic states, they are not nation-states. To advance a patriotic state, we must work together.

In Gojam, there is no such thing as a pure Amhara. Every ethnic group has ancestors from different ethnic groups. Only our names reflect our racial origins.

Ethno-nationalists and ethio-nationalists swing back and forth in Ethiopia’s politics all the time. This constantly sparks conflict and a struggle for dominance. How can we transform it into a nation of patriots?

The constitution may impose restrictions on it. It can be written into the constitution if everyone agrees to it. Otherwise, Ethiopia will experience civil conflicts and revolutions.

Many people concur that the majority of Ethiopia’s issues can be resolved if the present constitution is altered. Do you agree?

It should be altered, in my opinion. Both educated and uneducated individuals are condemning PM Abiy for sticking with the current constitution. The constitution is frequently compared to an Ark. If the public does not believe in the law, it is just a piece of paper.

Therefore, if a carefully considered constitution is substituted, Ethiopia’s issues can be resolved.

Human rights advocates and even government representatives claim Ethiopia’s judicial system, especially the court system, is unprepared to handle cases involving human rights violations. They advise Ethiopia to start accepting the jurisdiction of extra-national judicial systems as a result. This means that Ethiopia must recognize the authority of regional and international tribunals over any violations of human rights.

Does doing so undermine Ethiopia’s sovereignty?

Only when the executive, judicial, and legislative branches operate in accordance with the check and balance principle can Ethiopia’s justice system be said to be in operation.

Judges are only answerable to the law. Because I criticized the Derg’s military court system, I was removed from my court position. Since 1948, Ethiopia has fully embraced the rule of law. Judges must, however, exercise their authority.

Courts have full authority to resolve any dispute, with the exception of arbitration disputes. Ethiopian courts have the authority to adjudicate matters involving violations of human rights, particularly at the high courts and Supreme Court.

The establishment of a different type of court system in Ethiopia must be spelled out in the constitution. For human rights matters, we can set up special benches, but we cannot establish a separate court or division.

The UN human rights commission is currently requesting entry to the country in order to examine human rights abuses that occurred during the Tigray war. The agreements and treaties were approved by Ethiopia. What would happen if Ethiopia resisted?

We have observed that the west consciously wants to harm Ethiopia in numerous instances. Since the founding of the League of Nations, this has been the case. Sanctions are being imposed on Ethiopia.

Mussolini would not have been able to attack Ethiopia if only the US had imposed gasoline sanctions on Italy. Because the US continued to supply fuel to Italy at the time, Mussolini resumed the invasion.

Ethiopia was brought up thirteen times in UN Security Council discussions last year.

International law thus serves as a vehicle for both justice and abuse.

The US regularly uses the UN to impose sanctions on nations it wants to destroy.

Never should Ethiopia yield to outside pressure.

Ethiopia has ratified a number of international human rights accords and conventions. By the way, Theodore Roosevelt’s wife was the one who first proposed the 1948 Universal Declaration of Human Rights (UDHR).

It forbids the use of cruel or inhumane punishment. Ethiopia had a death penalty at the time. The emperor delayed ratifying the UDHR rather than repealing the death penalty law. Ethiopia, however, is the first country in Africa to sign the deal.

Politics is at play right now, not just a general worry about human rights abuses. Before authorizing foreign investigators and acknowledging their jurisdiction, it is imperative to exhaust all domestic options. Extra-national venues may be taken into consideration if there is no statute allowing human rights victims to appear in court or if the court is unable to uphold the law.

America commits to defending democracy. Democracy is the majority’s way of ruling. Therefore, by simply agreeing, the majority can flip the truth on its head.

Can the Chief Justice of the Supreme Court call the executive to inquire of him or her? How are checks and balances made?

The Chief Justice of the Supreme Court lacks any judicial or executive authority. The president only serves as the court’s speaker. The president only responds when asked.

By the way, a judge on the Supreme Court is distinct from a judge in a lower court. The author of ye’ ewunet Mirkuz, and a lawyer, Wondimu Ibsa was born in 1947 in Arsi. Having survived the 1969 revolution, he joined Wez League and then started teaching. In his career as a former politician, Wondimu had gone through several challenges as a former politician before becoming a lawyer. He survived the 1969 revolution in Ethiopia and was arrested in the famous Maekelawi for 150 days. When he decided to become a lawyer, his first task was serving political prisoners facing terrorism charges. Lately, he is more known for sharing his political views on main stream media outlets. The Reporter’s Selamawit Mengesha sat down with him, as he reflects on current affairs and his journey in politics of Ethiopia.

The Reporter: can you tell us a bit about yourself?

Wendemu Ibsa: I was born in what is considered a large family. I had 17 sisters and brothers and my father had 47 children from 3 different women. When I was growing up the schools in Arsi used to encourage us to learn Amharic. And some people associated it with racist remarks but it was purely to help us learn other languages.

I was amongst the students who survived the 1969 revolution, I was in ninth grade and I remember crying to my mom when soldiers would beat us senseless. When the ‘edget behibret’ campaign started, the Ethiopian People Revolutionary Party (EPRP), wez league (ወዝሊግ) and All Ethiopians Socialist Movement (AESP) were wreaking havoc across the country.

I joined senay leke’s party Wez League. Students whose average was above 90 were selected to give after class courses back then, for which I was selected. I started working as a teacher starting from 1969 to 1971 with a 180 birr salary. Through all of this, we were running the revolution on the side.

I’ve went from having my parent’s religion to having no beliefs but I eventually got baptized at 40 years of age and became an orthodox Christian. I then worked as a money collector at the church for four years.

I was also detained in the famous ‘Makelawi’ for 150 days, when EPDRF took power in 1983.

I’ve also worked as a supervisor and a director in Hawassa. As a lawyer in Adama, I joined the Oromo Federalist Congress in 1998–2002. In 2006, when more than half of OFC members, including Merara got arrested, I decided to give my services as a lawyer. Back then, lawyers used to charge more than 300,000 birr to represent people accused of terrorism, because representing people accused of terrorism could label them as terrorists as well. Knowing this, I offered my services at makelawi for free, and since then I have represented 600 people accused of terrorism.

When I was serving free of charge, I faced a lot of opposition from people including my family. I remember a judge telling me that I can’t defend people charged with terrorism anymore, but 17 of my colleagues had already decided to represent those accused of terrorism.

Prime Minister Abiy Ahmed (PhD) has said they will not arrest anyone without due diligence, yet we are seeing a lot of people arrested abruptly and detained for several days without cause. What do you think changed?

“We don’t arrest without due diligence,” is just a political way of speaking. Currently, the parties in Ethiopia including the incumbent follow a party politics system, meaning it is the top executive’s playground. A political party stands for justice for those that are with it or against it. The parties in America, the republicans and democrats, are political parties, while Prosperity Party, Ezema, ABEN, Enat, amongst others, look like they are trying to shift from party politics into political parties.

A lot of Ethiopians were involved in the green legacy campaign. But out of the 53 parties, not more than 10 were involved. Why weren’t the rest involved? The legacy is not for the PM but rather for generations to come. They could have contributed to something that made a difference but the only objective of party politics is to obtain power.

When Abiy said that, it was in the essence of party politics. To whom does the PP belong to? Is it for the prosperity of the city, the rural area or the farmers? It should have been called “Ethiopia’s prosperity political party.”

Political parties care about the country, its people, history and culture. Even if political parties try to gain power they still stand for the people. The Civil Code, which has been in action since 1952, says that people can be arrested based on suspicion with or without a court ruling. Back in the feudal days, it was only allowed to arrest suspects from 6 in the morning till the sun sets but not after even if they were guilty. Police can surround him but they can’t arrest him, no matter who the person is. If Abiy does not practice this law, then the EPRDF and Derg’s plague hasn’t quite left his system yet.

The practice that is becoming normal these days where they hold people in prison for eight or nine days is not acceptable by law. Statements like “We don’t arrest without due diligence” are said with a political intent. Politicians and political parties think about what to say to get more applause instead of thinking what would actually benefit the people.

What is the cause for the killings of innocent people in Ethiopia? Who do you think is responsible for these acts?

The instability in Ethiopia has its roots dating hundreds of years back, back when colonizers had their eyes on Africa. The victory at Adwa was not just a victory against Italy but against the whole of Europe. Ethiopians used to unite to defeat these outside forces. When the west found out the secrets to Ethiopia’s victory happened to be in our unity, they needed to dismantle this unity through civil wars and parties. These parties who have a budget from the west have the sole purpose of creating conflict and rift between ethnicities.

Controlling the source of income was also a measure used by the west since the country is dependent on donations. After the 1945 World War, Japan was forced to adopt a strong military system. Within 30 years, Japans capacity was just as good as the UK, after changing the policies they were forced into. The donations are an indirect attempt at colonization.

The crimes we’re witnessing today is a result of years of planning by the west. There is this thought process circulating where people think their ethnicity came first or that it is better.

Even banks organize themselves based on ethnic lines; they have the “divide” mentality. People that are losing their lives are Ethiopians and there is no need to classify them based on ethnicity. Being proud of your ethnicity only validates Ethiopia more, because our ethnicities are found within Ethiopia.

If we take the religious approach on how humans originated, it started with Adam and Eve. They were human beings and not Amhara or Oromo. We are Ethiopian’s first then ethnicity follows; so, to refer to the atrocities in Wollega as atrocities committed on Amhara women is accepting the narrative pushed by colonizers.

Amhara’s policy is Oromia’s policy and vice versa; we can only salvage Ethiopia when we stand all for one and one for all. Being Oromo, Amhara or any of the other 80 ethnicities is natural but claiming one is superior over the other is immoral.

How do you think this can be mitigated?

Parties and politicians that stand for terrorism should be dealt with to make way for the people to have an active role. The government feeds 1.7 million students in Addis Ababa and its surrounding. It provides books, uniforms and bags. The only thing families worry about is providing the dinners. This is not something to overlook. When I say this am not saying prosperity party or Dr. Abiy are without flaw, all governments have flaws.

The community’s outlook on laws and courts is relatively better than it was before. Do you think this has anything to do with the organizational change? If there is change since most organizations are individualistic, how can that be mitigated and continue long after the individuals have left?

Prosperity Party asks organizations to help it achieve democracy. A strong military can only be formed when there is a strong organization. Law enforcement is the government’s duty while respecting the law is everyone’s responsibility.

In a meeting amongst 1000 lawyers in Oromia held by the Oromia Lawyer’s Association, a lawyer said “there are no courthouses in Oromia, or judges. The only place where judges and courthouses exist is at the Oromia Supreme Court.” But there are Oromo judges and courts in Ethiopia. If we’re accounting for injustices, then every other supreme court could come into question. The acts of a few lawyers and judges that are deeply intertwined in ethnocentric beliefs do not dictate the profession as a whole. Even the PM has no right to misjudge the profession because there are honest judges and lawyers.

What should be done to promote accountability? Would people who have violated human rights be questioned in the court of law?

The current atrocities are due to terrorists, whether they are Oromo terrorists or Amhara terrorists. Both cultures have their own way of justice that involves forgiveness. The involvement of the elderly is needed.

Political parties are creating a better life for their children while condemning the innocent. Those responsible for these acts of terrorism shouldn’t be judged in court. All the region’s religious leaders and elders should judge and reconcile things themselves.

The newly formed National Dialogue Commission plays a vital role for this, but political parties have been skeptical since its inception. If all Ethiopians come together, it will help the national dialogue to be successful. As politicians put it, the dialogue is not one carried out between parties but one that involves farmers that make up 85 percent of the population. As of now racist politics and ethnocentric politics have spread.

The current problem will not go away easily. It will take several years of working together.

There is a noticeable change in courts after Meaza Ashenafi took power, but there are also a lot of problems at the same time. Just like how a teaspoon of poison could ruin a barrel of water, the acts of a few taint the entire institution.

How can we stop the problems in all the regions of Ethiopia? How can the region’s questions be answered while maintaining peace?

The people should give information as a way of solidarity with the government. The 547 representatives at the Parliament represent 120 million people. For a parliament member to talk about their own ethnicity alone is really shameful, they are not there to represent the Wereda that put them there but to represent the people of Ethiopia.

If there are people in Parliament that spread fake news, then prosperity party is negating its own progress. There are a few that are openly opposing the death of fellow citizens. When a citizen is hurt in wollega, there should at least be an opposing brief against it from the Parliament. If prosperity is leading the country, a region’s Special Forces should be able to help another region’s army. The defense force alone cannot save the country.

Rophnan Nuri, commonly known as Rophnan, is a prominent performing artist, musician, DJ, singer, songwriter and an audio engineer that blazed a trail for Ethio-infused electronic and house music. The Artist made a name for himself as DJ Rophi before releasing his first album, Reflection, in 2018. The album made him the first ever artist to release an electronic music LP in Ethiopia, becoming an influential figure locally and internationally.

Mixing traditional sounds with futuristic undertones and a powerful lyric, he dedicated his debut work as a voice for his generation. His work earned him multiple awards, featured with world famous groups like Major lazer, and collaborated with the Zambian rapper Chef 187 on the coke studio stage. He also held a successful country wide tour for a year and half.

His work and demeanor has earned him a feature on Forbes Africa’s 30 in the creative category, making him the first Ethiopian to feature on the list.

He recently released a successful album “3” earlier this year, which he followed up by “6” this past week. The two albums, which were released after his deal with Universal Records, offer incredibly produced music directed at the youth.

Rophnan announced the final album of the trilogy will be released before the end of 2022. Yosthena Aynalem of The Reporter sat down with Rophnan to talk about the mystery that is Rophnan Nuri.

The Reporter: let’s start from the beginning. Can you tell us about your upbringing and how you got into music?

Rophnan: Funny enough, it did not start out with music for me. Yes, I have known and loved music all my life but my journey did not start there. I am a singer but I am not just a singer, or just a writer. I am a recording artist that engineers and produces as well, but I am also a DJ. I think when you’re all of these things your journey must start with one thing. For me, it was recording.

I started recording sounds from a young age and little by little I went from recording to learning the guitar, DJ’ing and then singing. It all unfolded gradually to make me the artist I am today.

I remember I started recording my mom when I was 10 years old. That was my first experience of getting into music. Because to me it wasn’t just music, I thought everyone had the same relationship with sound and music as I did. Through time, I came to realize that not everyone was drawn to it the same way. At that age, I used to perform in front of students and they would love it, but I thought that was normal at the time.

I started recording my mom out of the love I had for her, I would use tape recorders that I make from scraps; I have always been a physics head because it helped me know the world better. I would always make things up from run down electronics or collect parts like dynamos; I have always been that kid.

I always wanted to keep a record of my mom’s voice in my tape recorder, so I’d play it on repeat until my battery dies and that was a 10-year-old me falling in love with sound and frequency. From then on, I started recording my little brothers, my neighbor’s kids, and my friends.

It became my way of keeping a photograph or picture of some frequency, those records painted pictures in my head that ensued emotions in me just like a picture would. I have recorded my mom till my last conversation with her, she is not here anymore, but I’ve kept her voice till our last conversation, so I have basically recorded my mom for 21 years.

So, how exactly do you experience sound?

I always see colors when I think of sounds, even when I am asked to do commercials. I will always ask them what their theme color is so I have a sound for that color. Every color in the way it’s painted or crafted has the same pattern in music because in order for something to exist it needs pattern. Music and creativity have a pattern of their own. A very good example for this is the project I did in Dorze in my first album, it was literally the pattern of their denguza (Welayeta Traditional Cloth) that inspired the music, and it is a mixture of black and red patterns.

So, the pattern on this attire is that when one color goes in, the other goes out, their song is the same way, so you can represent the color in different voicings and you have a pattern which is a harmony and the Dorze people are one of the most harmonious people and that is one of the things I learned from them.

Harmony is everything. It is embedded in their music, their day today life, culture; they know how to sing and be in sync within. That is how I see sound no different than pictures or any creative work.

What classes have you taken to master your craft?

Endless practice and my experiences were my lessons. I remember building my first studio with Abu-Walad biscuit box and Miyota DVD microphone when I was 13. I continued performing in class rooms and jamming, and I have also been listening to FM Addis 97.1 from the first day they opened. Eventually I started working there for three years later on in my life.

I think I was 10 or 11 when they started and from that moment on, my whole teenage time was spent listening to a lot of radio. Radio became a huge part of me, sound was everything because my experience is my mom’s voice but I started hearing her voice through other moms. Even when I travel and record, I know that tone, it has the same spirit.

A sound does not lie. That is why mostly my music is based on tone and notes. These are my inspiration when I make my music especially when I am trying to go deeper in the culture and get something out from it.

At what point did you start DJ’ing?

I started DJ’ing or I would say playing in mini media at the age of 15. I got introduced to computers at the same time and realized there is a thing called “software,” which allows me to record vocals and play with instruments that are already recorded, make patterns out of them and make music. So, I started doing that when I was 15.

What most people don’t understand is the reason my recordings are clear is because I’ve been recording for 21 years. I am more experienced than most people who are in my age group. I have been producing for 17 years now and I just turned thirty-two. So the reason why my production is this good and I am getting better every day is because I have been doing it for a long time. You have to understand that this recording, this clarity and this skill doesn’t come easily. You have to work on it and you really have to put your time.

When I turned 17, I actually started DJ’ing. I got introduced to a DJ mixer. I put out my first mixtape when I was 16, remixes of songs at that time, whether Amharic or English, I literally did what I used to do in the classroom and changed it into a record.

I already had recorded data in my head and the computer allowed me to turn that into a recording so I started DJ‘ing that music. It was a way to put my music out. It became the best platform for me instead of being a guitarist, a vocalist or anything else. DJ’ing was the first introduction for me to put my music out and then it goes on to working in Radio.

I used to play my mixtapes on the radio when I was 18, 19 or 20 and that gave me the platform to be famous. After that, I put out my second mixtape and then I continued producing even more, production has been there since I was 15 till now.

When I turned 21, I stopped putting out mixtapes after the third one because I wanted to do an album of my own. It took seven years of my life in the studio, worked day and night, 16 hours a day, every day, while DJ’ing at night and paying rent. That circle went on for seven years straight and then Netsebraq was born.

I went from 21 to 28 years old doing nothing but producing, learning how to write, learning to sing better, learning how to record, buying new better equipment, working on myself and my craft. It took everything out of me.

That is why Netsebraq sounds the way it does, it was crafted from scratch and I found a new sound for my generation the world has never heard of, a new sound for my country and for the industry and that took time.

I found myself in music, in a new way of writing, progression, of sounding, recording and all this took time. It was not just a project. Its impact can be seen through DJs coming into the mainstream, singers to find themselves. I hope I am not fooling myself when I say this but, I think Netsebraq proved to artist to be themselves and to sound like themselves. It brought free thinking to this industry but it didn’t happen overnight. It was something that was crafted for a long time.

When was the first time you Disk Jockeyed professionally?

I started doing my own Day Party’s after high school in college where I started throwing parties for people in my own age group and a lot of people came to my sessions. Back then, there was no platform you can use like Tik Tok so people just attended my parties using flyers and a lot of people showed up because of the mixtapes I used to release. At those parties’ attendees didn’t pay attention to the music, just how it made them feel, they don’t really understand the craft.

Out of the whole experience, what has been your favorite part?

Definitely my first album release party, because I had been working none stop before that and when reflection happened, I was famous in most cities as a DJ. I would go to Arba Minch and pack a place of 2000 people, as a DJ I was doing really well. I was making good money and had good exposure as well, especially on the last year before Netsebraq.

Netsebraq brought me to the stage as a singer, song-writer plus a DJ. The DJ part has been subtly following me. But my first album release party was a very special moment for me. It was three months after the album had dropped and the place was packed, people were at the gates lined-up because the place filled up early.

All of that happened within three months and it was very historic. An up-and-coming artist, who is a DJ, selling out a concert was not common; it was unheard of then. For me it was a moment I will never forget, because I remember the energy that night. I had never seen an energy like that in my life, that made me think to myself “oh wow, I have made it this far.” Seeing people sing along to songs that I wrote felt surreal, something I created spoke to them enough for them to know it by heart and that truly astounded me.

To answer the question, the release party truly stands out for me, especially when I was playing the piassa song. I remember time freezing, my friend and fellow DJ, who I grew up with, was back stage with tears in his eyes because of how amazing it was. We used to walk back home after DJ’ing because the first two years of my career, I didn’t have enough money to even pay for my taxi-fare home, so we walked to places instead. I dropped opportunities my family offered me to go to the US, I dropped out of Piloting school after completing almost everything, and I then joined computer school.

And were your family supportive through all this?

Well, my brother wanted me to go to Pilot School, he was ready to pay for it and arrange everything. I went and did everything, I didn’t think I would get in but then I ended up getting in. When I did, I went to my mom and told her that I made it in, that I could follow this path and that I didn’t think it was for me.

The only thing closer to music for me at that point was computers and I would rather go and study that. And she was very supportive, she said ok and that I should be careful. My family had always been supportive of my aspirations which I am forever grateful for.

I remember when I finally got the deal with Universal Records, the first thing I did was to tell my mom and record her in the process. She was always willing, she never turned me down. She was always there for me, had she said no to me backing out of pilot school back then, I would not be where I am today. Rophnan, as a musician would have never existed. I am forever indebted to them for that.

My father on the other hand used to always tell me “Whatever you do, sell it.” He never told me what to pursue or to stop music just that I should do what I love and whatever that is I should sell it. He raised all of us like that, if you love something learn how to sell it, so you’d learn to perfect it and love it even more. Selling it would give you the money, time and opportunity to grow it and polish it into something better.

If I never sold my first mix tape, even if my first salary was just 500 birr, I wouldn’t have had the resources to support my endeavors down the line. Money is money no matter how small it may seem; it will serve as a stepping stone. I am not saying to just do it for the money but you have to account for your time with something; gain something from it, no matter how small it may seem because your time is the most valuable thing you have.

You are currently amongst one of the top artists in the country, yet you are very private, not very active on traditional media but you’re also active on social media, why is that?

I wouldn’t say I am private, because I am always posting. People know what I eat, what the studio looks like, where I work out, when I’m working. If you ask an average person who follows me on social media what I do, they’ll tell you that “he eats healthy,” I go to gym at midnight.

But as for media, I usually don’t go out unto media because I don’t really have anything to say. I have been away from media for around two years now and that’s mostly because I didn’t believe I had anything substantial to say and I don’t want to come on and lie, so I chose not to say anything.

I am the kind of person who likes to understand people’s truth and delve in to it. I believe a lot of truth is subjective and I am open to hearing other people’s truth but I know that a lot of people don’t see it that way.

What I consider my truth might not be what people want to hear. So, if I were to come out on media and say what people want to hear and not my truth, it would be a lie. I never want to lie to my fans; that is disrespectful. I would rather communicate with my people through social media and show them what I hope would inspire them, show my craft and take them through my creative process. And when this album comes out, it wouldn’t be alien to them because they saw the work that went into it through my social media posts.

I would rather communicate through that because who am I to comment on things I don’t know and understand.

I know and understand that everyone also has their truth that they’re exposed to and I am nobody to negate or support that. Until we all find a common ground of saying I respect your truth as much as you respect mine, I don’t see the importance of going out in public and creating controversy instead of looking for a solution because we can see that nobody is listening to anybody anymore.

Everyone is looking for voices and opinions that confirm their truth instead of openly listening to everyone unbiased. So, of course I am private, because I have nothing to share that my fans don’t already know. I am just as confused as everybody else and if I can’t help, I would rather listen and try and learn about everyone’s pain and truth.

And to me, music helps me do that.

Interesting, steering a bit off topic, you’ve mentioned you regularly attend the gym at midnight, why do you do that?

For me, it’s more mental than physical, because I don’t want my studio to be the hardest thing that I do in my day. Because the hardest thing is always seen in comparison, the hardest part of your day is the most dreaded part no matter how much you love it.

To not lose the love, I thought I would create something more challenging for myself. Now for me, the studio will continue to be more exciting because it’s not as hard as getting up at midnight and going to the gym. Contrary to what most people would think being in the studio is very tiring. You sit there for hours and hours daily; the not knowing of what will come out of each session creates a lot of anxiety as well, so when I add the midnight gym on top of that, I would have a much harder thing to do, which pushes me to like the studio better.

I needed that push because I had to finish three albums in two and a half years. It took a lot out of me and not just me but it took a lot out of my management as well. To deliver three albums in this time frame was really hard. Normal working hours don’t quite cut it.

Back in the days, it was really hard for artists to make a living off of music but the tides are changing now and artists like you are making a difference in that. What do you think propelled that change from your part and your peers as well?

I know it is getting better comparatively but it is not on the trajectory it needs to be at. There are still artists that are not earning their fair share but I think YouTube democratized so many things. It gave the power to artists to some extent. What got better is not the payment but the exposure. Artists get to be discovered in a quicker, better way.

As for back in the day, if the person who worked at ‘hire treat’ did not like you personally no one would know your name. Now, we’re exposed to more artists because we have access on our own terms. Young artists have better platforms now and bigger exposure where their music gets the chance to be discovered by many.

For me personally, I am rooting for all of us. When I hear an artist getting paid a million birr or dollars for music, it makes me ecstatic whether I like the music or not. It makes me so happy because the industry is getting paid this much, which is a win for all of us. It would mean fewer artists who are unable to support themselves and their family through their craft.

At least they would set a standard of artists earning a good life. I think what is happening is there is the YouTube market that is supporting local artists. Even if the public isn’t directly paying for the music, they are exposed to it at least. There are platforms that would support artists even more like Awtar but people barely use them.

When people buy the music, the artists will directly benefit from that so I encourage listeners to get their music from platforms like that. I think that is the main market but for now, YouTube works wonders for the industry.

What are your thoughts on people saying Ethiopian music died after the golden age? Some might say today’s music is more diverse and the time for it is now. What is your input on that?

Whoever says the time for Ethiopian music is now, I just want to say that I appreciate you all. Because a lot of people discourage what the industry is right now, saying it could never amount to what it was back then. The way I see it, if you grow up listening to any type of music, even if it’s just whistling, you’re going to have an attachment to it because it would be nostalgic.

It is hard to compare today’s music to something that has been part of people’s memory for 40 plus years. There is a lot of memory attached to it that can’t be compared. It is like expecting a new born baby to win a race against a 40-year-old, if you were to give 20 more years to the new born they will definitely win against a 60-year-old.

So, if you give us time, we too will have that nostalgia factor that would make us amongst the classics in people’s mind. Every generation has a favorite and it mostly has to do with the memory attached to it. I think it has more to do with nostalgia rather than production, quality. The golden age music was well produced, very powerful and well written too but I don’t think they need to be compared with today’s music.

Today’s musicians are very creative. They too have things to say, they too are well written; the people making the comparison probably grew up with those songs and they might not understand today’s music. Not understanding something does not make it lesser.

Considering artists back then, even the greats, did not put out a lot of albums or singles when compared to today’s artists who put out music more often. Why do you think that is?

I think it was very hard to put out albums back then than these days. But artists suffer to put out albums these days as well. There are easier platforms to make and sell your music on but I think artists are still suffering in a sense that studios are not easy playgrounds to play on.

The industry still does not really pay creatives; studios, composers and writers are not paid the right way. So, until that day comes, don’t expect too much creativity because creativity is also run by the freedom of time that you can make music.

If I am not getting paid well, I’ll just do something to pay my rent. Something that is easier. That is why getting paid can make a difference. When I say this, people might automatically say in the 60s they were not paid but they did so many things, no they were hired by the government.

These writers were hired by the Ethiopian National Theatre, Ras theatre, Cinema Ethiopia, and all those bands in mazegaja were hired and they were workers who were paid a monthly salary especially during the time of Haile Selassie I. That’s their actual job. They were workers who went in at 2 o’clock and left at 8. Most of us are self-employed so that also has its own impact on what you’re going to do and what you’re going to deliver to the art because you can abuse that freedom as well.

In general, I don’t agree with the comparison and I don’t think it’s fair. My generation is putting out a lot of good stuff. Think about it, if you call your days the good days and things were so well in the 60s and everything was nice, then why you would expect better things from me then, while you understand I’m living in a worse time.

So, coming to the new album, you said earlier that you were into physics; does that have anything to do with the 3, 6, 9 and the universal numbers?

Yeah, I mean you have to understand the Orthodox Church has a big explanation over this because it has a lot of knowledge about the world and the universe and everything from ancient times, but also those teachings were spread throughout the world in different ways and one of the people who understood this in early times was tesla.

He brought this idea of these three numbers being the key to unlock the universe and to understand the whole thing. If you understand things from the perspective of frequency, vibration and energy, you’d understand the world in a much better perspective.

Instead of saying me, me, you will start to say us; instead of just boosting up your ego and saying, man is everything in this world. You will understand the relationship of man in the world. And then you will protect the world.

What I’m trying to put here is for my generation to see things from a bird’s eye view. Let me put it this way, everything that we use today, phones, computer, internet, technology, all these things that we kill each other for is made by the people who understood this, these higher understandings of the world. Because how can a person make a phone that can do miraculous things without understanding the world holistically. I think the perspective that we have about ourselves and the universe is distorted and that’s why we’re very tribal and biased.

The bottom line is, I think the understanding we have about ourselves and the world should change or should be in check.

So, what I try to do with this 3, 6, and 9 is to show people that there is a higher perspective of looking at yourself, the world, how it goes and how it functions. If you understand that, everything becomes lighter, everything becomes a shape that will be understandable by the next person.

The names are inspired from that. So, when people say, oh, it’s three, it’s six, it’s nine, it’s like you’re engaging with these numbers, raising curiosity amongst listeners to look into these numbers, which will hopefully raise a question in people’s head so that they can have a better understanding of the world.

It’s always much better to look at yourself within the world. What I mean by that is like, yes, you are you, but you are in the world so know the relationship you have with the world, and then you’ll have a healthy thought, instead of saying what did the world give me? You’ll understand and you’ll start to say, what did I give to the world, what are the things that I said this morning? Most of us we’re just living inside our head, we don’t really live.

How has the experience been with Universal Records?

Well, I’m learning a lot from how the world moves, how it works, how everything is intentional; intentional in a sense that the world is moving faster. It was like going from being a small fish in a tank into a small fish in an ocean, it’s so big and sometimes it’s challenging but exciting for the most part.

I’ve seen a lot of people working day and night to make things go the right way. For me, it starts from my management company, Dots, all the way to universal music Africa and the whole team who have worked tirelessly to make things go smoother for me. I am very thankful.

The one thing I’m most thankful for is getting to release 6 at this moment, because according to our deal with the record company, I wasn’t supposed to release it now but we demanded it because I felt my generation needed it. There are songs in the album I really want to put out at this moment because my generation needs it.

They’ve been willing to compromise on things for me and understand that I’m coming from a different side of the world that they never existed in. So, it’s been challenging for them and I can understand but they they’ve been nice to me, I feel like I’m in great hands to join the world.

Other artists like Aster and Gigi have signed to international companies and represented our country. Hopefully, I’ll be able to get to do that as well. I’m following in the footsteps of giants. I hope I deliver something worth a while. Honestly speaking, to join the international world has been a dream come true.

Do you still get to work on crafts that are still true to yourself?

Of course. They do not affect my craft, rather they just help. That’s what people don’t understand. People thought they’ll make me do things their way, if that was the case, I would have never signed anything.

They’re here because they loved what I do. So, why would they touch it? But they will help me delve in deeper. They want me to experiment in our cultural music more and they also allowed me to stay here. I’m still based here; I’m producing my music on our soil. I’m still intact with the people. I’m still a part of the community.

The future is exciting. I have a full control over my artistic freedom. They don’t bend my music into anything, they even provide me with more freedom and guide me through the lines, and present me with better opportunities.

What is the perspective of 6 and what does it mean?

Yeah. So 6 means a perspective of a six-year-old. When we were at that young and impressionable age, our intentions were clear and our ego was not built the way it is now. We were not stiff. We were eager to learn and we had a better understanding of the world.

I think in order to become a better generation, we have to learn how to become young and find our inner child. To tap into my inner child, I went to kids. I went to orphanages and just spent time with the kids, communicating with them, asking them to paint me stuff.

I’ll give them words and learn their perspective. For example, I’ll ask them for testify. Like, what do you think about the word testify? And they’ll just paint me stuff. Through the genius of my graphic designers Fanuel Leul and Tsegaw Tesfa, we were able to incorporate those paintings on the album art.

I also wanted for those six-year-olds to see themselves being represented, so that they can have better guts, that our traumas cannot hurt them, for them to have a thicker skin to say no to us, if we are ever to push our biases onto them.

I want my generation to be purposeful in not passing that trauma to the young. I am hopeful this would empower them both. We are alien to kids because our biases have molded us somehow. They don’t quite vibe with us that much. When they hear their voice in my album, they’re automatically engaged through the things that I say and to the songs that I put in there. It will eventually become theirs. So, when they grow up people will not manipulate them, the way we have been manipulated.

What can we expect going forward?

“9” is coming out in December and somewhere between then and now, we’re planning on having a festival celebrating all my music with fans.

It’s going to be a series of beautiful engaging events, and till then I hope everyone enjoys 6 and gets the message.

The TPLF is the enemy of Ethiopia and the people of Tigray point blank. The government says that it would make peace with the group but as Ethiopians we can’t forgive that party even if the government fulfils its diplomatic responsibilities. I did not say the people of Tigray, rather just TPLF.

The role of Ethiopia’s government should be identified; the election board should not be giving out certificates for parties that work with terrorists. If they get a certificate, then the TPLF would need one as well.

The country is on the precipice of prosperity now. Our current state could be depicted as a nine month pregnant women ready to give birth on any day. It is always darkest before dawn, Ethiopia’s people come together even stronger when there problems pile up.

We should be careful with parties that try and create the gap between ethnicities.

How can the government enforce a justice transition? What should be included?

Justice transition means the world did not get civilized through a revolution, but rather through reforms. Reform means averting the negative impacts and carrying on already started projects.

Justice transition implies those that refuse forgiveness and acceptance from the recently started national dialogue and the people that are being accused. Each one of the perpetrators will not be brought before court but instead will have to reconcile their differences in the regions customs, which is according to justice transition.

This is the outcome of the reforms. A new education law is now being drafted, in addition to changes to the education policy. These and other innovations in teacher education are greatly appreciated.

The Association applauds the improvements and supports the next developments.

In the last three years, for example, the panda bag arrived in Djibouti and stayed for more than a month, and we were required to pay tax. We would not pay that money if the Ethiopian government was facilitating faster. We occasionally lose bags or items in a warehouse where we keep the bags.

It’s pointless for me to go over what happened. It is all well known that we simply need to take our time and evaluate everything before coming up with a way to mediate it.

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ቪዲዮዎች
ሪፖርተር

የቻይና አስደናቂ ፀረ ድሮን ቴክኖሎጂ | ወደ ትግራይ ክልል የአየር በረራ... @Ethiopian Reporter / ሪፖርተር

የወደሙ የኤሌክትሪክ መስመሮች | የአሜሪካና ሩስያ የኑክሌር ጦር መሳሪያ ቅነሳ @Ethiopian Reporter / ሪፖርተር

አሜሪካ ከሩሲያ ጋር አሁንም ምሥጢራዊ የግንኙነት መስመር እንዳላት... | ሻለቃ ኃይሌ ገብረሥላሴ ስለተደረሰው ስምምነት ምን ተናገረ?

ስለ አንጋፋው አሊ ቢራ ያልተሰሙ ነገሮች @Ethiopian Reporter / ሪፖርተር

በፒያሳና መርካቶ ምክንያቱ ባልታወቀ ሁኔታ ከመደብሮች የተወሰደዉ ወርቅና የታሠሩ ግለሰቦች @Ethiopian Reporter / ሪፖርተር

ጠ/ሚ ዐቢይ ስለ ሰላም ሂደቱ ምን አሉ? | አትሌት ኃይሌ ገብረስላሴ በፕሬዝዳንቷ ተመሰገነ @Ethiopian Reporter / ሪፖርተር

ምልእቲ ኪሮስ - ድንቅ የግጥም ስራ @Ethiopian Reporter / ሪፖርተር

ሰለሞን ሳህሌ መድረክ ላይ አንጋፋዎችን ያስደመመበት የግጥም ስራ @Ethiopian Reporter / ሪፖርተር

በበርካታ ሰህተቶች የታጀበዉ የሀገራቸን ግጥም በጃዝ፦ ከሙዚቃ ባለሙያዉ ሰርፀ ፍሬ ስበሀት ጋር የተደረገ ቆይታ @Ethiopian Reporter / ሪፖርተር

ዓዲ አርቃይ እና አካባቢው ዳግም የኔትዎርክ አገልግሎት ጅማሮ | ጠቅላይ ሚኒስትር ዐቢይ ለትግራይ ህዝብ ያቀረቡት ጥሪ

Ethiopian Reporter, Political, Kibir Minister, Editorial….

Ethiopia Country Report Context

Key changes and developments in the newspaper marketplace in the past five years

According to the Ministry of Information, there were 68 newspapers and magazines published and distributed in July 2006. This is an increase from five years ago (though figures for 2000 could not be found). There are 56 newspapers and 12 magazines. Most papers are weeklies, bi-weeklies and monthlies, with only three dailies, all national, in existence. Many of the new papers in recent years have been tabloid weeklies responding to news events, such as the 2005 elections. However, some of these papers disappear when there are no strong news events to cover.

Newspaper in Ethiopia

Daily

Twice a week Weekly

Every two weeks Monthly

Source: Ministry of Information, personal communication, August 2006

The newspaper sector is limited by the country’s low literacy rates, and most titles are said to have small print runs of only about 3,000 copies. At the time of writing this report, no data could be sourced on the percentage of the adult population that reads a newspaper.

At national level, there are three daily newspapers (see Figure 8). The three national dailies are Addis Zemen (Amharic), The Ethiopian Herald (English) and the Monitor (English). The Monitor is the only private-owned daily. There is no information available to distinguish whether the remaining 53 newspapers are national or regional papers.

There are 12 national magazines; 10 published monthly, two published every two months, and two published quarterly. Ten of these magazines are in the Amharic language, and two are published in English, a monthly and a bi-monthly (Ministry of Information, personal communication, August 2006).

7.2 Investment and growth in newspapers in the past five years

There has been a significant increase in the number of papers in the past five years, with new privately-owned papers leading this growth.

However it is difficult to comment on the exact size of the newspaper market, as there is no research available in this area. Anecdotally, however, there was evidence of high demand for private papers during the May 2005 election period, but with a contraction in the number of private papers after the election.

Only a few of the newspapers, such as The Reporter (with Amharic and English editions, owned by the Media Communication Centre) and Addis Admass (in Amharic) are backed by strong private investment. Some papers have folded after not being strong enough to withstand challenges pertaining to legal or other matters. Some complain about delays in getting permits due to delay in finalisation of the provisions of the new Press Law. Another barrier to newspaper sector growth, according to the International Press Institute (IPI, 2005), has been the banning of some newspapers and the detention of journalists following the unrest after the May 2005 elections.

There is a state-owned news agency, Ethiopian News Agency, and a private local one, Walta Information Centre, both of which mainly serve the state media. Walta Information Centre is owned by the ruling party (EPRDF), so is categorised as state-owned in Figure 9. The private media do not have arrangements with these news agencies to provide them with the content they require, and this remains a major challenge for the private media. The other five news agencies operating in the country, such as Reuters and AFP, are all international.

State or government-owned/backed

Plurality, ownership and control

The private newspaper sector in Ethiopia is still very young and, because of lack of transparency around ownership, it is not known whether ownership is diverse or concentrated in a few hands. However, Kifle Mulat, president of the EFJA, states that all newspapers are under censorship and all are pro-government and controlled by the government (directly or indirectly) (K. Mulat, private communication, 1 September 2006). There is strong opposition to this view, however, from one Ethiopian editor and publisher, Mr Amare Aregawi, who argues that there is no censorship in the country because it is unconstitutional and illegal for the government to practice it.

The Minister of Information states that of the 56 newspapers currently being published, six are government-owned and 32 are privately-owned. The remaining papers are owned by Religious Organisations (8), Associations (6), Political Parties (3) and NGOs (1).

Of the 12 magazines published, 11 are privately-owned, while one is owned by a religious organisation (Ministry of Information, personal communication, August 2006).

Figure 10 below lists the 10 most-read newspapers. These papers can be classified into state, private and party papers. Addis Zemen is a daily state paper. Netsanet, Addis Admas, Ethiop, Askual, Minilik and Ethiosport are private weeklies. Party weekly papers include Oromiya, Abyotawi Dimkrasi and Woyin.

The number of newspaper readers is generally thought to be quite low, and there could be several reasons for this. First, it is possible that the culture of reading has not been properly cultivated, despite the fact that literacy has been increasing over the past few years. Another possible reason is that, in the case of the private newspapers, they cannot afford to distribute beyond the capital Addis Ababa, due to both financial and infrastructural constraints.

Newspaper Netsanet Oromiya

Abiotawi Democracy

Addis Admas Ethiop Asmat Minilik

Addis Zemen Woyin Ethiosport

Percentage

Source: Ministry of Information, personal communication, August 2006

7.4 Diversity

The past five years has seen an increase in the plurality of ideas found in newspapers. For instance, there is frequent newspaper coverage of women’s and religious issues, with some papers even published by religious institutions. Private newspapers provide more entertainment coverage than the government ones do.

The majority of the newspapers are in the Amharic language (33), and the second most common language is English (14). There are also several bi-lingual newspapers, publishing in both Amharic and English (5), and there is one newspaper that publishes in Amharic, English and French. There are also newspapers written in Oromifa (2), Tigrinya (1) and Arabic (1). (Ministry of Information, personal communication, August 2006). One interviewee expressed the need for further objective research to obtain more accurate data on readership.

7.5 Quality of newspaper reporting

With the great increase in the number of papers, there has also been an increase in journalistic work. The quality of journalism is highly uneven. Whilst some commentators describe work as lacking in ethics, independence and professionalism, others assert that concerted efforts are being made by journalists to improve standards in the sector.

7.6 Specific challenges

Challenges faced by newspapers in Ethiopia include low reading levels, the high cost of distribution outside the capital Addis Ababa, and a lack of professional journalists.

Key findings

The past five years have seen increased private sector participation in the press sector, but many of the private papers are not financially strong.

The largest group of publications is the national weeklies.

The panoply of challenges facing Ethiopia and its people show no sign of respite. Though active hostilities in the northern part of the country, have almost stopped after the forces of Tigray People’s Liberation Front (TPLF) were pushed back to Tigray from most of the territories they had captured in the adjoining Amhara and Afar regions, the security situation in a number of areas of the nation is fragile owing to the interminable endless cycle of violence that has been racking them for years now. Aside from the death of tens of thousands and the displacement of millions frequent outbreaks of internecine conflicts have led to, the unchecked rise in extremist attitudes, the cost of living, corruption, and land grabbing, among others, have made life an ordeal for the vast majority of Ethiopians. It’s in this backdrop that an incident, whose fallout could potentially plunge Ethiopia into a crisis of catastrophic proportions, recently took place.

On March 29 at least 26 people were killed and several more injured in clashes between armed groups hailing from the Minjar Shenkora Woreda of North Shewa Zone, Amhara regional state, and local militia in the bordering Fentalle woreda, East Shewa Zone of Oromia regional state. The blame game began soon thereafter with both sides issuing conflicting a slew of contradicting statements regarding the incident. Amhara region officials lay the blame on “anti-peace groups” whom they accused of perpetrating the attack. Their counterparts from the Oromia region though disputed the accusation, blaming the attack on “extremist forces operating in the Amhara region”. They also took these forces to task for displacing people and looting property in other woredas of Oromia bordering the Amhara region. It’s surprising that both the federal government and the ruling Prosperity Party (PP) have not made any overt attempt to defuse the tension between the Amhara and Oromia regional administrations even as both escalate the war of words among them.

Ethiopia is a nation that continues to be on the wrong side of the global digital divide. Only a fifth of its over 110 million people have Internet access that is expensive and often unreliable. In cognizance of the imperative to tackle the multi-faceted challenges this poses the government has embarked on liberalizing the telecom sector and adopted Digital Ethiopia 2025— a digital transformation strategy described by the government as a visionary strategy that serves as a blueprint for different sectors and institutions—as it tries to position the country competitive in the brave new digital world. Efforts to open up the telecom industry have had limited success with one international consortium awarded a license to operate telecom services in the country so far while plans to sell 45 percent of the state-owned telecoms monopoly to international buyers have been repeatedly pushed back. Meanwhile, a number of public services have begun to benefit from Digital 2025 through developments like e-government, digital ID, the national payment system, online trade registration and licensing system, electronic single-window customs clearance and electronic tax filing.

As the government ramps up its roll out of various services aligned with the digital transformation strategy, the suspension by the National Bank of Ethiopia (NBE) of digital remittance platforms, namely CashGo and MamaPay, the Bank of Abyssinia (BoA) uses has caused a furore, leading many to question whether the central bank is on the same page as the government in the latter’s quest to create an inclusive digital economy through the national digital strategy. CashGo is an international money transfer system which allows anyone abroad to transfer funds in the local currency to accounts maintained at BoA while MamaPays allows users to request payment from remitters or payment to be settled on behalf of a third party. The reasons cited by NBE to justify its decision are varied. It says both BoA and the developers of the applications behind the platforms do not possess a valid license permitting them to provide remittance services. It also alleges that the applications enable BoA to avail travelers foreign exchange through credit cards in disregard of its regulatory mandate over currency management. The regulator further raised the need to address safety and security concerns, particularly relating to privacy breaches, and ensure that local fintech companies survive the inevitable competition from foreign rivals via a major initiative currently in the works.

The developers of the applications, however, refute the points mentioned by the central bank. They argue that they are authorized fintech companies engaged in developing applications and as such do not require to have a remittance license, adding the applications were vetted by the NBE and the Information Network Security Agency before they were integrated into BoA’s system. They also suspect that foul play may be involved, saying some of the remittance companies active in the Ethiopian market probably conspired with regulators at NBE to close them down because the country would save up to USD 800 million it annually lost to them through steep service charges and redirection of the forex they receive to informal channels. Moreover, they point out that NBE’s compliance and safety concerns could have been worked out while the applications were still running.

While NBE may have grounds it deems legitimate and warrants the suspension of the operation of the digital remittance platforms, its decision is heavy-handed and lacks foresight. In the first place, it did not hold formal consultations on the matter with all the stakeholders involved. If it had demonstrated the willingness to engage them constructively, the dispute between the parties could have been amicably solved. The decision also discourages fintech companies from investing in the development of platforms that help Ethiopia bridge the digital divide. The Digital 2025 strategy aspires to transform Ethiopia’s digital landscape to accomplish such lofty goals as playing a vital role for inclusive prosperity; innovating and applying the culture, practices, processes and technologies of the digital era to respond to citizens raised expectations. The realization of the strategy requires, among others, the collaboration and commitment of everyone including government, non-governmental, development partners and societies as well as a robust commitment to increase infrastructure and put in place an enabling ecosystem. If the government is to succeed in pushing the country through digitalization and making it a viable investment depends on its dedication to reforming the bureaucracy, implementing the right regulation and creating credible institutions. As Prime Minister Abiy Ahmed (PhD) once said leveraging digital opportunities demands a new mindset and leadership style. Leaders at the central bank must take this advice to heart and adapt to the new digital environment.

The feuding between officials heading two branches of the ruling party cannot be confined to them given the party is still ethno-centric despite claiming to be a national party. In fact it has led to spats among major opposition parties active in the respective regions and social media activists, which are spewing a hateful rhetoric that could very well pit the Oromo and Amhara people, the two largest ethnic groups in Ethiopia, in a bloody conflict. The consequences of such a conflict are too horrible to contemplate. From a protracted and destructive civil war in which no side emerges victorious to a total state collapse all the scenarios facing the nation are lose-lose not only for its citizens, but also the Horn of Africa and beyond. It’s not entirely clear whether the protagonists to the ongoing verbal warfare realize that their actions are liable to lead to Ethiopia’s unraveling or are indifferent to the ensuing heavy price.

With three decades of experience in the banking industry, Mulugeta Asmare is known for his successful years at the Bank of Abyssinia. During his five year tenure as the president of the Bank until 2019, the Bank’s profit doubled to over half a billion birr, while its paid-up capital skyrocketed from a little less than one billion birr to 2.5 billion birr.

Last year, he was appointed as the president of Goh Bank, the first self-proclaimed mortgage bank in Ethiopia. The Reporter’s Selamawit Mengesha sat down with Mulugeta to learn about his new journey at Goh and his insights in the banking industry. Excerpts:

The Reporter: Tell us about your experience in the banking industry.

Mulugeta Asmare: I have been working in the bank industry for the past 31 years. I have an all-round experience in the banking industry, meaning I had started work in the banking sector as a clerk and have now reached the position of general manager. I have worked as deputy president of Abyssinia Bank for four years-and-a-half until 2019. I believe that I was able to make a lot of reforms and changes while working at Abyssinia Bank. I was faced with a lot of challenges while working at this bank, since it had a lot of shortcomings at the time.

I believe that I have contributed a lot towards the betterment of the banking system at Abyssinia Bank, for it to get to the stage that it is in now. We started off by inviting global market leaders like Deloitte, PWC, KPMG, and Ernest & Young to participate in a bid to frame a five-year strategy for the bank. Winning the bid, Ernest & Young have done a remarkable job in improving our system-wide operations. We used to have such work done by in-house experts. So, this is the first time that we enlisted the services of a globally renowned company. We have focused on manpower development and raising pay, measures that have surely contributed to the development of the bank.

Following my previous stint with Abyssinia Bank, I used to focus on private contractual jobs here and there. I was informed of this new concept of establishing a mortgage bank system which was unique and different, and it got my attention. After establishing the bank and selling the shares and raising enough capital to establish the bank, we couldn’t find the right person to run it. The 11 founding members are well-known business professionals that have worked for years in the banking system, and they wanted me to take the role. I couldn’t say no to such noted personalities as former National Bank President Getahun Nana.

Before delving into the mortgage bank, I would like to raise a question regarding saving. Most people open bank accounts for saving purposes while few dare to ask for loans. Why do you think that is the case?

The major mission of a bank is to help develop the culture of saving. It is evident that once there is a saving, the next step is to provide a loan. Without savings, there are no loans. Customers can resort to saving for they have some future plans to invest or to purchase something, or it can just be a leftover from their monthly expenses. This saving is directly forwarded to producers and service providers who are planning to expand a business, or who are looking forward to enter into new business ventures. The main job of a bank is to act as an intermediary between the depositor and the borrower.

Banks have advanced and sophisticated role nowadays compared to the old times. I believe that low-scale savings at the banks is the main reason for the small number of loans. The loans are mostly provided to customers that have a convincing project idea with a guaranteed profit. You don’t find such projects every day, not everyone can be a producer, a service provider or a farmer. Banks have a limited access to capital and deposit, which is the reason for setting strict criteria. These are some of the reasons for having more savings while there are less loans being provided.

The last three years have seen a remarkable change in the banking sector. The number of private banks has increased to 23, including Goh Betoch Bank, which is managed by you, and an interesting enterprise at that. Why do you think private banks are increasing at such a pace? Is it because the banking industry is profitable?

It is obvious that the banking industry is becoming more profitable today than ever. All banks are recording a profit since the market demands such service. Even though our economy is underdeveloped, the banking sector is essential to reach the population that is not getting access to the service. Until recently, only 25 percent of the population was banked. But that is changing thanks to the increasing number of banks and the opening of branches in the regions. This shows that the market is still untapped. That being said, the capital requirement to establish a bank is also increasing drastically. The set of criteria laid down by the National Bank is complex. Therefore, I don’t believe that we have banks mushrooming left and right. For a population of 110 million, the number of banks we have is far from enough. I think the main challenge for potential new banks forming is the rules set by the central bank. Allowing specialized banks to open branches in the country is not yet a trend but it’s a must. We have paved the way as a mortgage bank but there can be many others that specialize in farming, industry, housing, import and export, etc.

Goh Bank specializes in the housing sector. I’m sure you’ve conducted a thorough research before establishing the bank, including the case of the then Construction and Business Bank. What is the sustainability plan?

The Construction and Business Bank has its own flaws. During the reign of the Derg, it was taken over by the government and it was functioning under the name of Housing and Savings Bank, the only service provider specializing in mortgage banking. It was later on transformed into a commercial banking system and was named as “Construction and Business Bank.” Keep in mind that both the Constriction and Business Bank and Commercial Bank were providing the same traditional banking service under a different name. The bank didn’t have enough capital. Therefore, it has struggled to keep in the same pace as private banks. The Construction and Business Bank later on merged with the Commercial Bank since it couldn’t stand on its own. This has caused a gap in the mortgage banking system. It provides a service that is in high demand. That is the main reason for establishing the Goh Betoch Bank with a view to addressing the problem. A lot of customers have savings in their account that is not enough to purchase a house without bank financing. These people can opt to switch funds used to rent a house in favor of mortgage payments.

Does the bank provide mortgage service or does it focus on commercial services?

The bank purely provides mortgage services. It is also registered with the national bank as a provider of mortgage services. We are the first bank in Ethiopia to offer this service. We have done rigorous feasibility studies. We haven’t provided any commercial loans to businesses. We only give loans to customers who want to buy a house.

Is there a push from the government to make the service partially commercial?

Actually, we are the ones pushing. That is since the country doesn’t have laws regulating such a specialized banking system. According to the law in the books, all banks are treated equally, be they private or government. But we are demanding a special treatment, and the national bank has lately been cognizant of this fact.

Do you cater to folks lower in the socio-economic ladder, and can you also reflect on the high cost of housing in Ethiopia?

It would take days to discuss issues regarding housing. In Ethiopia, there are many programs that were drafted in order to provide solution to these problems. For instance, the Integrated Housing Development Program was developed by the government in 1997. This condominium-housing project was later on developed into the ‘40/60’ housing. The idea was to construct a lot of housing units and help the general public own their house. A mere 400,000 housing units have so far been built. Many Ethiopians have been into the culture of housing saving schemes for years now. There is a study indicating that 400,000 housing units needed to be built every year in order to meet demand in Ethiopia. Specifically, 100,000 housing units should be constructed in Addis Ababa every year, but a tenth of that is being accomplished.

What is more, the already existing houses in Ethiopia do not meet habitat standards established by the United Nations. Based on this requirement, around 74 percent of the housing units in Addis Ababa need to be reconstructed since they do not meet the standard. The main reason for the soaring price of houses is the ever rising cost of land as well as construction materials. The paucity of hard currency coupled with unbridled inflation has worsened the situation. The current going rate for a housing unit is beyond the reach of middle and lower income citizens.

According to our study, medium income is 30,000 and up, way below the threshold to afford buying a new house. We should also look into our construction system that is backward and traditional. It takes two to three years to build a house. Time is essential; we should be able to construct houses in one year. If we want housing to be affordable, we should look into ways of cutting down the price of land and construction inputs as well as employing modern technology. Financing should also be factored in, and this is where we come in.

Apart from huge outlays by private banks, the government is also spending 50 to 60 million birr to construct condominiums. These houses are designed to be affordable to low-income people, but that’s not the case. How does your bank intend to make housing affordable to middle- or low-income citizens?

The housing problem can’t be solved only by private banks. The main role should be played by the government since having shelter is a human right. The government being a responsible body should provide land at a lower price or for free to the lower and medium income people. What’s more, the government should regulate the price of construction materials besides encouraging their ample supply. Banks as financers should also expedite provision of capital in the form of loans.

Most banks are reluctant to engage in mortgage banking. How come you chose it?

We dared to join the banking sector, especially mortgage financing, because of the need for one on the market. Our shareholders took the initiative to establish a huge institution that can support the country’s economy. The realty on the ground in Ethiopia is such that a 40-year-old individual lives with his or her parents. This is so due to the dearth of financing schemes to own one’s house. Therefore, we are trying to help individuals with limited means.

What is the plan this year as regards providing mortgage loans for customers?

We have started business since October 25. We haven’t provided much service because we just launched our bank a few months ago. But we are planning to provide one billion birr in loans until the end of the year. Based on the outlook of the economy, this might not be attainable, but that’s the plan.

How much would that be per client?

It depends on the customer. Some might take a 10 million-birr loan while others ask for more. Anyways, we are planning to provide 1 billion birr in loans until the end of this year. While framing this plan, we were under the impression that we can go around the country and find deposits, but there were many unforeseen events such as the war that disrupted the economy. Therefore, we might not be able to meet the target.

So there is no plan to provide this service to other regions?

We will cover other regions as well. We might not have many branches like other banks but being a mortgage bank, we are going to employ technology to scale up services. The main branch is in Addis Ababa while the second branch is in Dire Dawa and the third branch is around Lebu. The fourth branch in the CMC area goes online this month. We serve cities that have a high housing demand such as Hawassa, Adama, Bahir Dar,Gonder and Mekelle.

What do you think of foreign banks establishing mortgage banks in Ethiopia? How would they affect the already existing mortgage market?

Although I’m aware that foreign banks are joining, the timeline is not yet announced. A healthy competition is not bad; I don’t believe that they will take over the banking business instantly. The government will surely have some sort of plan in order to institute a gradual change. Some requirements might also be in order such as a fixed amount of capital. They should purchase shares to be able to establish a bank in Ethiopia. For instance, if a foreign bank buys 30 to 40 percent share from a private bank, then it will be perfect since they can invest in human-resource development and bring in capital for the existing bank.

Mortgage bank is no different from other private banks; I believe that foreign banks can help a lot since there is an untapped market. We can assist them in expediting the process of setting up shop. If foreign banks buy shares from us, then they can avoid that hustle. We would like the competition, although we are not sure when they can come to the market; we are preparing psychologically to work with them.

Can you briefly explain what it takes to get mortgage?

Those who seek loan at our bank, we welcome them all. We have started giving service for most customers now. It is required for the customer to save a minimum of 20 percent of the selling price of the house at our bank. And then, we can provide the remainder 80 percent. The other unique system is that we will provide 30 years grace period for paying the loan back to the bank. Our interest rate is lower than other banks’. For instance, Commercial Bank provides loans at 15 to 26 percent rate while we can provide loans for less. Our interest rate is flexible depending on the currency and frequency that a customer would return the loan. This makes us unique.

Customers can’t knock on any private bank and ask for a loan to purchase a house. Most banks provide a mortgage service to their employees, or for selected VIP customers that pay in foreign currency such as embassies, NGOs and exporting companies. We only require that a customer has a fixed monthly salary and that he or she can pay the loan back at the provided timeline. There’s also no need for any collateral since we use the house that will be purchased as collateral by itself. We are trying to reach the public with this information to mitigate the housing problem.

Since the public is very eager to get this service, what can we expect from your bank?

We would like to pass the message that any customer that has the financial means and the interest to purchase or construct a house, we are eager to help. Come to our bank, open a bank account and save the minimum amount of money required for purchasing the house that you want to have. We will advise you on the best option. We are also planning to construct houses by ourselves.

With three decades of experience in the banking industry, Mulugeta Asmare is known for his successful years at the Bank of Abyssinia. During his five year tenure as the president of the Bank until 2019, the Bank’s profit doubled to over half a billion birr, while its paid-up capital skyrocketed from a little less than one billion birr to 2.5 billion birr.

Last year, he was appointed as the president of Goh Bank, the first self-proclaimed mortgage bank in Ethiopia. The Reporter’s Selamawit Mengesha sat down with Mulugeta to learn about his new journey at Goh and his insights in the banking industry. Excerpts:

The Reporter: Tell us about your experience in the banking industry.

Mulugeta Asmare: I have been working in the bank industry for the past 31 years. I have an all-round experience in the banking industry, meaning I had started work in the banking sector as a clerk and have now reached the position of general manager. I have worked as deputy president of Abyssinia Bank for four years-and-a-half until 2019. I believe that I was able to make a lot of reforms and changes while working at Abyssinia Bank. I was faced with a lot of challenges while working at this bank, since it had a lot of shortcomings at the time.

I believe that I have contributed a lot towards the betterment of the banking system at Abyssinia Bank, for it to get to the stage that it is in now. We started off by inviting global market leaders like Deloitte, PWC, KPMG, and Ernest & Young to participate in a bid to frame a five-year strategy for the bank. Winning the bid, Ernest & Young have done a remarkable job in improving our system-wide operations. We used to have such work done by in-house experts. So, this is the first time that we enlisted the services of a globally renowned company. We have focused on manpower development and raising pay, measures that have surely contributed to the development of the bank.

Following my previous stint with Abyssinia Bank, I used to focus on private contractual jobs here and there. I was informed of this new concept of establishing a mortgage bank system which was unique and different, and it got my attention. After establishing the bank and selling the shares and raising enough capital to establish the bank, we couldn’t find the right person to run it. The 11 founding members are well-known business professionals that have worked for years in the banking system, and they wanted me to take the role. I couldn’t say no to such noted personalities as former National Bank President Getahun Nana.

Before delving into the mortgage bank, I would like to raise a question regarding saving. Most people open bank accounts for saving purposes while few dare to ask for loans. Why do you think that is the case?

The major mission of a bank is to help develop the culture of saving. It is evident that once there is a saving, the next step is to provide a loan. Without savings, there are no loans. Customers can resort to saving for they have some future plans to invest or to purchase something, or it can just be a leftover from their monthly expenses. This saving is directly forwarded to producers and service providers who are planning to expand a business, or who are looking forward to enter into new business ventures. The main job of a bank is to act as an intermediary between the depositor and the borrower.

Banks have advanced and sophisticated role nowadays compared to the old times. I believe that low-scale savings at the banks is the main reason for the small number of loans. The loans are mostly provided to customers that have a convincing project idea with a guaranteed profit. You don’t find such projects every day, not everyone can be a producer, a service provider or a farmer. Banks have a limited access to capital and deposit, which is the reason for setting strict criteria. These are some of the reasons for having more savings while there are less loans being provided.

The last three years have seen a remarkable change in the banking sector. The number of private banks has increased to 23, including Goh Betoch Bank, which is managed by you, and an interesting enterprise at that. Why do you think private banks are increasing at such a pace? Is it because the banking industry is profitable?

It is obvious that the banking industry is becoming more profitable today than ever. All banks are recording a profit since the market demands such service. Even though our economy is underdeveloped, the banking sector is essential to reach the population that is not getting access to the service. Until recently, only 25 percent of the population was banked. But that is changing thanks to the increasing number of banks and the opening of branches in the regions. This shows that the market is still untapped. That being said, the capital requirement to establish a bank is also increasing drastically. The set of criteria laid down by the National Bank is complex. Therefore, I don’t believe that we have banks mushrooming left and right. For a population of 110 million, the number of banks we have is far from enough. I think the main challenge for potential new banks forming is the rules set by the central bank. Allowing specialized banks to open branches in the country is not yet a trend but it’s a must. We have paved the way as a mortgage bank but there can be many others that specialize in farming, industry, housing, import and export, etc.

Goh Bank specializes in the housing sector. I’m sure you’ve conducted a thorough research before establishing the bank, including the case of the then Construction and Business Bank. What is the sustainability plan?

The Construction and Business Bank has its own flaws. During the reign of the Derg, it was taken over by the government and it was functioning under the name of Housing and Savings Bank, the only service provider specializing in mortgage banking. It was later on transformed into a commercial banking system and was named as “Construction and Business Bank.” Keep in mind that both the Constriction and Business Bank and Commercial Bank were providing the same traditional banking service under a different name. The bank didn’t have enough capital. Therefore, it has struggled to keep in the same pace as private banks. The Construction and Business Bank later on merged with the Commercial Bank since it couldn’t stand on its own. This has caused a gap in the mortgage banking system. It provides a service that is in high demand. That is the main reason for establishing the Goh Betoch Bank with a view to addressing the problem. A lot of customers have savings in their account that is not enough to purchase a house without bank financing. These people can opt to switch funds used to rent a house in favor of mortgage payments.

Does the bank provide mortgage service or does it focus on commercial services?

The bank purely provides mortgage services. It is also registered with the national bank as a provider of mortgage services. We are the first bank in Ethiopia to offer this service. We have done rigorous feasibility studies. We haven’t provided any commercial loans to businesses. We only give loans to customers who want to buy a house.

Is there a push from the government to make the service partially commercial?

Actually, we are the ones pushing. That is since the country doesn’t have laws regulating such a specialized banking system. According to the law in the books, all banks are treated equally, be they private or government. But we are demanding a special treatment, and the national bank has lately been cognizant of this fact.

Do you cater to folks lower in the socio-economic ladder, and can you also reflect on the high cost of housing in Ethiopia?

It would take days to discuss issues regarding housing. In Ethiopia, there are many programs that were drafted in order to provide solution to these problems. For instance, the Integrated Housing Development Program was developed by the government in 1997. This condominium-housing project was later on developed into the ‘40/60’ housing. The idea was to construct a lot of housing units and help the general public own their house. A mere 400,000 housing units have so far been built. Many Ethiopians have been into the culture of housing saving schemes for years now. There is a study indicating that 400,000 housing units needed to be built every year in order to meet demand in Ethiopia. Specifically, 100,000 housing units should be constructed in Addis Ababa every year, but a tenth of that is being accomplished.

What is more, the already existing houses in Ethiopia do not meet habitat standards established by the United Nations. Based on this requirement, around 74 percent of the housing units in Addis Ababa need to be reconstructed since they do not meet the standard. The main reason for the soaring price of houses is the ever rising cost of land as well as construction materials. The paucity of hard currency coupled with unbridled inflation has worsened the situation. The current going rate for a housing unit is beyond the reach of middle and lower income citizens.

According to our study, medium income is 30,000 and up, way below the threshold to afford buying a new house. We should also look into our construction system that is backward and traditional. It takes two to three years to build a house. Time is essential; we should be able to construct houses in one year. If we want housing to be affordable, we should look into ways of cutting down the price of land and construction inputs as well as employing modern technology. Financing should also be factored in, and this is where we come in.

Apart from huge outlays by private banks, the government is also spending 50 to 60 million birr to construct condominiums. These houses are designed to be affordable to low-income people, but that’s not the case. How does your bank intend to make housing affordable to middle- or low-income citizens?

The housing problem can’t be solved only by private banks. The main role should be played by the government since having shelter is a human right. The government being a responsible body should provide land at a lower price or for free to the lower and medium income people. What’s more, the government should regulate the price of construction materials besides encouraging their ample supply. Banks as financers should also expedite provision of capital in the form of loans.

Most banks are reluctant to engage in mortgage banking. How come you chose it?

We dared to join the banking sector, especially mortgage financing, because of the need for one on the market. Our shareholders took the initiative to establish a huge institution that can support the country’s economy. The realty on the ground in Ethiopia is such that a 40-year-old individual lives with his or her parents. This is so due to the dearth of financing schemes to own one’s house. Therefore, we are trying to help individuals with limited means.

What is the plan this year as regards providing mortgage loans for customers?

We have started business since October 25. We haven’t provided much service because we just launched our bank a few months ago. But we are planning to provide one billion birr in loans until the end of the year. Based on the outlook of the economy, this might not be attainable, but that’s the plan.

How much would that be per client?

It depends on the customer. Some might take a 10 million-birr loan while others ask for more. Anyways, we are planning to provide 1 billion birr in loans until the end of this year. While framing this plan, we were under the impression that we can go around the country and find deposits, but there were many unforeseen events such as the war that disrupted the economy. Therefore, we might not be able to meet the target.

So there is no plan to provide this service to other regions?

We will cover other regions as well. We might not have many branches like other banks but being a mortgage bank, we are going to employ technology to scale up services. The main branch is in Addis Ababa while the second branch is in Dire Dawa and the third branch is around Lebu. The fourth branch in the CMC area goes online this month. We serve cities that have a high housing demand such as Hawassa, Adama, Bahir Dar,Gonder and Mekelle.

What do you think of foreign banks establishing mortgage banks in Ethiopia? How would they affect the already existing mortgage market?

Although I’m aware that foreign banks are joining, the timeline is not yet announced. A healthy competition is not bad; I don’t believe that they will take over the banking business instantly. The government will surely have some sort of plan in order to institute a gradual change. Some requirements might also be in order such as a fixed amount of capital. They should purchase shares to be able to establish a bank in Ethiopia. For instance, if a foreign bank buys 30 to 40 percent share from a private bank, then it will be perfect since they can invest in human-resource development and bring in capital for the existing bank.

Mortgage bank is no different from other private banks; I believe that foreign banks can help a lot since there is an untapped market. We can assist them in expediting the process of setting up shop. If foreign banks buy shares from us, then they can avoid that hustle. We would like the competition, although we are not sure when they can come to the market; we are preparing psychologically to work with them.

Can you briefly explain what it takes to get mortgage?

Those who seek loan at our bank, we welcome them all. We have started giving service for most customers now. It is required for the customer to save a minimum of 20 percent of the selling price of the house at our bank. And then, we can provide the remainder 80 percent. The other unique system is that we will provide 30 years grace period for paying the loan back to the bank. Our interest rate is lower than other banks’. For instance, Commercial Bank provides loans at 15 to 26 percent rate while we can provide loans for less. Our interest rate is flexible depending on the currency and frequency that a customer would return the loan. This makes us unique.

Customers can’t knock on any private bank and ask for a loan to purchase a house. Most banks provide a mortgage service to their employees, or for selected VIP customers that pay in foreign currency such as embassies, NGOs and exporting companies. We only require that a customer has a fixed monthly salary and that he or she can pay the loan back at the provided timeline. There’s also no need for any collateral since we use the house that will be purchased as collateral by itself. We are trying to reach the public with this information to mitigate the housing problem.

Since the public is very eager to get this service, what can we expect from your bank?

We would like to pass the message that any customer that has the financial means and the interest to purchase or construct a house, we are eager to help. Come to our bank, open a bank account and save the minimum amount of money required for purchasing the house that you want to have. We will advise you on the best option. We are also planning to construct houses by ourselves.

Shewit Emanuel is the current country director of Farm Africa, an international NGO established 35 years ago. It started out in Kenya but has branched out to Ethiopia, Uganda, Tanzania and the DRC.

Active in majority of eastern African countries, it is a specialized NGO focusing on natural resource management and business development linked to agriculture including livestock. Yosthena Aynalem of The Reporter sat down with Shewit to discuss smart agriculture in Ethiopia. Excerpts:

The Reporter: In a country where agriculture dominates, what would you say you have achieved thus far?

Shewit Emanuel: In a nutshell, one of the biggest achievements so far is that we exclusively work with smallholder farmers. What we are trying to do is to ultimately enable them to move out from poverty and become a commercial farmer who is self-sufficient.

Developing methodologies that are sustainable, inclusive and impactful is also one of our achievements. That’s our own target at the end of the day, when we leave, we want to make sure the work continues and the farmers continue to thrive with the support that we have started.

We operate all over Ethiopia. Unfortunately, some of the projects have ended in some regions, but we have footprints across all the regions within Ethiopia. The biggest achievement starts from increasing the income of the smallholder farmers we supported to reducing deforestation as well as supporting Ethiopia sell carbon credit to the international market. That is actually the newest achievement. We have also supported farmers to sell coffee directly to international markets.

Since vertical intégration is allowed now, farmers don’t have to go to the Ethiopian Ccommodities Exchange (ECX) anymore. If you can connect them with exporters, they can directly sell to the international market. The whole point is to reduce the middle men for the farmers and get the fairest prices for them.

Food insecurity is a recurring problem in Ethiopia and Africa. Many approaches have been applied to reduce food insecurity but nothing seems to avert it thus far. Is there any approach you have tried that is poised to be successful?

Nowadays, everybody’s moving into climate smart agriculture and unless all your interventions are becoming climate smart, you are bound to go back to that vicious cycle of droughts and flooding; which is both damaging to farmers. So, making sure farmers practice climate smart agriculture is the number one thing that we are working on.

One of the things that Farm Africa is actually pioneering and becoming innovative and a champion of is the use of integrated landscape management. This means to look at the challenge holistically, you cannot talk about conservation of land without talking about the livelihood of the people.

The majority of past projects, if you look at them, are about conservation without addressing why the community is damaging the environment? Unless you tackle that, you are not going to sustain it and all your efforts will be for nothing.

It also has to be inclusive of everybody. Most of the time, when a project starts, they focus on the direct beneficiaries. Let me give you a good example. One of our biggest projects is in Bale Eco region, where we’ve been operating since 2016. Initially, we were focusing on the regions communities and when the current drought occurred, the lowland communities came looking for water and resources towards the forest. So, all the conservation that we made, all the protection of the forest become under threat.

So, what we tried to do is expand our support, with the support from the Norwegians and other likeminded donors. It is not just the highland communities, but the lowlands are also included now. We have somewhat built resilience so that they don’t have to come to the forest.

And to be fair, even though 1.6 million people live within Bale, as direct beneficiaries, 12 million people depend directly on the forest. So, to address their need, everything from livestock fodder and irrigation is being provided, moving them into climate smart agriculture to become sustainable. They then become the protectors of the forest themselves, becoming part of the solution.

The approach we advocate for is an integrated landscape management where you can make your intervention impactful, sustainable and more importantly, inclusive of everybody, including women, pastoralists and nomads.

Does Farm Africa give lessons to these people or just resources?

Not exactly. When I say climate smart agriculture, there are different kinds of approaches that we use. Starting from the training itself such as when to plant, how to plant and what type to plant, and everything that has to do with linking farmers is included.

It could be providing improved seeds or making sure that they move to organic fertilizers or connect them to the local market. The majority of farmers’ problem is linkage; they just need to be connected with the agro-dealers so they can get the seed, fertilizers, and safe deliver of their harvests to the market. And once they produce, they can aggregate it and sell it at a good price.

We also support the enabling environment, which means working with the government to make sure that the necessary policies and protection are there. At the end of the day, we need to build the capacity of the government. They are the ones we are making sure we align with, since they will take it forward. We can show it on a small scale for the government to expand it at a larger scale.

The climate smart market systems project in Amhara region that we piloted, is now being rolled out to all over Ethiopia, modified depending on the region and soil conditions. The value chain may be different, but in terms of supporting the full spectrum of the value chain, that’s what we do, so that farmers have the right tools and information on a timely basis.

Urban farming is something that is said will reduce food insecurity and that you are doing something along those lines. Can you tell me more about those projects?

Sure. When Farm Africa was actually set up, our attention was exclusively focused on rural farmers, but what has become very clear is that you cannot address the rural challenges if you are not addressing urban challenges.

Urban poverty is on the rise and food insecurity is becoming as critical as those in rural areas.

The government requested us to support them on how to improve urban agriculture. With that, we started to pilot a project in the Ministery of Planning and Development’s compound because they have the space. We have started testing out the pilot phase, trying to look at what urban agriculture looks like, if it is sustainable, and how the farming methodology works.

We are now actually setting up; the clearing has been done and the design has been finalized. We are left with the planting processes, and we hope in the next couple of months to have the first produce available. It’s not just crops we are producing. We are also piloting fish as well as poultry so that everybody can practice it.

If you were to go to rural areas, there is space, you can do horizontal farming, but in urban areas, we don’t have that space. However, vertical agriculture is the answer. We are coming up with new kinds of innovative ways to produce food at a scale that is required to feed the local community. We are working with around 105 households for now, including women and unemployed youth. We just started that this year. So, it’s still at the early stages.

So what can urban settlers do? Like you said, these projects will encourage them, but considering there’s inflation now, there’s even more food insecurity, which is compounded by the war.

That’s why we encourage the use of your back backyard or whatever space you have. It does not require space. What we are trying to show is that you can do this vertical farming. Within a limited space, you can actually produce enough, to feed your family at a lower cost because inflation is becoming an issue. Families are barely feeding themselves, so at least it supplements their food intake and more importantly ensures nutritional balance.

Scholars suggest encouraging farmers to diversify their source of income to fight food insecurity. One of the options is to promote off-farming activities. Is that being implemented? If so, is it working?

Unfortunately, this concerns the lack of knowledge. The diversity is not as much as you would expect it to be. As part of the business development, we exclusively focus on income generating activities that you can do beyond agriculture. You need to diversify.

The coffee producers used to only produce coffee and farm forests. So, instead of farming the forest and cutting down trees, we showed them they can do forest honey, forest coffee, incense and other products, helping them to diversify their income stream.

A lot of the evaluation reports can be shared on, for instance, income. We increased their income by 143 percent. Not only were they able to increase the volume but also the quality. Now, almost all our projects, be it in Bale or Illu Aba Bora, all of them are now 100 percent export quality standard. And by supporting them change into a cooperative, they could buy better machines and so on, to aid in the quality of the product, instead of using traditional means and do less damage to the product. The coffee they produce now has scaled from grade six to grade one.

But you need to provide them the option and training, ranging from the know-how, all the way to even financial literacy. We do a lot of voluntary saving and loans, by setting them up with associations so that they are able to save money and get loans to buy better inputs and be able to negotiate better with dealers.

Ethiopia has been hit by a drought recently and many cattle have died as a result. There are other east African countries going through the same thing, probably in countries Farm Africa is involved in. So why do you think countries like Ethiopia are being affected by these things more often than the rest of the world?

Unfortunately, we are still rainfall dependent and one of the biggest impacts of climate change is making this cycle of drought more frequent than ever before. It used to occur every 10 years or so but now it happens every two or three years.

So, unless we equip both the highland and the lowlands with the necessary climate smart interventions, they will still suffer. We have a huge project in Borena and mobilized fodder to be delivered as an emergency, because the animals are crucial for their livelihoods. I think it was reported to cost more than five million birr.

The second one was to make sure the ecosystem is protected because that generates the water that goes to the lowlands. The intervention here has a huge impact at the lower catchments. That is why you need to make sure your interventions are holistic. Just by protecting the Bale eco region, you protect 12 million people’s livelihood, livestock and food.

The support is not only in providing materials, but to improve small–scale irrigation, pound point constructions and watershed management, to become drought resilient.

Several projects have been implemented by donors and other NGOs that work on resilience, capacity building and the like. But soon after their launch and brief success, they dwindle out. What do you think is happening in the middle? Why does the impact subside quickly?

The problem lies in the projects design. You have to plan to make it sustainable. When we set up a project, we have to prioritize carefully. If you don’t do that, then what happens is you’ll just be replacing one challenge with another and the impact would be temporary.

Our intervention should be as a facilitator, not actors. If you become an actor, then you are disrupting the market. What we are trying to do is to become the catalytic process, by working clearly with the government, like the Ministry of Agriculture and other stakeholders, so that policies do not contradict.

When we set up the project initially, deforestation was very high. Awareness raising and capacity building campaigns were held not only with the government, but also the communities, on why they need the forest, and understanding why the forest was damaged was very critical.

By introducing a specific blend of coffee, which grows under a shade, to farmers, which fetches a higher market price, the community has started to protect the forest by themselves. By giving them ownership and accountability, when you leave, it will not stop.

That is why you have to be very careful and make sure you have addressed the challenges that surround it.

You mentioned traders usually get more money than farmers, and Farm Africa is doing things to help in this aspect. Could you elaborate more on that?

First, you have to improve their yield per hectare because they usually sell it to the local market due to the low yield of crops they harvest. So, increasing the yield per hectare and then the quality is crucial. Empowering and connecting them with the market also helps them know the market value of their products.

women are paid less in the coffee sector, even though they do just as much, if not more. Is there anything done to empower women into joining the sector?

We assessed where women were involved in the value chain of coffee. The majority of women were found at production sites, such as planting or coffee picking, but you see them less involved as you go higher in the value chain. That is why they earn less because they’re at the lower end of the value chain.

We are trying to build the capacity, knowledge and their participation at the higher end of the value chain and make sure they’re involved outside of the production itself. They must have the power and skills to take their matters to the union and get better prices. And in parallel, find them the necessary financing. That is why around 80 percent of our beneficiaries are woman.

Do you get resistance from the community while doing this?

Not so much. We undertook awareness raising campaigns before we started, to make sure they understand why not everybody had to be part of the growth, but nobody should be left behind at the end of the day either. That’s our principle.

Since the demand for coffee is so high, they don’t see it as competition, they just need more support. It is usually competition that makes you push each other a lot of the time, but now the demand is so much, especially for forest coffee, what’s available is not enough.

Unfortunately, the drought has affected us this season and the amount of coffee we are selling this year is going to be less than last year.

Is there any forecasts as to what the effects of the drought will look like in the coming few months?

No, we have not done that per say, but I know FAO is working around the forecast. We’re coordinating, collaborating and sharing our lessons, not just with likeminded NGOs, but with the government and donors, so that our aggregated knowledge can be able to solve the problem. We are also coordinating with the Disaster Risk Management Commission right now, chaired by the FAO.

Another major problem in Ethiopia’s farming sector is landlessness. Authorities would like to hear recommendations to avert problems arising due to landlessness. What would you like to recommend in this regard?

So, we are not going to solve the issue of land, but what we can do is to come up with ways that we can use the land efficiently and effectively. Once the farmers understand how to increase their yield per hectare, they can increase their labor input as well.

For example, when one of our coffee farmers started working with us, he could barely feed his kids or even send them to hospital. Now, from the coffee sales, he has not only generated substantial income, but has also diversified and is setting up stores in Bale. He also managed to employ 24 youth to help him in the coffee production.

So that’s how we address it by making sure you are climate smart and generating the number of jobs needed to absorb landless youth. Otherwise, you cannot solve the land issue, what you can do is only give access to it.

There are a lot of mechanisms you can do to address the issue. But from Farm Africa’s point of view, what we’re trying to do is to increase the yield per hectare and capabilities of farmers, so that they can hire more people.

From your experience, what has been the hardest thing to overcome in Ethiopia?

We haven’t been able to address or mitigate the impacts of climate change. For me, it’s always been three steps forward and three steps backwards, but we are going in the right direction. Until we address and minimize those impacts and make sure that the farmers move from rain–fed agriculture to a more sustainable climate smart agriculture, it will be difficult.

Access to information and inputs is crucial. We are doing a lot of studies on value chains, different crops and fruits and pulses, and are we disseminating enough information to everybody to make an informed decision, so that they can produce what the market wants.

If you go to speak to most of the farmers in rural areas, they produce using traditional practices. If they do not wait for rain anymore, then they can produce more harvest per year.

Does Farm Africa work on logistics as well?

No, not on logistics, but we try. What we are trying to do is to connect them with the dealers so they can come. The dealers will only come if they can find value. That is why we want to make sure the farmers are organized in cooperatives, so that when they come for the coffee, they can get 40 tons to 50 tons. The volume will make it interesting for the private sector. But, the private sector has to be part of the solution as well.

Do you have any comments regarding the crisis that is going on in the country right now and how it’s affecting the agricultural sector?

As an NGO, we are not allowed to talk about it. We are not allowed to talk about rights. But, Farm Africa is committed to support the reconciliation and recovery process. That’s where we can come in because we are not even a humanitarian organization. So, we can’t even support these kinds of interventions.

What we can do is once stability and security is established, we can quickly go in and support farmers to quickly recover and catch up with the coming harvest season. So, through the post conflict recovery, we have a lot we can contribute, but beyond that, not so much.

Is there anything you’d like to add that would help authorities, individuals or farmers?

Working with farmers is still the solution. They have the knowledge and know-how; you just have to be the catalyst to help them and enable them achieve their goals. We want to make sure the economy thrives.

We need to improve our productivity and production. Everyone including the government, NGOs, beneficiary communities themselves have a role to play to contribute to this. If we do that, we are able to not only feed our own society, but be able to export and help others.

Eskinder Nega is a household name in Ethiopia. Known for publishing newspapers with articles critical of the government, Eskinder has been in the media industry for over 25 years. In 2019, he established Balderas Political Party.

Though he lost the last election to the ruling party, he is still actively participating in political matters. He was among the people arrested in the aftermath of the killing of Hachalu Hundessa and was released a year and a half later on January 2022.

The Reporter’s Amanuel Yilkal and Samson Berhane sat down with Eskinder to understand his journey in the media industry and politics. Excerpts:

The Reporter: Let me take you back to the 90s when you started publishing Ethiopis after your return from the US. How were you attracted to the media world?

Eskinder Nega: I lived in the US for many years. When I returned to Ethiopia, the country was in the midst of changes. There were many magazines, while the only privately-owned newspaper was Eyita. The magazines were not assertive and they feared criticizing the government and its policies. They used to beat around the bush.

I was able to learn a lot from the media environment in the US, which is free to criticize the government without being censored. It is not because I am a daredevil (Jebdegna) as some see me but since I was aware of the media landscape in the US, I wanted to try a new thing.

Then I started publishing Ethiopis, a publication that was ardently challenging the ruling government back then. It continued till October 2006. Ever since I started publishing the paper, I was a target of the Tigray People Liberation Front (TPLF). I was in custody for over 10 years in the period of the TPLF-led government and another one and half years after the then Oromia People Democratic Party (OPDO) started to lead the country.

You were arrested for the first time due to a column dubbed “Fascism in Tigray” that appeared on Ethiopis.

“Facism in Tigray” appeared in the second edition of Ethiopis. The first edition’s cover story was the “killings at Sidst Kilo.” It was initiated after the death of students who opposed the secession of Eritrea from Ethiopia. It was a story that made officials angry. And when we published “fascism in Tigray” in the second edition, we became a target. May his soul rest in peace; Tesfaye Asmare was the Editor-in-Chief of the paper, while I was a publisher back then.

We did the “Fascism in Tigray” story because people in Tigray were not allowed to be a member of a party other than the TPLF back then. Those who did not become a member of the TPLF back then were not only being arrested but were also being isolated from Idir and other social institutions.

Many were isolated just because they didn’t want to be a member of TPLF. We opposed this in our article. The situation in Tigray was no different from totalitarianism, while what was happening in Addis was authoritarianism. The TPLF was controlling every step of the people in Tigray, where there was no freedom of press. In Addis, there was a freedom of press, though it was limited and was a show to create an image that the media landscape is improving after the fall of the Derg Regime.

You are saying the “Fascism in Tigray” column intended to voice the concerns of people in Tigray. However, this goes against what another newspaper of yours was publishing in a column dubbed “Wegid Yihuda”, authored by Tadios Tantu. Articles written under this column were for long criticized for belittling ethnic Tigrayan’s.

Whenever you criticize dictators, they always give you a name. When we were publishing Wegid Yihuda, there was always another article that argues against what was written in it. The column always revolved around the history of Ethiopia. It discusses about King Yohannes IV.

When the British Empire invaded Ethiopia, it was him who received their army at Hamassien. This led to the death of King Tewodros. Tadios Tantu argued this is a betrayal and TPLF is born from such a history.

Do you consider this story as a common history of Ethiopians? Or are you blaming one ethnic group for it?

When Yohannes IV allowed the British to enter Ethiopia, he was not alone. He was assisted by King Teklegiorgis (also known as Wagshum Gobeze) who allowed the British to go through his territory to Mekedella. All of these are a part of our history. Yet I believe we did not learn from it. That is why I allowed the column to be published.

However, I have not gone through each of the words of the articles appearing on Wegid Yihuda. At that time, I was editing stories appearing on three publications with a scarce resource and professionals. We used to call it guerrilla journalism. While fighting the government, we were facing critical shortage of resources. In the midst of such challenges, there were several points that were published, though they were not supposed to be printed.

However, the aim of the article was not to disparage the image of Tigrayans. I never have been an enemy to Tigrayans and I will never be. The same goes with Oromos, even though many accuse me of being an enemy to the Oromo people. We were accountable to the contents appearing on the newspaper. We may have made some mistakes.

I cannot say mistakes were never made when we were publishing articles under the column. I apologize if we made a mistake and for the error. Yet, one thing is for sure, it was never our intention to portray the people of Tigray as our enemy.

You have been given several awards while you were in the media sector. Many also say you have paid a big price for journalism, while some claim that you are an activist rather than a journalist. For you, what are the things you have contributed for the development of journalism in Ethiopia?

Journalism can only prevail in a country where democracy exists. When you try to practice pure journalism in an undemocratic state of affairs, you face several challenges. Undemocratic elements of state target you not because you do not follow the ethics of journalism; rather it is because they don’t want to accept the truth or the reality on the ground.

It is the lack of objectivity that strains your relationship with the government. It is because a dictatorial government doesn’t accept the ethics of journalism. Under such a state, you cannot practice your journalistic profession and when you fail to do so, what you do is fight for your rights. You will also be forced to be an activist, a reality that you must accept because of the situation on the ground. The press in Ethiopia passed through such challenges. Our first aim was to practice journalism.

However, in our second edition, after we published the “fascism in Tigray” story, I was arrested and tortured at Meakelawi Prison. Since then, I was fighting for my rights. On one hand, I was practicing journalism. On the other, I was practicing activism.

We were not able to bring the experiences of the west and practice it here. That happened because we were operating in an undemocratic state, while the opposite is true in the western countries. Of course, when we build a democratic state, it will be the right time to talk about journalism.

Why did you become a politician before exercising what you called “pure journalism?”

In 2006, the TPLF suspended licensing of media outlets. When we got out of prison in 2007, we were hoping everything would go back to what it was and we will be allowed to reopen our media houses.

However, the TPLF-led government refused to give us a license. I then decided to become a human rights activist. I was arrested again in 2012 and remained behind bars until 2018. I then started publishing Ethiopis.

Soon after, the issues of special interest on Addis Ababa became a public agenda. To respond to this, I became an advocate and founded a civil society organization. However, we were not able to get a political party that pushed for the implementation of what we were advocating as a CSO. That forced us to transform the CSO into a political party and I became a full-time politician afterwards.

When you founded the party, you were saying your goal was to fight for the rights of residents of Addis Ababa and even Balderas is registered as a regional party of the capital city.

However, after your release from prison recently, you claimed that your plan from the beginning was to establish a national party. Is that not contradictory?

The problem of Addis Ababa is an outcome of nation-wide problems. Addis Ababa is not facing a challenge of its own. Its current problems are born from a dictatorial form of government. When we founded the CSO, our aim was to avert problems faced by the city and its residents.

We were hopeful that EZEMA [Ethiopian Citizens for Social Justice] will achieve what we wanted for the city, but that failed to happen. When we were opposing against special interest of Oromia in Addis Ababa, we went to the public to sell our ideas. Beyond that, we picked EZEMA to make our objectives a reality.

EZEMA’s closeness to the ruling party did not comfort us. In fact, EZEMA was the flip side of the coin when it comes to the ruling party. As we were not able to get a replacement, the public started to ask how we are going to implement what we wanted at a policy level. As a response, we established the party. However, as there were only four months left for the election, there was no time to establish a national party. That is why we were limited to Addis Ababa.

But as I said earlier, the problems faced by Addis Ababa can only be solved if national problems are solved too.

As a party that claims to fight for the rights of the residents of Addis Ababa, for you, what are the major problems faced by the city’s residents.

Residents of Addis Ababa want to see a democratic Ethiopia, a country with no risk of disintegration. They want a united country. Secondly, what they want is a universal democracy.

It is not a system of government that we create together as the current Prime Minister does. They want a universal democracy that is being practiced in the US, West Europe, India, South Africa, Japan and many other countries. That is what Ethiopians want. It is no different for Addis Ababa, who has the same vision for their country as other Ethiopians do. There are many problems born from a dictatorial government. The issue of special interest in Addis Ababa is also an outcome of such a system.

As home to several ethnic groups, there is a need for the introduction of more working languages in Addis Ababa.

After Prime Minister Abiy Ahmed (PhD) came to power, a new policy has been put in place that aims to increase the working languages of the federal government to five.

That did not follow the right procedure. It needs a legal amendment. The law works for everyone. Especially the government, it has the responsibility to uphold the law. At the national level, we all agree on the need for more working languages.

However, in Addis Ababa, there is no need to add more working languages. Amharic is enough. I never heard the people of Addis Ababa demanding for more working languages.

But there are ethnic Oromos demanding for the addition of Afan Oromo as a working language of the capital, along with the Amharic language. Have you ever conducted a survey to reach to such a conclusion that there is no demand?

I never encountered such a claim. Let alone in Addis Ababa, there was no such a demand even in cities surrounding the capital. Even in rural parts of these cities, residents speak two local languages, including Amharic.

We have not conducted a study. But we did not come across such a demand. I will apologize if I encounter anyone asking for the introduction of more working languages.

Critics say your party focuses on fueling violence. Your party is present wherever there are protests or riots. And you are rarely seen coming up with policy recommendations and solutions for problems faced by citizens. How are you going to address this criticism?

Some say we focus on issues of little importance to the public. That comes from two directions. The first is a concern coming out of kindness. The second is an attempt to silence us. And it is also an action taken to imprison us again.

There are people who believe things that we are giving an emphasis, like demolition of houses, can be solved by taking administrative measures. We have to awaken the public by publicizing and following each problem. We want to make the public aware that a problem that compromises the existence of Ethiopia as a country is happening and they must debate on it.

Supporters of ethnic federalism argue that regions should continue to have the right to secede. However, you argue that secession should not be allowed. Is that not against democracy?

Take India as an example. It is a model of democracy. But it does not allow secession. See the case of Kashmir. The Muslim majority living in the city want to secede from India and be part of Pakistan. That was why they were fighting an armed struggle for the last 80 years. There are also Indian states that want to secede but the law of the country prohibits them from doing so. The same is true in other democratic states, including South Africa and Nigeria.

In Nigeria, the attempt to secede Biafra failed, while the country’s law bans any federal state from doing so. Yet this does not make Nigeria an undemocratic state. The issue of the Catalan’s is no different. The administrators of Catalonia held a referendum and declared independence from Spain. But where are they now? They are in exile in Belgium. So does that mean Spain is not a democratic country? No!

To ensure the existence of Ethiopia and avoid of the risk of disintegration, secession must be prohibited. It is not Balderas that came up with such a rule for the first time. It is based on the experience of many countries across the world.

Agriculture is still the main driver of the economy, whether we like it or not. And we have to make sure it contributes to the GDP as its intended. I think we just have to keep our eyes on the ball.

We have collaborated with other organizations in order to increase our capital as well. Upon our establishment, our bank had one billion and fifty six million birr. Next year, we are planning to raise two billion birr by selling two million shares. We will give first opportunity to buy shares to existing share-holders and then it will be open to the public. The government has set out a rule whereby private banks have to have seven billion birr in capital in the seven years. We have six years to raise the other five billion birr.

We have collaborated with other organizations in order to increase our capital as well. Upon our establishment, our bank had one billion and fifty six million birr. Next year, we are planning to raise two billion birr by selling two million shares. We will give first opportunity to buy shares to existing share-holders and then it will be open to the public. The government has set out a rule whereby private banks have to have seven billion birr in capital in the seven years. We have six years to raise the other five billion birr.

Ethiopians have demonstrated on ample occasions that they will never tolerate anyone bent on advancing their selfish political agendas by sowing instability and thereby jeopardize Ethiopia’s very survival. All political actors need to abide by the notion that each and everything they do must be guided by the vital interests of the country. They also ought to realize that Ethiopia is much more about than the trappings of power, bankrupt ideologies belonging to the dustbins of history, manufactured historical narratives, ethnic and religious identities, and obsession with flags and emblems. It’s then that its citizens can embark on the journey to building a democratic nation that is the epitome of strong unity, durable peace, and sustained economic growth.

The panoply of challenges facing Ethiopia and its people show no sign of respite. Though active hostilities in the northern part of the country, have almost stopped after the forces of Tigray People’s Liberation Front (TPLF) were pushed back to Tigray from most of the territories they had captured in the adjoining Amhara and Afar regions, the security situation in a number of areas of the nation is fragile owing to the interminable endless cycle of violence that has been racking them for years now. Aside from the death of tens of thousands and the displacement of millions frequent outbreaks of internecine conflicts have led to, the unchecked rise in extremist attitudes, the cost of living, corruption, and land grabbing, among others, have made life an ordeal for the vast majority of Ethiopians. It’s in this backdrop that an incident, whose fallout could potentially plunge Ethiopia into a crisis of catastrophic proportions, recently took place.

On March 29 at least 26 people were killed and several more injured in clashes between armed groups hailing from the Minjar Shenkora Woreda of North Shewa Zone, Amhara regional state, and local militia in the bordering Fentalle woreda, East Shewa Zone of Oromia regional state. The blame game began soon thereafter with both sides issuing conflicting a slew of contradicting statements regarding the incident. Amhara region officials lay the blame on “anti-peace groups” whom they accused of perpetrating the attack. Their counterparts from the Oromia region though disputed the accusation, blaming the attack on “extremist forces operating in the Amhara region”. They also took these forces to task for displacing people and looting property in other woredas of Oromia bordering the Amhara region. It’s surprising that both the federal government and the ruling Prosperity Party (PP) have not made any overt attempt to defuse the tension between the Amhara and Oromia regional administrations even as both escalate the war of words among them.

The feuding between officials heading two branches of the ruling party cannot be confined to them given the party is still ethno-centric despite claiming to be a national party. In fact it has led to spats among major opposition parties active in the respective regions and social media activists, which are spewing a hateful rhetoric that could very well pit the Oromo and Amhara people, the two largest ethnic groups in Ethiopia, in a bloody conflict. The consequences of such a conflict are too horrible to contemplate. From a protracted and destructive civil war in which no side emerges victorious to a total state collapse all the scenarios facing the nation are lose-lose not only for its citizens, but also the Horn of Africa and beyond. It’s not entirely clear whether the protagonists to the ongoing verbal warfare realize that their actions are liable to lead to Ethiopia’s unraveling or are indifferent to the ensuing heavy price.

Ethiopians have demonstrated on ample occasions that they will never tolerate anyone bent on advancing their selfish political agendas by sowing instability and thereby jeopardize Ethiopia’s very survival. All political actors need to abide by the notion that each and everything they do must be guided by the vital interests of the country. They also ought to realize that Ethiopia is much more about than the trappings of power, bankrupt ideologies belonging to the dustbins of history, manufactured historical narratives, ethnic and religious identities, and obsession with flags and emblems. It’s then that its citizens can embark on the journey to building a democratic nation that is the epitome of strong unity, durable peace, and sustained economic growth.

Two pieces of legislation entailing catastrophic consequences for Ethiopia and its people are meandering through the United States Congress. The first, whose official moniker is H.R. 6600: Ethiopia Stabilization, Peace, and Democracy Act, is pending before House floor after it moved out House Foreign Relations Committee in mid-February. Entitled S. 3199: the Ethiopia Peace and Stabilization Act, the second was approved this week by the Senate Foreign Relations Committee for consideration by the full Senate. The bills require the President of the U.S. to impose sanctions on foreign persons the Administration determines to have “threatened peace and stability, undermined progress toward a ceasefire, obstructed humanitarian assistance, or violated human rights in Ethiopia.” They would also would suspend certain U.S. foreign assistance to Ethiopia and authorize the Administration to help entities investigate and seek accountability for war crimes, crimes against humanity, and genocide in that country. Furthermore, the bill would require the Administration to “develop and implement a strategy to promote peace, reconciliation, and human rights in Ethiopia and to report to the Congress on its actions under the bill and on other related matters.”

Ever since the forces of the Tigray People’s Revolutionary Democratic Front (TPLF) launched an unprovoked attack on the Northern Command of the Ethiopian National Defence Forces (ENDF), the bilateral relationship between Ethiopia and U.S. have broken down following the U.S.’ adoption a series of measures intended to arm-twist Ethiopia into choosing its side over China in the new cold war. Although the two countries have recently shown signs of improvements in their relations with the allocation of additional U.S. funds in support of different regional states and institutions in Ethiopia, the U.S. is still bent on applying more sticks than carrots to accomplish its strategic goal in Ethiopia and the wider region. The passage of these blatantly biased bills is sure to negatively impact Ethio-U.S. relations for they erode the trust, predictability and mutual cooperation on which they should be based.

What makes the contents of H.R. 6600 and S. 3199 more galling is the fact that they place no sanctions or threats of one against the TPLF despite its instigation, expansion and prolonging of the civil war as well as the commission of crimes of atrocities. In addition they fail to give due recognition to the steps the Ethiopian government has taken to bring a peaceful resolution to the civil war. Chief among these measures are the withdrawal of the ENDF from the Tigray region in June 2021 following the unilateral declaration of a ceasefire; the streamlining of aid delivery to the regions affected by the war; ordering the ENDF to not cross into Tigray after TPLF forces were routed from the positions they held in the adjoining regions they had invaded in December 2021; releasing several politicians, including TPLF leaders, from prison in January; lifting the six-month State of Emergency declared after three months; and declaring a humanitarian truce to facilitate the delivery of aid to the conflict-affected people of Tigray. Such inequity only serves to deepen Ethiopians’ distrust of the U.S. and its allies.

Punitive sanctions do more harm than good and seldom achieve their intended outcome. The US has not secured democracy, peace and stability by imposing debilitating sanctions on any country in the world. It is the poorest of the poor, low- and middle-income Ethiopians who will suffer the most by the passage of H.R. 6600 and S. 3199, not the government officials they target. The sanctions will adversely affect regions which have already been hit very hard by the war, including Tigray, Afar and Amhara given they make it very difficult to source the materials needed to reconstruct the health, educational infrastructure the war has ravaged as well as the resumption of other critical services. Moreover, by calling for an independent investigation into conflict-related human rights violations, the bills signal lack of confidence in the Ethiopian Human Rights Commission, whose report on a joint investigation undertaken with the U.N. Human Rights Commission on the war in Tigray, was endorsed and applauded. The debilitating impacts of the bills on a poor nation like Ethiopia will be devastating and apt to linger for years. This would lead to the very instability and fragility of Ethiopia that the U.S. ostensibly wants to prevent.

In a rare foray into engaging Ethiopians in candid dialogues since the advent to power of Prime Minister Abiy Ahmed (PhD) in April 2018, senior officials of the ruling Prosperity Party (PP) have fanned out across Ethiopia to hold dialogues with citizens from all walks of life. The discussions come on the heels of the premier’s pledge at the conclusion of last week’s meeting of the party’s executive committee that party officials would soon be dispatched throughout the country with a view to seek durable solutions to multi-pronged challenges in collaboration with the public. The party said the dialogue has two underlying objectives: informing the public about the decisions of the party’s first Congress held at a fortnight ago and reaching a consensus on the respective roles of the public and the government in the search for solutions. By most accounts the participants were apparently able to voice their views without any inhibition. Time will tell if the party is committed to heeding them.

The topics raised at the discussions largely coincided with the areas of focus PP’s congress vowed to tackle. Chief among these are the deteriorating security situation in large swathes of the country; the debilitating hike in the cost of living; the rise of extremism and exclusionism; and the proliferation of corruption and other forms of bad governance. The crux of the impassioned and sometimes angry views expressed by the public was that the blame for the current state of things squarely lay with the government. While some acknowledged that the plethora of problems besetting the nation and its people predate the government and thus absolve it of some degree of culpability, most did not buy into this line of reasoning saying that the government lacked both the desire and capacity to put paid to them. In fact, they argued, the rank of the government has been infiltrated by duplicitous elements intent on advancing their selfish interest or the sinister agendas of domestic and foreign enemies. The government would do well to take immediate corrective actions for the extent to which it genuinely responds to the demands of citizens will determine if and how long it may remain in office.

The gravest of the grievances voiced by everyone participating in the discussion forums is the cycle of violence that has been rocking Ethiopia for some years now. From the frequent outbreak of internecine conflicts and targeted attacks to the war in the Tigray, Amhara and Afar regions thousands of innocent citizens including children and the elderly have been butchered and injured with millions more displaced from their homes. Though the public has demanded time and again that the government protect its safety and security and bring the perpetrators of acts endangering its welfare, the latter has been found wanting when it comes to ending the recurrence of senseless carnage. The government’s predictable response to the calls for it to guarantee the fundamental rights of citizens to lead a secure life anywhere within the territory of Ethiopia has been to vow that it’s committed to upholding the rule of law. It must stop paying lip service to a matter of grave importance and back up its promise with action.

The second and equally pressing matter that arose during the course of the discussions was the backbreaking cost of living. The interminable escalation of the headline inflation rate has meant that life has become a living hell for the vast majority of Ethiopians and pushed a significant chunk of the population into poverty. There are a host of reasons driving inflation. One of them is the inability of the government to formulate and implement monetary policies instrumental to contain if not bring down the phenomenon. Its failure to allocate sufficient foreign currency to importers of basic necessities and eliminate the predatory behavior of unscrupulous market actors have further contributed to exacerbating the inflationary pressure. Although the government can do nothing to halt a significant contributing factor—the rise in the price of fuel and imported food items—it is incumbent on it to seek both short- and long-term solutions through meaningful consultations with the general public. Undertaking a course of action that does not take into consideration the views of everyone who has a stake is bound to fail miserably and worsen the problem. The serious ramifications of the spiraling inflation, namely stirring widespread public discontent that triggers political and social unrest, is something the government needs to wise up to and take appropriate steps to neutralize them.

As much as the government bears the primary obligation of easing the suffering Ethiopians are undergoing, it cannot succeed if it tries to go it alone. Aside from empowering political parties, religious organizations, educational institutions, civic and professional associations, elders, the youth and women to play an active role in the search for informed solutions, the government is duty-bound to clean its house and purge officials and functionaries in its structures who are complicit in the very problem they are supposed to fix. Important as organizing dialogue forums may be in garnering the views of the public, it’s paramount to ensure that they are inclusive. It’s only then that the government can effectively respond to the demands expressed by the public in the recent discussions.

As some U.S. lawmakers and lobbyists engage in a concerted endeavor to force Ethiopia into kowtowing to the demands of the West, it is incumbent on the government, people and friends of Ethiopia to do everything possible to foil their sinister design. While efforts are underway both at home and in the U.S. to stop H.R. 6600 and S. 3199 from seeing the light of day, they should be ramped up until the bills are defeated. It’s disheartening though to see some citizens and members of the diaspora community side with the sponsors of the bills. Ethiopians should not despair just because the bills have advanced to the House and Senate floors. In order for them to become law they will need a full vote of both chambers and the signature of President Joe Biden. There are several things that can be done in the meantime to ensure that even if the bills pass they are defanged and unrecognizable from their current form. It’s imperative that we keep up the fight to the death and resolutely defend our national interest.

The inability of the political class to resolve differences through discussions and negotiations has for far too long been a hallmark of Ethiopian politics. There is no disagreement under Ethiopian skies, however deep-seated it may be, that cannot be addressed through genuine dialogue. Politicians that truly have the interest of Ethiopia and its people at heart owe the duty to ensure that they comport themselves in a manner that advances the interests of the nation, not their selfish motives or the agendas of adversaries intent on doing the country harm. They need to work together to facilitate Ethiopia’s smooth transition to a democratic order, uphold the rule of law, and enable citizens to have access to justice. Furthermore, it’s incumbent on them to play an exemplary role in terms of, among others, rejecting discriminatory attitudes and practices, creating a mutually respectful relationship amongst themselves, and forging a culture of constructive dialogue. It’s then that the calamitous ramifications of the war of words between members of Prosperity Party can be averted.

The inability of the political class to resolve differences through discussions and negotiations has for far too long been a hallmark of Ethiopian politics. There is no disagreement under Ethiopian skies, however deep-seated it may be, that cannot be addressed through genuine dialogue. Politicians that truly have the interest of Ethiopia and its people at heart owe the duty to ensure that they comport themselves in a manner that advances the interests of the nation, not their selfish motives or the agendas of adversaries intent on doing the country harm. They need to work together to facilitate Ethiopia’s smooth transition to a democratic order, uphold the rule of law, and enable citizens to have access to justice. Furthermore, it’s incumbent on them to play an exemplary role in terms of, among others, rejecting discriminatory attitudes and practices, creating a mutually respectful relationship amongst themselves, and forging a culture of constructive dialogue. It’s then that the calamitous ramifications of the war of words between members of Prosperity Party can be averted.

Best known for playing a big role in establishing the Association of Chartered Certified Accountant Ethiopia (ACCA), Hikmet Abdella is currently the Director-General of Accounting & Audit Board of Ethiopia (AABE). She has been holding the position since 2019 after replacing Gashe Yemane, the founding DG of the Board.

Hikmet has been tasked to complete the path to full implementation of International Financial Reporting Standard (IFRS) in the next three years.

The Reporter’s Ashenafi Endale sat down with the Director General as she reflects on the path taken to make Ethiopia’s audit and accounting standard comply with internationally accepted principles and rules. Excerpts:

The Reporter: How is the progress of Accounting & Audit Board of Ethiopia (AABE) in professionalizing Ethiopia’s auditing system?

Hikmet Abdella: Financial statement is the cornerstone of any institution, whether they are business entities or NGOs. But Ethiopia had no financial statement standards for a long time and there were also no standards for professionals.

The Accounting and Auditing Board of Ethiopia (AABE) was established under such context. Before the AABE, the Auditor General (AG) used to provide licenses and undertake supreme audits for public institutions. So licensing auditors, accounts and firms was an additional job for the AG, at that time. It gave the licenses but had no capacity to control and regulate them.

A World Bank study in 2007 indicated that Ethiopia’s economy was growing faster and there is no accounting and auditing professionals that matched the growing businesses. The AABE was established based on this recommendation.

The AABE’s task is to license accountants, auditors, firms and regulate them. We also adopt and implement internationally accepted auditing standards in Ethiopia. These professionals undertake audits and submit documents to the AABE. We have a library of firms’ files.

Which companies are difficult to control? Which company structures are more complicated in Ethiopia?

Our prime priorities are Public Interest Entities (PIE) and the AABE is basically established to protect these entities from failing. If a company fails, it might not have much impact on the whole economy but if PIE fail it will have a wider economic impact.

Different countries have varying definitions for PIE.

PIE is defined qualitatively and quantitatively. For instance, financial institutions are PIE with huge numbers of shareholder’s with interests. They collect savings and give loans. So they must be protected from failing. Secondly, SOEs are protected because they are the highest taxpayers.

MFIs and share companies are our next priorities, while PLCs are our last priority. We don’t have to control vendors since they have absolutely no impact on the economy.

Every jurisdiction has its own definition. The AABE is currently developing its own definition for PIE and other business entities but we have to align with international standards.

Currently, a similar international definition for PIE is being debated and we have been participating in such debates virtually, due to the COVID-19. Probably by next year, we will have a new definition for PIEs. But there will not be much deviation from what we are using now.

The AABE’s task also relates to domestic resource mobilization. Big companies have to generate big taxes and the AABE controls big business entities strictly, than small businesses.

Ethiopia’s private sector is very new. It has only been 30 years since the communist regime changed and the only big players are financial institutions, followed by other share companies.

Generational companies, that have passed from generation to generation, have also a big role to play and we must be able to maintain family owned enterprises. They usually lie in the middle, between small and big companies.

Family owned enterprises, if well nurtured, can contribute up to 50 percent of the tax revenue. So they should be considered as PIE. But in Ethiopia, family owned enterprises are dying out currently, due to various reasons.

Scholars argue that the tax base should be diversified in Ethiopia. Is it big companies or small businesses that pay more taxes currently?

It is a matter of context. Large taxpayers have to get incentives in different mechanisms, so they can grow more robustly. A country cannot grow without diversifying its tax base at a small business level.

The number of taxpayers in Ethiopia must grow. Many small companies, pooled together, bring huge sums of tax revenues. But the tax authorities must be careful not to squeeze small businesses through stringent taxes. Small businesses must be relieved from stringent of taxes, so they can grow.

What is the AABE’s capacity in controlling and regulating Foreign Direct Investments since Ethiopia’s economy is integrating into the global economy?

The Prime Minister recently stated that the financial sector will open up. And the ongoing liberalization and privatization, as well as the World Trade Organization accession, need ultimate caution. It is good that big foreign players are coming to Ethiopia. But all regulatory institutions in Ethiopia, including the AABE, must sit down, and discuss whether we can handle it or not.

Ethiopia’s economy and regulatory institutions have been closed for a long time. Even neighboring countries have more capacity when it comes to regulatory capacity. There are also differences but we cannot remain closed. We must look for methods to bridge the regulatory limitations.

The east African block including Rwanda, Uganda, Kenya, have a system in which accounting and auditing professionals can move freely from one country to the other.

When Ethiopia opens up, they will bring their own systems and professionals. Ethiopia must produce its own professionals to control foreign firms. Currently, Ethiopia has no sufficient accounting and auditing professionals to support the economy.

We are currently preparing to establish the Ethiopian Institute of Certified Public Accountancy (EICPA). Hopefully, it will be operational this year and start to produce professionals. If you go to Kenya, there are close to 40,000 professional accountants but Ethiopia has around 250 professionals. We cannot support or handle the opening-up of the economy with such meager figures.

The Capital Market is nearing realization in Ethiopia, which requires precise and highly trained professionals. PIE will be affected if we launch a stock market without skilled professionals. In some countries, only firms listed on stock markets are considered PIE.

As soon as the stock market is opened, banks will be the first to be listed. These institutions must be valuated every three months, instead of annually as before.

Unless we have professionals to value the Initial Public Offerings, public interest will always be affected. Even statements made by politicians can affect the value of an IPO; so the listed firm must be valuated frequently. This is impossible without qualified accounting and auditing professionals.

Officials at the National Bank of Ethiopia are saying it will take three years to create a fully-fledged stock market ecosystem. Can we reach that with the absence of professionals?

Big things can be done in three years. With the EICPA established now, and is backed with a sufficient budget, we can generate 5,000 professionals annually.

There are already many graduates but there is much to be done to create the right stock market ecosystem. Public interest must not be affected, until we try to fill the gap in lack of professionals.

There are many distortions in the commodity value chain and malpractices in the corporate world in Ethiopia. Even recently, importers and wholesalers have been blamed for hoarding edible oil, which has caused a crisis. Do you think the AABE has created a good corporate culture in Ethiopia?

We did not achieve much progress. There is no responsibility. Do you think money laundering is done without the knowledge of accountants? Is the accountant responsible to the public, government, or the company owner?

Ethics is the biggest problem. Accountants can build or destroy a country. The demand for accountants is always up, even at war times. Accountants can change small money into big, or vice versa.

Currently, Ethiopia is negotiating to start the Africa Continental Free Trade Area (AfCFTA) and also the WTO. It should be accountants that represent Ethiopia on the negotiation table. Accountants know what the agreement articles mean. They can tell you what it means ten years from now.

Does the AABE work with the auditor general? Do you have the capacity to take action on accounting misbehaviors?

The Auditor General audits institutions and we produce the professionals. We do not audit public institutions. We do SOEs, private companies and NGOs and the Ministry of Finance reviews the financial statements. Currently, we are reviewing SOEs parastatal financial statements. We will discuss with the PEHA, the MoF and the AG next week.

Ethiopia embarked on the road to privatization and liberalization three years ago to shift the economy from state-led to the private sector. But currently, regional states are building their own conglomerates, while the federal government also establishes the Ethiopian Investment Holding. Do you think this can create productive and efficient firms in the economy?

That is a difficult question. What is for sure is less is done concerning financial statements. Many SOEs, endowments and other firms vanished, or merged, without any consultations with the AABE.

There is a huge problem on this issue. There is no procedure at all in cases of shutting down SOEs, mergers or creating a holding company. Assets, liabilities and other complexities go without proper accounting, especially in mergers. Firms usually close or merge in the middle of the year, before the fiscal year ends and a financial statement is compiled. This is a big problem.

Usually, the Cabinet of Ministers decides on the formation, closure or merger of SOEs.

I have no knowledge on why the government is making changes when it comes to its role in the economy. But strengthening parastatals is common in many countries. We are also seeing progress to accede to the WTO.

Is there capacity to regulate foreign firms like MPESA and are foreign banks allowed? Do you think banks can survive foreign competition?

Ethiopia’s financial institutions are better than where they were ten years ago. If a single foreign bank had come ten years ago, local banks would have never survived, even if they merged into one.

But now, local banks are stronger. The problem is, local banks cannot grow more than they have now. They cannot diversify their products anymore and are very similar. If foreign banks or MPESA come, more products can come with them and support the economy.

But the banking sector will not be opened at once and will be gradual and managed. Unless the regulatory capacity grows parallel and equally, Ethiopia will be in danger.

What do you think is the competitive edge of local banks?

There is not much but their organic growth is very appealing. But the quest for access to finance in Ethiopia is beyond the capacity of existing banks. The economy grew very fast but the access to finance did not.

Even now, we are facing a liquidity problem, which has affected the construction industry due to the lack of credit. The construction industry massively contributes to the economy. But it depends on finances.

The return on shares also remains very positive. But some banks are reaching their ceilings. Many people bought shares because there were no other alternative investment areas at the time. And once the stock market is opened, there will be more opportunities, even for the layman.

Did the new Commercial Code, which was amended after 62 years, bring changes to company structures and accounting systems?

Allowing the creation of a holding company, one person PLC and other minor changes have occurred. The code also allowed foreign accounting firms to come to Ethiopia. The big four, which include KPMG and PWDC, are allowed to operate in Ethiopia.

But these international financial institutions can only partner with local companies. They are allowed to have a 49 percent stake. They are currently requesting us for a license. This is one of the signs that the economy is opening.

The big four will have a big role in capacity building but are very unhappy with the 49/51 proportion. But for me, it is perfect.

So auditing is allowed for foreigners now?

Yes, but this was only made possible after the commercial code was amended.

Recently Ethio telecom’s CEO, Frehiwot Tamiru rejected the 80 billion birr asset valuation of the company. Some say the low valuation is intentional, and conspiracy concerning the valuator has been raised.

I am very concerned of the valuation issue in Ethiopia. Valuation is one input for accounting. In the old days, the value of vehicles dropped every year and on the tenth year, the value gets to zero. The Tax Law also states it must depreciate by ten percent annually. The IFRS states an assets value must be stated in its current market value, which shows the true value of a company.

In Ethiopia, the value of vehicles keeps appreciating. A Toyota bought with 200,000 birr ten years ago is now 2,000,000 million birr. So according to IFRS, the vehicle is worth 2,000,000 birr. But the tax system does not demand depreciation.

Who is the right valuator in Ethiopia? There are only three certified valuators in Ethiopia.

The conspiracy issue when it comes to foreign valuators is not a new issue. That is why I say the opening up of the country must be cautious. Ethiopia has been closed for so long that the process must be done step by step. The reasons why the big four hate the 49/51 ratio is because they want to come at once and manipulate the weak regulatory system.

Whatever your background, you care about your country. But foreign firms care only about their profit. The loyalty of their accountants and auditors is not to the Ethiopian public or the government. It is for their parent company abroad. This is why we must produce our own professionals, to maintain the balance.

Which institutions have shown progress in implementing IFRS?

That would be financial institutions. They have the money and IFRS is expensive. If a company can afford the expensive professionals, it is simple to implement IFRS. There is a huge demand for the professionals, but there are very few. The demand shot-up since the AABE came.

Financial institutions are implementing IFRS because they have the money and managed to engage international financial consultants, but SOEs are the first to bring an IFRS report four years ago.

Banks are blamed for engaging in informal financing including the black market, and informal Hawala services. Do you think IFRS brought transparency to the banking system?

Every time an economic system is closed, informal doors are opened, including corruption. Many problems will be solved, if the economy is opened but as long as it remains closed, it creates many loopholes.

New banks have come into the picture in the past three years. But lately, the PM has said the sector will open up soon. When should it be opened?

When foreign competition comes, it will be all about survival of the fittest. How long will it take for our banks to be fit? If they have to merge to be competitive, let it be. Mergers should be encouraged. It is better to have a few strong, internationally competitive banks than many banks.

So far, Ethiopian banks are not even going into regional states, because they did not even satisfy the urban clients while Kenyan and Nigerian banks are working at continental levels. That should be our direction.

What would be your expectations of the upcoming stock market?

It will engage the ordinary people. Only few have been able to buy bank shares. But in a capital market, people can have a stake in the stock market. Anybody can invest in profitable businesses, in a stock market.

Will the EICPA produce professionals for the stock market?

Yes. The institute will generate mainly certified public accountants, to address the diversified demand of professionals from different institutions.

Various institutions want to install their own institute to produce such professionals. But that would be unaffordable. So it should be the EICPA that branches-out and addresses these diversified interests.

Who will be listed on the IPO first?

Financial institutions, then SOEs, share companies, and family owned enterprises. The last one may need discussions on whether they want to go public.

Cross listing is also possible. For instance, companies like Coca Cola, which are listed in other countries and also operating in Ethiopia, can be listed in Ethiopia.

Why is it still difficult to solve under-invoicing and over-invoicing challenges in Ethiopia’s import-export business?

Our concern is how to address it through a transparent accounting system. But there are varying scholarly debates on this issue.

Lately, the Ethiopian Investment Holding company has been formed to be an umbrella company for SOEs. Do you think such a mammoth holding company, run by a government, can be efficient given that SOEs are known for wasting resource?

I believe such trend of creating holding companies is a good start. If there is a strong accounting and valuations system, SOEs and holding companies can be efficient.

Liability and asset management company (LAMC) was also recently formed to soak up SOEs’ debts. Credit default swaps, or trading credit derivatives, is common in other countries. In Ethiopia too, some banks are buying defaulted debts from prospective enterprises. Do you think the trend is recognized by the AABE in Ethiopia?

This area should be researched. Many new trends are emerging in Ethiopia’s economy and its contribution must be analyzed.

Before the Ukraine war and COVID-19, scholars were saying globalization is invincible. Now, self-sufficiency is becoming irreplaceable. We have been dependent on FDIs, but they abandon industrial parks when they want. Yet, Ethiopia is pushing for privatization and more integration in the international economic system.

Don’t you think it is time to focus on economic sovereignty, including import substitution? I am not talking about closing the economy, but where should be the boundary?

No country is economically self-sufficient, including the US. Their economy was stuck when Chinese supply declined during COVID-19. Many companies closed in the US, because the supply chain was disrupted. Ethiopia cannot think of self-sufficiency with a nascent manufacturing industry.

But I believe it is time to re-prioritize our policies. Especially, our negotiation skills on international economic activities must grow. The level of our negotiation skill determines the level of external debt stress on our economy.

Many countries have long term plans, up to a century. We must be clear and have a realistic plan on where we want to go in the long term, regarding self-sufficiency, import substitution, even on Chinese imports. For instance, we export oilseed and import edible oil at expensive prices. This can be replaced locally.

Many investments were damaged due to the conflict in northern Ethiopia and COVID-19 pandemic before that. Can they be compensated rightly?

Knowing their accurate accounting is critical, to determine their losses and compensations. We also need to produce professionals on investment insurance policies.

How man licensed auditing firms are there?

Basically, the AABE gives two kinds of licenses. Authorized accountants prepare financial statements. There are around 2,000 authorized accountants, at federal and regional levels and there are 162 independent auditors.

What are its challenges?

There are many challenges. The AABE is a regulatory body. We are expected to have much more capacity than those we control. One of the challenges relates to professionals earning more money if they operate privately, than work for the AABE.

Professionals in regulatory institutions, have less incentive. If the professionals have more power than the regulator, it is difficult to regulate. For the time being, the board is using consultants who are paid by the World Bank, with approval from the Ministry of Finance.

ACCA supported us too. Currently, the AABE is in good position. We know how to review audit reports, and control licensed professionals. Some companies take up to four years to finalize financial statements, but we always begin to review from the first year.

The world is celebrating March 8th. Do you think the affirmative actions provided in Ethiopia have really empowered women?

I do not know what incentives are provided. March 8th is good to highlight the challenges women face. But nobody cares about the details on normal days. Those women like us, who have succeeded, should share our experiences and become role models to young people. We have much homework ahead.

The statistics of women in higher corporate and leadership positions, is alarming. I think there is only one bank president currently and this is not because women lack capacity. If you look at the boards of banks, women constitute less than 10 percent. It is the same in SOEs.

Our definition of democracy is distorted. Ethiopians think ideological semblance comes from similar people. That is wrong. Successful women must nurture the young.

Some European banks which survived the 2008 financial crisis, were banks led by women. Do you think making women CEOs is a guaranteed success?

Women have different management philosophy than men. Women lead with humility. It is not because we have more capacity but because we have intense concern for humanity.

Usually women empowerment issues are used or raised during March 8th or elections. When will equal opportunity become embedded in the publics thought?

We live in a man’s world. The existing trend must change completely, to accommodate women. A new world and country that equally accommodates women and men must be created.

Radical feminists argue a new social order should be created from scratch.

That would be good, if it is possible.

But other groups argue the existing world can accommodate women, with some adjustments.

I agree with this one. But I do not think we should try everything foreigners tell us, especially on feminism. Context and culture are very important. Ethiopia has a different context from the west. We can create an indigenous system for Ethiopia.

First, we have to reconfigure what the education system, society and the media tells about equality. The narrations and practice must be seamless, while extremist views on gender issues only harms the efforts.

If completely erasing the existing system and creating a new order is possible, it should have been simple to reshape the country.

For instance, there are some jobs where women earn less for the same position. Can it be solved by policy actions?

There are various challenges posed on women, some to be solved by the government, some by the private sector, or the society. For instance, board compositions can be solved only by policy. Chambers can also do more work to bridge the inequality gap. And some challenges are inherently solved through time.

There is this discussion over equal opportunity versus equal outcome. There is opportunity for all. Both boys and girls go to school. But that equal opportunity does not continue. Women give birth and then must take care of children.

The inequality will change as more women come into leadership roles. No challenge can be solved overnight, through policies or campaigns. For instance, the AABE can play a role in board compositions because corporate governance is one of its tasks.

Sewagegn Chane is director of the Public Financial Institutions supervisory department at the Public Enterprise Holding and Administration (PEHA), which regulates state-owned enterprises. Sewagegn is currently responsible for directly supervising the Development Bank of Ethiopia (DBE) and the Liability and Asset Management Corporation (LAMC). The Commercial Bank of Ethiopia (CBE), Ethiopian Insurance Corporation (EIC), and the National Lottery were also under his supervision, until they are transferred to Ethiopian Investment Holding (EIH) past May.

Working in public financial institutions for 30 years, Sewagegn initiated the establishment of the stock market in Ethiopia, which is bearing fruit eleven years after the first feasibility study. He was also vocal and key in rescuing the DBE, initiating Ethiopia’s first reinsurance company, Takaful (Islamic insurance), among others.

Sewagegn is also researcher at i-Capital Institute and organizer of the East African Finance Summit. Currently, he is leading two teams formed at the institute, studying the establishment of an investment and agricultural development banks in Ethiopia. Although he has been advocating ending state protection over the financial sector for years, he has currently changed his mind, just as Prime Minister Abiy Ahmed (PhD) authorized a policy that envisages opening up Ethiopia’s financial sector to foreign competition. Sewagegn believes the banking sector should remain closed at least for the next few years. The Reporter’s Ashenafi Endale sat down with the public finance guru. The excerpts, does not necessarily reflect PEHA’s position.

The Reporter: What is the progress in reforming public financial institutions, which commenced after Abiy came to power?

Sewagegn Chane: The biggest reform we undertook is in the DBE. In 2018/19, the House of Peoples’ Representatives (HPR) decided DBE cannot continue as a financial institution and debated on how to dismantle it. That year, the bank reported 765 million birr loss so the HPR decided that the bank is not supporting itself, let alone the economy.

Myself, Haileyesus Bekele, the president at the time, and Yohannes Ayalew (PhD) DBE board president at the time, were called by the HPR to explain the issue. At that time, Public Finance Institutions Agency was a separate entity outside PEHA. The agency was led by Sintayehu Hailemichael (PhD) and I was the deputy director for operations. When some 36 SOEs were put under PEHA in 2018/19, the agency was included under PEHA, as a directorate.

The Budget and Finance Standing Committee at the Parliament insisted the DBE must be dismantled, because it was reporting a loss consecutively. The three of us were called to give our final comments on the committee’s decision. The committee was told that the fundamental problem of the bank was the lack of institutional independence.

Everybody was intervening in the bank, and it was unable to operate as a bank. The PM, other ministers, sectorial institutions, and even individuals have been meddling in DBE’s operation. Secondly, the bank gives loans but does not collect. Those who took DBE loans view it as the government’s budget, not as a client. Most of them had the “developmental investors” plate.

They take a loan and divert it to other businesses. Commercial farming in Gambella and Benishangul are good examples. I was in Gambllea for a year and half, to study why DBE’s loans failed there. There are so many rain-fed projects there. Particularly, six of those that took loans completely diverted the money to other businesses, instead of the commercial farming.

I stood before the standing committee, and pledged to give the DBE additional time. I told them if institutional freedom is restored, relationships with clients will be straightforward, and the bank’s loan collection capacity rebuilt, bringing DBE on track. So I asked the standing committee to give us just one year, and if we fail to rescue the bank in that year, then the committee can dismantle it.

Yohannes on his behalf explained how the IMF and the World Bank are happy to see the DBE dismantled because they do not want development banks in developing economies. He also elaborated how important a development bank is for Ethiopia. After a brief tea brake discussions, the standing committee announced it granted the one year time.

Immediately, we embarked on the reform agenda, introducing seven reform pillars. One of the biggest reform pillars was reducing DBE’s Non Performing Loans, which was over 40 percent at the time. If the bank cannot collect the loans, it cannot disburse loans the next time.

DBE’s NPL at the time was weighed in rain-fed agriculture and textile. So, we stopped any further loans for rain-fed agriculture. In textile, many foreign investors took loans in billions but did not pay, so we decided to take over all the projects that are not paying back their loans, and transferred them to other investors.

We also took the contract management of non-performing projects. For instance, the DBE took over the management of Elsi Addis, Etur and other textile factories, for the time being. Except Etur, most of these projects have been transferred to new investors, without reaching the foreclosure stage.

The major project left on our hands to date is Ayka Addis.

The other serious measurements we took were barring any officials from intervening in any loan appraisals and disbursement processes. Before the reform, orders for some loan approvals were given from the Office of the PM. Officials from the Industry, trade, agriculture, and many other ministries used to give such informal orders to the bank. Now, even the DBE board cannot involve in loan disbursement cases, except on strategic issues.

We managed to reduce DBE’s NPL to 30 percent this year, including Tigray loans. It is actually 17 percent, if loans in Tigray are excluded, which are affected by the war in northern Ethiopia. Profit comes from loan interest. If the loan is not collected, there can be no profit.

We managed to generate 1.2 million in 2019/20; just a year after the reform was launched. This year, the bank generated 3.9 billion birr in profit. If we did not put aside 4.1 billion birr provision for the Tigray loans, DBE’s profit this year could have been 7.8 billion birr. The DBE is rescued now and everybody is acting as a client now.

DBE’s source of finance is the guarantees from the Ministry of Finance and the National Bank of Ethiopia (NBE). The capital has increased from five million to one billion. The macroeconomic committee approved a study to allow new DBE bond, effective since January. This is apart from the GERD bond, which is the DBEs source of finance.

Before the reform, all the financial indicators of the bank were negative, and unhealthy. We completely reversed all of that, except for the NPL. Before the reform, there were only expenses and disbursement, but now there is income.

Out of the 31 strategic measurements we stipulated under the seven reform pillars, 21 are aggressively implemented and ten are in the process. Only one measurement has not started, which is the digital technology and modernization initiative.

The PEHA and DBE’s board has contributed for the success of DBEs management. One of the positive factors is the steel-serious discipline of Tegegnework Getu (PhD), the board chair of DBE. As a board chair, he is opaque to any external influence or favor. He never took stipends and incentives allocated for board chairs annually. Even he uses his own car for DBE activities.

Yohannes was the chief economist at the NBE for a long time. How did you believe in him, that he could rescue the bank?

Under past presidents, the bank had many deviations and exceptions. Instead of going through loan approval and disbursement procedures, loan seekers directly contact the president and get the loans, informally.

For instance, after we banned DBE loans for rain-fed agriculture in 2018/19, the bank gave 120 million for rain-fed agriculture project. The president at the time said he was forced because certain officials at the Ministry of Agriculture managed to give the order via the Office of the PM.

Surprisingly, the board chair does not know about the loan. The bank was bleeding. We had to be brutal to stop the bleeding. Most of the bad loans were given during Isayas Bahre’s time. Both Haileyesus and Getahun Nana were unable to save the bank. Our biggest worry was that Yohannes might decline the role to lead the DBE.

Over 200 large scale agricultural projects, and a number of foreign textile investors took loans from the bank and failed to pay. Are you pursuing them legally?

We are trying to acquire the lands currently. Our biggest problem now is with the regional governments of Benishangul and Gambella. The land is the key asset the investors provide as collateral to take the loan from the bank.

After the investors fled without paying the loans they took, the DBE has to acquire the lands, since it is the collateral. Once we finalize acquiring the lands, we will transfer it to other investors. Then we will recover the previous loans.

I heard the Benishangul and Gambella regional governments are demanding it pays taxes on the lands?

We reached agreements on some of the lands in Benishangul. There are ongoing debates on the amount. The bank agreed to pay the tax, if it agreed on the amount. The regional governments usually give one plot for multiple investors, so one certificate is given to multiple investors. The regional agriculture bureau has been reporting to us that the lands were being cultivated by the investors, which was false.

In general, rain-fed agriculture and textile investments have bled DBE.

For instance, Ayka Addis’s investor used informal channels to get the loans, instead of going directly through the bank. It either goes through the PMO or other officials. Solving all this was not simple.

Most of DBE’s clients were unruly. They had the right to take the loan, and the right not to pay. So we disciplined the clients first, and reversed the bank’s practice of negligence. All this was done in three years.

How much is the land leased for the rain-fed projects?

The rate depends on the regions. Basically, tax, lease and anything related to the land is handled by the investors. But since the investors went bankrupt, and the DBE took the lands, now the bank has to pay them. This is the reason why the regional states are asking DBE for the taxes, because it is under the bank now.

The investors who took the land in regional states for commercial farming, left, and the tax holiday period is over. So regional states are now claiming the taxes and the DBE agreed to pay. This is the game.

Did the Gambella commercial farms failed by design?

The loan was supported by policy. The policy of initiating commercial farming and modernizing the agriculture was not wrong. So the DBE prepared policy and procedures.

The major factor for the failure at that point, was the decision to give loans for rain-fed agriculture. This was a mistake because the investors knew the loopholes and abused the loans and failed to return it.

The DBE is on the right track now but business continuity is more critical.

What are DBE’s sources of funds, after the NBE’s 27 percent T-bill is replenished?

The NBE introduced another bond this year, in which banks channel one percent of their loan portfolio to the DBE. In the past six months, a bit more than 10 billion birr has been channeled to the bank from this new scheme. Once we start from insurances, these two schemes will become our biggest source of funds.

The GERD bond and loans from international banks also generate finance. It also accesses external funds like SME loans, through the MoF. DBE’s T-bill is almost zero currently.

How much is the loan interest the DBE is paying currently, when will the rest mature?

The DBE pays interests by adding two percent on the saving interest, which means nine percent. On the other hand, DBE’s interest rate is between 11 percent and 12 percent, the least being for import substituting projects. The margin covers its administrative cost. So the bank is able to pay all its interests duly.

DBE requested to put Tigray NPL’s off its balance sheet. But NBE officials told The Reporter that it is not going to take it off its balance sheet.

If Tigray’s NPL is put-off DBE’s balance sheet, DBE’s NPL could be 12.5 percent. But including the Tigray NPL, which is 10 billion birr, the NPL stands at 30.4 percent. What we are saying is this 10 billion birr in NPL happened by factors out of DBE’s control. We are not asking the NBE to cancel the Tigray loan.

We undertook a detailed study on how the NPLs could be taken off the balance sheet, and presented to the NBE. We do not know why NBE is silent on the issue. The CBE also requested the NBE to take off two billion birr off CBE’s balance sheet. This was also studied and presented to the NBE.

The NBE first said the request should be processed by the Bankers Association but the issue is still in the process. It is illogical to keep inactive numbers on banks’ balance sheet. When unrest occurred in Oromia over the past few years, the NBE allowed loans of affected investors in the region to stay off banks’ balance sheet. The same can be done for Tigray. It is not a big deal. It is NBE’s decision but I do not know why it is reluctant when it comes to Tigray NPLs. Tigray NPL does not represent DBE’s actual performance, which is outstanding.

DBE’s outstanding loan is 63.4 billion birr. Total NPLs stood at 19 billion, of which 10.1 billion birr is created in Tigray since the war. The president of DBE requested to exclude the Tigray NPL but PEHA does not agree, unless the NBE approves it.

Another investor is negotiating to buy Ayka Addis. Will this be the last negotiation?

A number of potential buyers have been trying to buy Ayka Addis in the past but failed. Especially a Chinese investor was very eager to acquire Ayka Addis. Any potential buyer is expected to contribute 50 percent of Ayka Addis’s portfolio. For instance, the initial investment loan was USD 1.7 billion so the buyer is expected to contribute half of it. But the Chinese lacked capital so it requested to contribute only 10 percent of it, which means around USD 200 million, so we refused because we cannot breach the 50 percent law.

If Ayka Addis is sold, DBE’s NPL will drop to around 15 percent, from the current 30.4 percent. Ayka Addis is holding a huge loan. The principal loan is 1.7 billion, a decade ago. Including the interest, probably it is around USD three billion by now. The value of the machines, factory building, raw materials when the DBE received Ayka Addis, is valued at USD 1.79 billion.

By the way, we are still paying the salary of 4,500 employees of Ayka Addis, though it has not operated for years now. It is between 13 million birr and 14 million birr every month. We cannot abandon the employees, after the Turkish investor left. We are carrying all this cost.

There were also other alternatives for Ayka Addis, other than selling it.

There were three major options tabled. The first is selling to a capable investor or buyer. The second is operating Ayka Addis under a management contract, just like Elsi Addis and the third was repurposing Ayka Addis into an Industrial Park. Some three potential investors have been negotiating. The Chinese came last.

Currently, another negotiation is underway. We hope this will be the last one. It is a consortium of local and foreign investors. We will disclose it when it materializes. Ayka Addis’s operation ranges from cultivating cotton to sewing the clothes. It pins the cotton, dyes it, and makes the clothes. It is an end-to-end project. So the potential buyer is expected to specialize in all these value chains.

Will the new buyer pay Ayka Addis’s accumulated tax?

Under Ethiopia’s law, a company does not pay taxes if it declares bankruptcy. After the DBE took over Ayka Addis, the tax authorities are saying Ayka Addis must pay tax, since it did not undergo liquidation. Ayka Addis was not operating for the past eleven years. So, the tax authority is asking for back-taxes for all these years, stating the project did not declare liquidation. So we are arguing with the tax authority.

But the DBE declared foreclosure?

When the Turkish investors left and the DBE started managing Ayka Addis, the tax authority started asking for tax.

Amazingly, Bmet cables, one of the Turkish investments abandoned after taking huge loan from the bank is a good example of how much Turkish investor’s exploited us. Under the Turkish investor, Bmet cables utilized 40 percent of operational capacity but they were not paying their loan.

Now, the local buyer, Tadesse Admasu of Red Star Trading, is operating at 12 percent of its capacity due to different reasons. The buyer acquired Bmet paying 890 million birr. Now, it has paid all the loans owed to Bmet.

How much has Ethiopia lost because Turkish investors left the country without paying DBE loans?

Before, their equity contribution was 30 percent. This means the DBE contributes 70 percent of the investment. Under the previous ratio, a Foreign Direct Investment comes with USD 30 million, and takes 70 million. The foreign investors left without paying the 70 percent loan they took from the DBE. But now, we adjusted the equity contribution to fifty percent, for foreign investors. Local investors pay 20 percent.

FDI is needed to bring technology, capital, forex, and create jobs. It did not meet any of these targets.

One of the other loopholes FDIs has been exploiting is that they highly under invoice export price. They usually have subsidiaries or a mother company operating abroad. So they export the clothes to them, with fake price documents. These investors also import raw materials only from those mother companies or subsidiaries abroad. The FDIs operating in Ethiopia do not want to use local inputs. They export t-shirts with USD 60 cents from Ethiopia. But the buyer abroad, which is affiliated to the FDI, resells it at a much higher price. So the FDIs generate meager forex for Ethiopia. Their bank statements also indicate loss, always. Especially the expats brought by FDI are highly abusive. Bmet’s former CEO has been paid 500,000 birr in salary monthly. This is excluding housing, vehicle and other accommodations. Now we decided to reduce expats inflow.

That is why, just when we started being strict on Ayka Addis that the Turkish investor’s fled Ethiopia immediately, without handing over the project’s properly. I think they left for Burkina Faso.

Are there new public financial institutions planned to be established, particularly to finance long term development projects?

Four years ago when the bank was in deep trouble, we conducted a study to determine its fate. One of our alternative recommendations in the study was to breakdown DBE into three different policy banks; into an industry bank, agricultural bank and an SME bank. Finally, a decision to reorganize and reform DBE as it is was made. In the meantime, we conducted a study to renovate the bank; the ATA was also making moves to initiate the establishment of an agricultural bank.

The initiative to establish a stock market was also conducted by us. We have been trying to convince the government to establish a stock market for the past eight years. It is only realized under Abiy.

Now, the importance of an independent agricultural bank and investment banks is imperative for Ethiopia. In line with the agricultural bank, agricultural insurance and micro-insurance firms are necessitated equally. These firms protect the loans provided by the agricultural bank to farmers.

We conducted the “Proposal of restructuring public banks” in 2014. The proposal included the recommendation to determine the fate of the former Construction and Business bank (CBB). We did not just demolish CBB without a proper study.

The same studies have later been modified for the DBE. The modified study also recommended the vitality of Agricultural Development Bank, and mortgage bank (construction bank). The plan is for the CBE to stop mortgage financing, and transfer the role to the new Construction Bank (CB). In fact, the proposed CB partly takes on the role of the now defunct CBB.

Currently, we have established two working groups at i-Capital Institute, studying on investment bank and the agricultural development bank each. PEHA has the mandate to give birth to new public enterprises, apart from managing the existing ones. It can also decide on mergers, and dismantling of SOEs.

As long as Ethiopia is progressing from an agrarian economy to manufacturing, a stock market is very essential. If we need more robust manufacturing companies, we must build a robust stock market, where the companies are listed, float shares, and mobilize capital. A manufacturing industry cannot grow without a stock market.

The banking sector fears to give loans to manufacturing industries because the banks fear losing their saving capital. Once the stock market is active, the interest in banks will drop. But the stock market will grow faster, hand in hand with manufacturing.

I hope the establishment of an agricultural bank is realized soon. Ethiopia has an agrarian economy. But the economy is currently distorted, as the service sector constitutes the largest portion of the GDP. In a bid to transform Ethiopia’s economy from an agricultural to a manufacturing industry, agricultural development bank cannot be an alternative. Agriculture is not developing due to lack of finance, fundamentally.

The agricultural bank also needs an insurance firm, to cover the risks of the loans. The bank finances tractors for the farmer, and then the insurance firm insures the machines as well as the harvest. It is highly imperative that agricultural development bank and investment banks are essential for this country.

A secondary market cannot operate without an investment bank. Since we are nearing the establishment of a stock market, we also need to establish an investment bank.

For instance, banks are planned to be listed on the stock market. The investment banks will study the banks, as well as other IPOs, inside out. So, the investment banks determine the exact value of shares, and securities. This means IPOs, including commercial banks, cannot determine the price of their shares by themselves, unlike now.

The underwriter preserves the interest of every stakeholder, investor, IPOs, and others. It sets standard but the investment bank cannot be listed on the stock market itself.

Once the two working groups wrap up their studies, the documents will be reviewed by stakeholders. Then, we will present the final documents to the government to decide on whether to drop or implement the study’s recommendations.

A few years back, we travelled to Nigeria to visit their central bank and development bank and took three months of training. I was amazed by their Islamic insurance. We extracted lessons and brought it to Ethiopia.

The government is saying the banking industry will be opened for foreign competition very soon. What is your take on this?

Before, we have been asking the government to open the banking industry. But recently, we have changed our perspective. We prefer the government to delay the opening up for now. I precisely know the exact capacity of each local banking institution.

Before, our assumption was that local banks will merge, at the face of an open up. So we have been advocating for it to open, at each meeting and financial summits.

Basically, banking and insurance businesses in Ethiopia is a captive business. The banks are formed either under religious, ethnic, political sentiments or other bands. So, Ethiopian banks and insurance companies lack the business mentality. If they had a business mentality, they will work with anyone who has a viable business idea. So I believe the government must delay the sectors opening up.

The NBE recently said mandatory merger and acquisitions will be forced on local banks, when the sector is opened up.

That is inevitable once the industry is opened up. Of course mergers can happen even before the opening up. For instance, the NBE raised the paid up capital to five billion. Those who failed to meet will have no option but merge. The NBE can also raise the reserve let’s say to 25 percent, from the 10 percent currently. Many banks could have merged. This way, competitive banks could be created.

Western banks, especially Europeans, strongly pushed Malaysia, Korea, South Korea, and Thailand to open up their financial sector. Once these Asian countries opened their financial industries, the western banks withdrew after joining the sector. The Asian economies were hit by financial crisis as a result.

But eventually the Asian tigers avenged the western banks. The 2007 financial crisis hit western banks, because the Asian tigers suddenly raised their banking capital. They intentionally gave more loans to American banks. Then the American and European banks disbursed those loans to mortgage, and small businesses. The western banks failed to pay their loans to the Asian tigers, taking revenge twenty years after the western banks played foul.

We do not need such turf wars.

The only reason Ethiopia’s economy is doing well after the war in the past two years, is because our financial industry is closed off. Our economy survived because the banking sector is not open.

If banking was opened to foreign competition, the economy could collapse, under this war. And had it been opened before the war, the economy would have collapsed by now. Foreign banks simply close and leave, when there is a war.

Many people say the banking industry should be opened. That is wrong. They do not know the exact capacity of local banks in surviving foreign competition. I have no confidence even in the CBE.

The CBE has a huge NPL owed by the government. The government owes over half a trillion birr. Unless it is fully paid, CBE will face many challenges.

So, I insist the banking industry should not be opened at least in the next three to four years. Local banks need up to four years to prepare. Mandatory merger is simple.

When the Home Grown Economic Reform was launched in 2019, the government promised to reduce the states hand in the economy, and reduce the pressure on CBE and domestic credit. Is there any progress?

The CBE is not giving loans to the government now. State pressure is reduced. The CBE has studied new organizational structure, and is implementing new business strategies. Before, especially during the previous regime, state banks give loans as if it is a budget. They do not collect the loan.

Do you follow up on CBE’s branches abroad?

We evaluate them during reporting. The bank has branches in Juba and Djibouti. The Juba branch is performing very well but the Khartoum branch was suspended while in the pipeline.

Did the CBE move from PEHA’s supervision, after it is placed under the EIH?

Currently, the CBE is in transition process, from PEHA to the EIH.

I heard SOEs will be categorized under three supervisory institutions according to their performance. These are the EIH, PEHA, and the LAMC. Is that true?

What I know is that there are SOEs going to the EIH, and the rest will remain under PEHA. The LAMC by itself is an SOE and is under PEHA’s supervisory. LAMC is under my supervision. The CBE, DBE, EIH, LAMC and national lottery, are under my directorate.

The EIH has recently on-boarded 27 SOEs, out of the 36 SOEs under PEHA. Does that mean they are completely out of PEHA?

The investment part of SOEs goes to the EIH, while the enterprise management aspect remains under PEHA. But so far, there is no definite decision on whether the selected SOEs completely move to the EIH, or partially. This is decided by the macroeconomic team of the PM.

Will all SOEs be listed on the stock market?

The plan was for the SOEs to list a certain percent of their value on the stock market. If SOEs like ET, ethio telecom and others trade 10 percent of their portion on the stock market, it builds the public’s confidence. But SOEs must meet stringent financial reporting systems.

I also hear that five percent of ethio telecom’s share will be sold on the stock market. SOEs that meet the right financial reporting system will be able to float shares on the stock market.

People are facing difficulties acquiring houses because real estate companies collect money from house seekers and disappear. The stock market will also solve this. Everything will take shape under the secondary market.

The government is allowing the establishment of new banks in the last two years. But lately it confirmed the opening up of the banking sector for foreigners. Isn’t this sending mixed signal?

Mergers can be done at any time. Then local banks can consolidate and ready for competition. PEHA is exemplary in merging CBB with the CBE six years ago. Private Banks must follow suit.

Local banks are in a comfort zone, registering lump profit, not because they are providing a class service. They are profiting because they are protected. Under state protection, they do not have to improve service. They survive at the expense of the client. Millions are saving in bank but only a few thousand get loans. All of this will change, once foreign banks come.

Yesuf Ibrahim is a founding member of the National Movement of Amhara (NaMA). He worked as the head of the strategic sector in the earlier stages of NaMA’s establishment. After its establishment, he worked as the head of the strategic sector for two years. After serving the organization as a vice chairman, he is currently working as the head of the party’s legal and ethical regulations and as a manager of the government’s property management authority. He received his LLM degree in law from Addis Ababa University and has worked as a law lecturer at a university. The Reporter’s Selamawit Mengesha sat down with Yesuf on issues concerning the party, region and the country at large.

The Reporter: How would you describe your participation from the time you first started working with the government as an opposition party, and the process until you became the manager of the government’s property management authority?

Yusuf Ibrahim: I have been heavily involved since the establishment of NaMA until its present stage. NaMA’s ideology is not an organization that paints itself as a liberator. It is synchronized with the people and the country.

Because the Amhara people have special problems and are being attacked by the constitution and narrative, protecting the people is one of the political targets. However, we have come to the historical notion that the attack on Amhara people is not something that has a special historical origin but an effort to destroy the country by making the community a victim.

The movement is one that could be traced back to colonialism. Weakening the beliefs, values, and social status of this community can be a way to destroy the country. Its origin is a colonial idea. Because of this ideology, a number of internal anarchist institutions were created.

By establishing such organizations, a political party based on identity has been established over time to save the Amhara people, who have suffered a lot. When the government moves into the phase of “change”, it is important to try because “change” has not yet been seen. When we look at the power alignment in Ethiopia, it is not a place where NaMA makes friends easily. In the course of time, after studying the intricate web of power, we analyzed the power that could become the friend of the enemy.

Compared to that, even if we can’t get along with everyone, we can work with anyone. As for figuring out to what extent and with whom, there are those who are known for backstabbing, so that’s a start. It was a timely analysis that was not particularly favorable to the Amhara. Therefore, it was established to fight anti-Amhara organizations.

Currently, even though it is an institution with many problems, we have an organizational position supported by a strategic document that we must work on together with the government. In general, it is necessary to work together with the government. When elections were planned to be held during COVID, there was pressure from many political organizations. Working together with the government was our own initiative.

We asked ourselves how we could safeguard the long-term interests of our country and people. We are a political organization and we take a position based on who we believe will betray us. We do this within the bounds of the law. It is necessary to work together with the government. They did not try to make it as big as NaMA, but there was pressure from other parties to make NaMA a part of the government, but the government did not want that. Regarding this, we explained to them that Prosperity is a traditional government.

This showed that the government was not proactive and did not identify its partners. As a party, it contributes greatly to the work of saving the country. We believe that we have especially united the people.

During this process, there was a conflict in the nature of misunderstandings between various issues, and because the problems of the parties and the government were not resolved quickly, it started to turn into a war.

With all of that happening, it was important to work with the government during that period. But keep in mind that working together with the government does not mean that we are the government but, in some cases, groundwork needs to be done. We had the idea that politics based on cooperation, not competition, was best suited for the landscape of the country.

Since the NaMA did not have a clear idea about working with the government (that is, we joined the government while the country was at war), we discussed it twice with the government when the issue was raised.

The matter has been tabled at the executive level. But it was fundamentally ignored by NaMA.

When the authority was given, I was called on the phone. I arrived in Gondar at 5 o’clock in the morning and was told that the appointment would be at 7:30. They have their own reasons for doing so. Since the appointment process was during the war, it was completed in secret until the end so as not to overwhelm the government.

On the side of the Prosperity Party, there was a bit of a misunderstanding because I received a call from the Addis Ababa city administration and then, on the same day, I received a call saying that they were looking for you for an appointment in the Amhara region; I made my own decision and chose Addis Ababa.

There is no problem with opposition parties working with the government. In Ethiopia, the process of democracy should gradually develop over time. Democracy needs to be improved by learning to work together.

In fact, it would be great if NaMA worked with the government. It would have been helpful if the lower level of government was more involved in areas such as kebeles and districts.

I made a proposal that if the government does not give us authority on the lower structure, we should give up big authority positions. But the party was not unified and could not consider the proposal.

NaMA is a party established to represent the people of Amhara. The Amhara people want you to be the voice of your party in any way. Working with the government means leading a multi-ethnic population, and haven’t you faced challenges in the middle?

This is also an issue of the reform process that the party intends to follow. The reform will work to clarify which level and which concept we are working on. There might be some changes in concept with the change of leadership.

It is about continuing to explore our strengths and solving our problems. The government does not exist only through the executive branch. The government has three branches and includes Parliament in the constitution.

We have representatives in the federal parliament in the state. The relationship between the party and its members at the top should be defined. As a party leader, when we work with the government, it must be based on the party’s principles. If I am going to move in that way, we should either leave the party or leave the leadership of the government.

There should be a strict procedure. In the current state of affairs, the federal structure that our party and the country are led by all is based on ethnic lines.

The constitution itself rarely even uses the word “citizen.” We want this to be liberal over time. We follow the philosophy that individual citizens should be the foundation of democracy. We want our organization to be a center for correcting the many mistakes made by extremists.

It should not be restricted only to Amhara. It should also be connected with other communities. Once this is fixed, the Ethiopian status will be announced. We believe that when we work as a party and as Amhara, we are operating as Ethiopia.

The Amhara community is the Ethiopian community. It has been pushed by many things. We are not saying it should be paid by revenge. We only remember the past to be able to fix the future. We do not believe that our people would be harmed if equality and freedom prevailed in Ethiopia. This is a modern principle. I do not believe that I am an advocate for the politics of a community at any time. As a company, we believe that we work for all Ethiopians.

It is one of the pillars of our society that it should not be affected by special circumstances. We want to be seen from the Ethiopian perspective. We do not want to separate Amhara. We want it to be governed by justice along with its fellow citizens. Amhara is affected in the same way that the rest of society is, but the incorrect narrative that has developed over time must be corrected. The question of who is the representative of political philosophy is bound to arise. Since NaMA is of Amhara origin, it is organized accordingly.

It is necessary to adapt to solve this problem for the time being. I think NaMA can adapt to all the parties. While working here, I am color-blind. I have neither the capacity nor the desire to take sides by saying who belongs to which nation. I also do not share such political views. We think that the perceptions created on us by the TPLF is in conflict with the people of Tigray. This is because the TPLF has been equating itself with the people of Tigray. But we still see their segregation. We believe that the TPLF is a criminal group. During the century, narcissistic institutions were created to hold back society and live for profit.

A while ago, it was tiring to find the issues that separate the people of Tigray and the people of Amhara. It was bound by various social, geographic, religious, and economic ties. We have to solve the existing problems with different justifiable methods. As it is known in Ethiopia, we do not accept ethnic politics. Therefore, I am running the people’s question in alignment with the government’s work.

Is there a division between the leadership of the government and other members of the party? What kind of situation is NaMA in right now?

Currently, changes are made every time political dynamism changes. The struggle is that when more energy is needed, society needs change. We have gone through many problems in our struggle for organization and society.

As the country’s problems continue to expand, members of the family are always at war. Therefore, leaders and members do not meet regularly. NaMA’s children are dying on the war fronts.

Don’t ask me how a peaceful party can fight with weapons. Since the declaration of seclusion, there has been a call to participate in the war. War has been waged on the Amhara people directly.

There are NaMA members in Raya, Wolkait, and in all the districts where there were members that were killed while in command of the brigade. There are several fighters in the structure. Therefore, the central one, the one at the top of each leadership, and the one at the bottom are not formally connected; we are connected informally.

During the second round of fighting, the party did not have a central committee or executive meeting for four months. Many gaps were created during that time, and it is not possible to update regularly. Politics brings the change of opinion closer to you when you meet and update regularly.

However, the more it is separated, the more the case is defined. So far, we’ve been supporting the idea that had majority support in debates. I have never seen a decision made without the approval of NaMA members.

Because we do not meet regularly, we have lost the opportunity to make decisions through debate and consensus. There were talks of NaMA coming into government appointments without the party’s consent, but in the process, although there were violations of discipline, the matter was adopted at the central committee level and this concept of working together will hopefully continue in the future.

The forces that wanted change were created in NaMA. First, there was a question that you should not lead the party part-time while in government, as the party requires a full-time dedication.

We will restructure. The party is a movement, and a movement needs to open up. It is not just a random party in power. Until the struggle reaches a certain level, the movement will open its doors and attract new talents, and it is not feasible to say that I will remain on the throne of the establishment once it is over. It is not correct, and it is not the principle of our struggle either.

People feel worried if there is no open discussion. There will be people who want to make the party a powerhouse. But in the end, the contradictions could not be easily reconciled.

On the other hand, it has shown differences in the way we see politics. But it is only in the top management that the difference should be noted. A certain difference was created between the Central Committee and the Executive Committee with only 10 to 20 people. There is no difference in the bottom structure of the broad members.

Due to Bahir Dar’s protest, I resigned on my own accord and changed from the position of vice chairman to the law department. What the party wants is not the change of one person or two. They say the movement wants to change from top to bottom. And this is their right.

An inquiring generation should be encouraged. There were misunderstandings with the top management. It deviated from NaMA and the general concept of democracy, which did not accept the reform and were going through a process that did not encourage internal democracy.

It is not a question of whether we like or hate individuals; it is a matter of history. It is the struggle of our people. It doesn’t define division for me. It is fundamentally settled by law. The structure is not split.

The main foundation is structure. I don’t think that the creation of division in the leadership of two or three people will divide the structure. We intend to hold a general assembly by October, which will hopefully restore NaMA.

Will the party become more organized by resolving the controversy within NaMA?

NaMA will come prepared. This happens at any party because it is a massive collection. The party needs time. The fight will then go into negotiations. The negotiation will be based on the concept of transitional justice from our point of view. There are a lot of processes that go through both material and human life. All of that should be resolved.

Politically, where are we going? Where are we going as a country and what is our collective ambition? NaMA must be prepared for this soon.

There are those who have applied what we brought as an idea to Ethiopian politics, which shows NaMa’s power to exert great pressure. After many pushes, debating and explaining to the people of Ethiopia, if politics is about to bear fruit, it will not happen unless the party exists.

There may be individuals with egos within the party leaders. They should be dealt with on the inside first. We were hoping that it wouldn’t show on the outside.

Most of the leadership and central committee members have petitioned the General Assembly’s request. A petition has been filed for reform. Yet undisciplined work is being done against the will of the people and the structure of the organization. That should be corrected. They are all being looked at from every angle.

Let us come to the current national issues. We have been at war for the past two years. Various efforts have been made to resolve the war peacefully, but another war broke out. Can you explain to us the whole political process and what Ethiopia’s politics should be in the future?

NaMA wants Ethiopian politics to be based on citizenship. Ethnic politics means a gathering of extremists where everyone who is offended hides. The TPLF and ONG should be held accountable for the Ethiopian-ism they attacked. It is a country known for caring and living together. Politicians must engage in a certain strategy. The structure should not be manipulated as intended.

NaMA will always cooperate with forces that can weaken the TPLF. As the TPLF has been in politics for a long time and has led the country, it must correct the mistakes of the past by deciding which is the most viable path for the future. They could not think of a way that would benefit the people of Tigray, whom they think they represent.

I do not think that the separation of the Amhara and Tigray peoples, a society that has lived together for many centuries and is bound by religion and culture, will achieve the goal. The people of Tigray must show that they are not enemies to the Amhara community.

During the war process, NaMA has been doing many other things by standing with the defense force, delivering food and coordinating with the diaspora. When the Amhara region was in battle, it gave studies on why they should fight for a purpose. It was heavily involved throughout the war.

How and under what conditions do you think the negotiations should be conducted?

Conflict always ends in negotiation. Even if the TPLF itself thinks that we should be divided, it knows that they will lack both resources and manpower. The TPLF should not go any further on the path of brutality and revenge. Ethiopia should follow the liberal approach and solve its problems. The war against the TPLF was not for revenge but was brought on by themselves.

In my view, I want transitional justice to happen. It is not because I believe transitional justice would calm everything down, but because it is an option. Justice is being served now, not for revenge but to bring harmony and move forward.

Negotiations should be conducted for the sake of peace and justice, with the decision that it will not happen again in the future and that what happened in the past was not right.

But in Ethiopia, it is seen that negotiations are used as a plot resource. It has been observed that only if the power to be negotiated is dangerous and one party wants to survive, is the proposal submitted for negotiation.

That is why I am afraid that the proposal presented by the TPLF might be some sort of treason. The deal requires a genuine broker. Since the war will inevitably end in negotiations, it all depends on who comes up with the better negotiating package. There is a risk that the negotiator who believes in violence may resort to violence at the negotiating table.

The TPLF should not exist as a political force. It is difficult to say that the TPLF is deceiving all these people with mobilization. I think most of them believe it. While the party was scattered, the individuals in the party lined up, reorganized, and attacked the defense force.

Such regeneration should not be ignored. The security guarantees should be adjusted and then they can enter into negotiations. A ceasefire is one way it can be done. But beyond that, there must be other stakeholders. The negotiations that should have been entered into after the collapse of the Derg left us in the situation we are in now. I believe that the Amhara region should have a negotiator on their behalf.

In the end, it should be known what level our politics should be at. Any person should be able to go and live in the area they want without being displaced from place to place because of ethnicity.

The TPLF has the capacity to rebel, not organize and re-enter. War itself should not be based on ethnicity. Who will benefit from this war?

There is no need to pretend like there is a war between two different countries. Both must work together. The negotiations must be conducted in moderation. Negotiations range from a ceasefire to a new proposal.

Although the African Union has little experience, it must mediate. They should all enter into the negotiation with good intentions. The very idea of secession is unethical.

To allow foreign banks, the banking proclamation, banking service code and the investment regulations must be revised. Especially, the code must allow banking for foreigners. The existing commercial code allows banking and insurance only for Ethiopians. Non Ethiopians cannot be investors, or operators.

Do you think the financial sector will be opened before five years?

I think so but I prefer it being delayed. All banks are giving loans to the service sector. Manufacturing and agriculture cannot grow unless we have banks that can give loans for long term projects. There are no consumer loans too.

Insurance companies complained over NBE’s order to direct 15 percent of their profit to DBE bond.

The rate has been reduced lately and the insurance companies agreed.

We must draw lessons from countries that have bridged the gender gap successfully. In some institutions, they say there are no women qualified to be board members. That is wrong.

Circulation of privately-owned papers is small and usually limited to Addis Ababa. Readership numbers are low.

A number of newspapers are now available online.

Ethiopian Reporter Business Page

MEDIA AND COMMINICATIONS CENTER (Ethiopian Reporter)

Media and Communication Center (MCC) a private limited media company established in 1995. Headquartered in Addis Ababa, Ethiopia MCC is the publisher of “Reporter” a bi-weekly Amharic, “The Reporter” a weekly English newspaper, a monthly Amharic and English magazines in both print and electronic versions.

Staff

MCC employs 137 permanent and part-time staff and has a sister company called the Horn of Africa Press Institute, which does research on Media related issues.

Mission and Vision

The Reporter’s motto “Free Press, Free Speech, Free Spirit” expresses the ideal of freedom that, journalists and editors, hope to enjoy and promote professional journalism.

MCC believes that it has responsibility to readers, the public, the people in and outside Ethiopia who rely on Reporter for news.

Each week we bring to the public critical stories without fear or favor and guarantee that our editorial choices about what to print are based on the importance and relevance of the topic to our country along with journalistic qualities. We refrain from any political, economic, or other unethical motivations.

We dedicate ourselves to help our readers in their effort to become an informed citizenry by giving as much information as possible.

We serve as a platform for the public’s thoughts, opinions and ideas by soliciting, accepting, reviewing and publishing letters and comments.

We intend to make our newspaper a model for those in our profession, a guide for novices.

Circulations and Reach

MCC distributes the newspapers and magazines to all business companies, governmental offices and non-governmental offices in Addis Ababa and all regional cities through subscription as well as street vendors.

Readers can access our news on our websites www.ethiopianreporter.com and www.thereporterethiopia.com and Reporter Tender Website www.reportertenders.com can download our apps from iTunes store and Google play to use on their android and IOS devices.

ሪፖርተር ዜና Media and Communication Center (MCC) a private limited media company established in 1995. Headquartered in Addis Ababa, Ethiopia MCC is the publisher of “Reporter” a bi-weekly Amharic, “The Reporter” a weekly English newspaper, a monthly Amharic and English magazines in both print and electronic versions.

Mission and Vision

The Reporter’s motto “Free Press, Free Speech, Free Spirit” expresses the ideal of freedom that, journalists and editors, hope to enjoy and promote professional journalism.

MCC believes that it has responsibility to readers, the public, the people in and outside Ethiopia who rely on Reporter for news.

Each week we bring to the public critical stories without fear or favor and guarantee that our editorial choices about what to print are based on the importance and relevance of the topic to our country along with journalistic qualities. We refrain from any political, economic, or other unethical motivations.

We dedicate ourselves to help our readers in their effort to become an informed citizenry by giving as much information as possible.

We serve as a platform for the public’s thoughts, opinions and ideas by soliciting, accepting, reviewing and publishing letters and comments.

We intend to make our newspaper a model for those in our profession, a guide for novices.

Circulations and Reach

MCC distributes the newspapers and magazines to all business companies, governmental offices and non-governmental offices in Addis Ababa and all regional cities through subscription as well as street vendors.

Readers can access our news on our websites www.ethiopianreporter.com and www.thereporterethiopia.com

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Policy caps foreigners’ acquisition in local banks to 40 percent

Local banks have less than one year to prepare

With an additional five percent stake allowed each for foreign individuals and foreign non-bank investors, the maximum stake local bank can sell to foreigners is capped at 40 percent.

Nigeria has confirmed that Ethiopian Airlines has been chosen as the core investor and partner for the country’s new flag carrier. Nigeria Air has been in the works for a while now and has slowly been approaching a full launch, pending support from partners. Ethiopian is Africa’s largest carrier and has shown a willingness to invest in new startups recently.

Foreign banks are allowed to acquire up to a 30 percent stake in local banks, according to a policy document approved by the Council of Ministers last month and obtained by The Reporter.

With an additional five percent stake allowed each for foreign individuals and foreign non-bank investors, the maximum stake local bank can sell to foreigners is capped at 40 percent.

Licensing foreign banks and implementation of the policy is slated to kick off in one year’s time from the ratification of the Banking Business Proclamation, whose amendment is already underway.

The highly confidential policy document has been off limits. The policy also excludes insurance and microfinance from the open-up initiative. It allows foreign banks to open a subsidiary firm and open branches in Ethiopia, besides giving an option to buy shares in local banks.

An NBE official that spoke to The Reporter confidentially stated that the window period for local banks until the liberalization takes off might not necessarily be one year.

“The Amendment to the Banking Business Proclamation is finalized and ready to be sent to the Council of Ministers. Most certainly, the proclamation will be approved in the current 2022/23 Ethiopian fiscal year. The licensing of foreign banks will start after the amendment of the banking business proclamation is finalized,” the official said.

The official believes that once the proclamation is amended, regulations and directives will follow, which can take six months or a year.

“We cannot say definitely that a bank will be opened up one year after the proclamation is finalized. It depends on our pace of finalizing the proclamation and the regulations and directives required to implement it,” the official added.

Foreign banks are also authorized to open a commercial representative branch in Ethiopia, a permit that was already given to some multinational lenders like Standard Bank, Egypt’s Commercial International Bank (CIB) and KCB Group.

The opening-up policy document was not revised after the Council ratified it. Comments forwarded by the Council are also not included, according to The Reporter’s sources.

The NBE will decide on the majority of the details regarding the implementation of the opening-up policy with the details to be stated in the upcoming proclamation, regulations, and directives, according to the NBE official.

“The policy is more of a broad perspective. Foreign banks, individuals, and strategic investors are allowed, but the exact ratio will be determined. Changes to investment regulations are not always necessary. The banking proclamation is sufficient by itself,” added the official.

Local banks are already in hot water since the Council of Ministers disclosed the approval of the open-up policy last month. Presidents of local banks The Reporter talked to, who did not have access to the policy documents so far, argued most of the decisions stated in the policy document.

“Of the four modalities, subsidiary and branch will have no benefit for Ethiopia. They are the biggest lunacy of Ethiopian government decisions. They will neither bring foreign currency nor improve the efficiency of Ethiopia’s banking industry. The government is wrong to assume local banks lack corporate culture and skills. I am sure if academicians and banking practitioners see the policy document, they will not approve it,” said a private bank president with two decades of experience.

He says the government committed two major breaches. “First, the government did not identify what it was really seeking to do to open the banking industry. Is it foreign exchange revenue, access to finance, efficiency, technology, or others? Then the government should have done intensive studies to determine which venue is suitable for that objective,” the bank president said.

“Secondly, the government did not discuss it with local banks and other stakeholders. The NBE did not discuss anything with us. The policy document is still kept a secret even after the Council approved it. It must be posted on the council’s website as soon as possible,” the president added.

Another bank president appreciated the decision to cap foreign bankers’ acquisitions. “Capping maximum equity local banks can sell to foreigners to minority shareholding ratios is very good. It will protect local shareholders and maintain the rights of local bankers. The issue with this equity acquisition is that there is no system in place to assess the value of local bank shares.”

“Since there is no stock market in Ethiopia, valuation of local banks is done traditionally. None of the local banks are listed on any stock market. The existing share market valuation system is traditional. Currently, shares of each of the local banks do not reflect the exact values. So there must be a new valuation system,” said the bank president.

On the other hand, he contends that valuing local banks at a time of peak birr depreciation will be detrimental to Ethiopia but beneficial to foreign banks and investors.

“The valuation will be high in terms of birr attributable to the devaluation. But in terms of dollars, the value is not large. Therefore, foreign banks and investors can acquire the stakes at a cheaper price in dollars. The injection of foreign banks into local banks will escalate inflation in Ethiopia because foreign investors will buy the shares with forex. But that forex is injected into the economy in birr, which is high in number. So the immediate impact of the banking opening-up will be higher inflation. I do not understand why Ethiopia keeps devaluing Birr,” he added.

The bank president also appreciated the one-year window period for preparation but questioned why private local banks have to work with the NBE to devise their competition strategy.

However, all the bank presidents rejected the government’s decision to ratify the open-up policy document without consulting them.

“The NBE did not even discuss with us the Banking Business Proclamation amendment underway, let alone the new policy. Many laws were introduced without consultation with bankers and have proved harmful to us. I understand the political and diplomatic benefits of this policy, which is why the Council hurried to ratify it without consulting us,” added the banker with two decades of experience.

For him, the policy is made to appease western countries, which are pressuring the government.

“Banking opening up is not as simple as opening up telecom, aviation, or any other sector. Ghana and Kenya sold their banks and became poor, overtaken by India, Pakistan, the UK and other countries’ banks. Many other countries, including in Africa, opened their banks after intensively deliberating on it and preparing a detailed catalogue of the modalities,” said the banker. “Nigeria, Ghana, Kenya, South Africa, Morocco, and Egypt all opened their banking sectors after much deliberation. Not all of these countries were successful after opening their banks. Unless wisely managed, this opening up will also make Ethiopia poor,” he added.

Ethiopia has canceled its contract with a Chinese company exploring oil and gas in the country since 2013, the government announced on Wednesday.

Takele Uma, Ethiopia’s minister of mines and petroleum, said the deal with Chinese firm Poly-GCL was called off because of its “financial and organizational inability” to develop gas in the Ogaden Basin, a resource-rich area in eastern Ethiopia, according to state-affiliated news agency Walta.

The report said Poly-GCL was issued a letter of ultimatum in March that listed several conditions for the company to fulfill.

“In accordance with the successive notices the Ministry has issued in the past and in full compliance with the PPSAs and the laws of the land, the termination has now been fully effected,” Takele said on Twitter.

“As long as the financing that would enable to develop the oil and gas fields the Ministry is open for mutual and expeditious settlement,” he added.

Takele had previously hinted that Poly-CGL’s contract would be terminated, saying that Ethiopia was actively searching for international companies that could develop the Ogaden’s confirmed reserves of 7 trillion cubic feet of natural gas.

Nigeria has confirmed that Ethiopian Airlines has been chosen as the core investor and partner for the country’s new flag carrier. Nigeria Air has been in the works for a while now and has slowly been approaching a full launch, pending support from partners. Ethiopian is Africa’s largest carrier and has shown a willingness to invest in new startups recently.

Ready to take off?

According to ThisDay, Nigeria’s federal government has formally chosen Ethiopian Airlines (Ethiopian) as a partner for the long-awaited Nigeria Air. The deal includes a 49% equity share for the airline, joined by 5% from the government since the project is set to be private-public. Notably, Ethiopian is sticking to its policy of not investing cash into a new business.

Instead, the airline will leverage its technical prowess, an abundance of aircraft, and management skills to establish Nigeria’s first flag carrier in years. While yet to be formally confirmed, an initial pool of pilots is set to arrive in Addis Ababa for basic training for certification on the Boeing 737NG.

Nigeria has confirmed that Ethiopian Airlines has been chosen as the core investor and partner for the country’s new flag carrier. Nigeria Air has been in the works for a while now and has slowly been approaching a full launch, pending support from partners. Ethiopian is Africa’s largest carrier and has shown a willingness to invest in new startups recently.

Ready to take off?

According to ThisDay, Nigeria’s federal government has formally chosen Ethiopian Airlines (Ethiopian) as a partner for the long-awaited Nigeria Air. The deal includes a 49% equity share for the airline, joined by 5% from the government since the project is set to be private-public. Notably, Ethiopian is sticking to its policy of not investing cash into a new business.

Instead, the airline will leverage its technical prowess, an abundance of aircraft, and management skills to establish Nigeria’s first flag carrier in years. While yet to be formally confirmed, an initial pool of pilots is set to arrive in Addis Ababa for basic training for certification on the Boeing 737NG.

The next few months will tell us more in terms of the airline’s timeline for takeoff. With a fleet of Boeing 737s and Dash 8s, we can expect a domestic and regional focus in the initial months, a market that has no shortage of travelers in Nigeria. Keep an eye out for this up-and-coming carrier in the near future.

Mesenbet Shenkute Re-elected to Lead Addis Chamber for Second Term

The one and only mortgage bank, Goh Betoch Bank, concludes the financial year with bright books, meanwhile it in fact operated for few months.
The bank which officially opened its doors on October 25, 2021 disclosed that the financial year that ended on June 30, 2022 was primarily used to finalize the formation process and create operational capacities like recruiting personnel, providing trainings, emplace core banking and data center facilities and others.
In the first months, the mortgage bank was also fully working on a five year strategy that was conducted in collaboration with HST Consulting PLC, a prominent consultancy firm.

Mulugeta Asmare, founding President of Goh Betoch Bank, said, adding, “We have also provided services to customers and have been able to mobilize deposits, provide loans, as well as facilitating some other operations like forex.”

The bank that has four branches including the one in Dire Dawa began providing loans in the fourth quarter of the financial year and disbursed over 300 million birr in this short period, while the deposit mobilization was about 260 million birr.
62 percent of Goh’s deposit mobilization is tending to savings for mortgage, which is its specialization even though it provides other basic commercial banking services.

In the financial year under review, the bank was able to conclude under a positive balance sheet, which is not common in the sector, “Compared with the period where we commenced our real operations, such types of success is quite rare.”
“We have been working to manage our expense. Thus for the closed period, we have attained to cover our costs including organizational expenses that were incurred starting from the under-formational processes, which started in 2019,” the President said.

“Despite working for a few months under limited scale, our income has surpassed the expenses, reeling in profits of 6.3 million birr,” he explained.
As a mortgage firm, the bank may not have a priority to run extraordinary ways of opening branches and in the current financial year it has targeted to double its branch number to including major cities like Hawassa and Bahir Dar.
Currently, the bank that has 127 staffs has four branches in Addis Ababa and Dire Dawa.

The Reporter Ethiopia

Patrick Hicks is a born-and-bred Texan from Waco. Fasicka Hicks is from Addis Ababa, the capital of Ethiopia. They met in 1997 after she immigrated to Texas.

Both of them liked to cook, and Patrick’s barbecue became a favorite of Fasicka’s Ethiopian family. Seeing her family’s delight gave Fasicka an idea.

The idea soon blossomed into Smoke N Ash, but it remained traditional Texas BBQ until 2019 when Fasicka decided to add Ethiopian options to the menu — and they soon became popular items.

With customers enjoying the two tastes together, the couple decided just having the meal share the same plate wasn’t enough. They decided to combine the flavors in the same recipe.

“And I was tellin’ him, ‘Hey, you know what? We can make money sellin’ this food.’ So we bought a trailer and made some extra money on the weekends. Before we know it, we start forming lines because people look forward to our cooking every weekend,” Fasicka recalled.

To guarantee authenticity, Fasicka’s sister gathers Ethiopian spices in Addis Ababa and ships them to Texas—the result is perhaps the only Ethiopian-Texas barbecue on the planet.

The Texas-Ethiopian platter is the signature dish at Smoke N Ash. American barbecue staples like brisket to catfish to Texas toast, as well as Ethiopian dishes like chicken doro wat are on the menu.

The couple says the success behind their restaurant isn’t the food but what it means to them.

“When it comes to food for me, it’s just about togetherness. You work on it with love and care, and you make it to be the best thing on the plate, on the table,” Fasicka said.

The couple says the success behind their restaurant isn’t the food but what it means to them.

“And I was tellin’ him, ‘Hey, you know what? We can make money sellin’ this food.’ So we bought a trailer and made some extra money on the weekends. Before we know it, we start forming lines because people look forward to our cooking every weekend,” Fasicka recalled.

Safaricom prepares to switch on Addis in early October

The amended National Payment Proclamation requires foreign and local fintech operators, including mobile money service providers, to pay a license fee regularly. The proclamation, which was passed by the Council of Ministers last month, is expected to be ratified once Parliament is back from recesses.

Officials at the central bank told The Reporter that “the amount is not fixed. It will be stated in the directives of the proclamation. We are currently finalizing the directive required to put the proclamation into effect.”

The amendment of the 2011 proclamation is necessitated to open the mobile money sector to foreign operators. This came especially after Safaricom Ethiopia requested to bring onboard its mobile money arm, Mpesa.

However, Mpesa, a Kenyan mobile money service provider awaiting the amendment of the National Payment Proclamation, is unhappy with the requirement for a license fee, sources close to the matter told The Reporter.

Mpesa is already undertaking preparations to enter the Ethiopian market after government officials gave the green light last year. Managers of Safaricom Ethiopia also confirmed to The Reporter that technical work is already afoot.

“Mpesa has already started building the backdoor software developments. At the beginning, Ethiopian officials told us there would be no license fee for Mpesa. But now, they are telling us there will be a license fee,” complained an official working with the Safaricom Ethiopia, linking the inconsistency with the ebbing Ethiopia’s forex reserve.

However Tewedaj Eshetu, public relations and communication manager at Safaricom Ethiopia, said, “We are waiting for the proclaimation to be ratified.”

Managers of local mobile money companies believe the license fee is a global trend and the amount is not as large as many fear.

“The NBE consulted with owners of mobile money companies before approving the amended Payment System Proclamation. Comments and complaints were included during the stakeholders’ discussion on the draft document,” said a manager of a local mobile money company.

On the other hand, Safaricom Ethiopia is currently preparing for a wide service provision.

Safaricom will launch commercial service in Addis Ababa at a national level in October, according to Tewedaj, though she refrained from disclosing the exact date.

However, sources close to The Reporter disclosed that the launch date is slated for October 6, 2022. A grand ceremony in the presence of higher Ethiopian officials and top management of the five consortiums of Safaricom Ethiopia Plc is expected to be held on the day.

Safaricom launched its first service in Dire Dawa town last month, with a plan to reach 25 cities, including Addis Ababa, by April 2023.

Ever since the start of a brutal war between the government of Ethiopia and the forces of Tigray People’s Liberation Front (TPLF) following the latter’s unprovoked attack on the troops of the Northern Command of the Ethiopian National Defence Forces (ENDF) based in the northern region of Tigray on November 3, 2020, Ethiopia has been subjected to an unrelenting campaign of hybrid warfare waged by a set of actors with vested interests. The campaign has comprised of different actions including an informational warfare depicting Ethiopia in a negative light, a coordinated diplomatic pressure aimed at coercing Ethiopia into submitting to the demands of the TPLF as well as imposing punitive sanctions on the country and withdrawing its benefits under the United States’ tariff-free African Growth and Opportunity Act (AGOA). Western governments and such institutions as the U.N., Western mainstream media, humanitarian aid agencies, human rights “defenders” and think tanks figure prominently among the slew of actors which have been involved in the grey-zone tactics being pursued against Ethiopia.

The latest example of the diplomatic pressure being brought to bear on Ethiopia is the release this week of a politicized report by the International Commission of Human Rights Experts on Ethiopia (ICHREE). Derided by any Ethiopians as a braze attempt whose overarching goal is to demonize the Ethiopian government, the ENDF, the Amhara Militia and Fano, the report’s “findings” gloss over documented atrocities perpetrated by the TPLF. The report says the Commission has reasonable grounds to believe that the ENDF and Eritrean Defense Forces (EDF) committed a catalogue of egregious crimes ranging from widespread extrajudicial killing and injuring of civilians to rapes and other forms of sexual violence against Tigrayan women and girls, and looting and destruction of civilian infrastructure. It also indicates there were reasonable grounds to believe that the Federal Government and allied regional State governments implemented a widespread range of measures designed to systematically deprive the population of Tigray of material and services indispensable for its survival, including healthcare, shelter, water, sanitation, education and food. As for the TPLF, it says Tigrayan Forces have also committed acts of rape and sexual violence, albeit on a smaller scale, and killed civilians and persons rendered hors de combat, looted, and damaged or destroyed civilian infrastructure and property in two towns in the Amhara region.

The ICHREE report is riddled with a raft of shortcomings that rob it of credibility. As the Ethiopian government says, “… the report was written in breach of all principles of professionalism, independence, impartiality, and standards of proof entailed in any such process under international practice”. The Commission, by its own admission, carried out a remote investigation into selected incidents and themes even as it excluded from its report the serious human rights and humanitarian law violations which could amount to war crimes and crimes against humanity in the Afar region. The omission of an entire region— whether by design, negligence or lack of capacity—from the Commission’s investigative work misrepresents the true state of things in the war-affected northern region of Ethiopia. It also constitutes a clear failure to “conduct a thorough and impartial investigation into allegations of violations and abuses of [international human rights law, international humanitarian law, and international refugee law in Ethiopia committed since 3 November 2020 by all parties to the conflict…] by building upon the report of the Office of the High Commissioner and the Ethiopian Human Rights Commission.” Moreover, the Commission’s use of language implying that the Ethiopian government has engaged in acts that may amount to ethnic cleansing is entirely unbefitting a human rights body and lays bare its political bent.

The Ethiopian government had rightfully condemned the decision to establish the ICHREE from the outset, describing it as being imposed on it without its consent and an unwarranted meddling into its internal affairs under the guise of protecting human rights. The Ethiopian Human Rights Commission also reserved criticism for the decision arguing the creation of a new body was repetitive, counterproductive to the ongoing implementation processes as per the recommendations of the joint investigation it undertook with the UN rights office into the alleged violations and abuses committed prior to the unilateral cease-fire declared by the Ethiopian government in June 2021, and further delayed redress for victims and survivors. In fact following the adoption of the joint investigative report, the Ethiopian government established the Inter-Ministerial Taskforce (IMTF) to comprehensively deliver on accountability and redress measures and initiated an independent criminal investigation. These flaws thus tends to undercut a fundamental principle of international law, namely that the primary responsibility for the promotion and protection of human rights rests with states themselves.

Western governments and such international institutions they control as the U.N. have a checkered history when it comes to the protection of human rights. Although they espouse human rights values in their rhetoric and policies, their excoriation of human rights violations are by and large is dependent on the extent to which other countries (or certain groups) are willing to obey their commands. Consequently, the horrendous human rights violations states and groups, such as the TPLF, that have cultivated friendly ties with the West or dutifully carry out the West’s bidding, commit are whitewashed or completely ignored. That is why the assertion that the ICHREE magnified the alleged atrocities committed by the Ethiopian government while making a perfunctory mention of the slaughtering of innocent civilians, rape and sexual abuse, use of child soldiers, pillaging, and destruction of civilian infrastructures the terrorist-designated group is guilty of would not be far off the mark. If the U.N. or for that matter any other international body tasked with advancing the protection of all human rights for all people, empowering people to realize their rights, and assisting those responsible for upholding such rights in ensuring that they are implemented, they must never be weaponized for political ends.

Budget allocated by the Ministry of Education for public universities has been utilized for political purposes, a report published by the Ethiopian Ethics and Anti-corruption Commission reads.

The Commission’s report, which was initiated to assess corruption risks in the private and public educational sector, highlighted a plethora of issues in both public and private-owned educational institutions which severely compromise the quality of education.

The report, which The Reporter has obtained, shows that there is a corrupted and political party-affiliated organizational system in educational development programs in those institutions. Illegal and inappropriate recruitment of teachers and other staff members, employing relatives and family members and recruitment of staff with fake educational certificates are also mentioned.

Many staff members of some educational institutions have employees with fake education certificates, while private university colleges are printing and selling degrees and diplomas like a good, and registrars purposely destroy students’ certificates and request money to replace them, according to the report.

It showed that while the university structure attempts to preserve the reputation of those who are in power, private schools, on their part, seek to preserve the interests of their students as commodity customers.

The absence of teachers from their classes, fake educational certificates, leaders’ engagement in theft, illegal employee recruitment and development, inappropriate procurement, lack of clear transparency and working system, inappropriate registrars’ staff members’ engagement malpractices, and tender embezzlement pose risks to educational quality, according to the finding.

The report underlines how colleges and university administrators compromised the quality of buildings by plotting and signing with the contractor to accept buildings before their completion date.

The study, which was conducted in 61 institutions, revealed a lack of internal financial control mechanisms, purchased goods of low quality, and budget allocation for politically motivated activities outside educational institutions’ key responsibilities.

Most of those educational institutions were reluctant to provide the requested information to undertake the assessment, unable to obtain accurate information and due to the absence of leaders in their working places, according to the finding.

The Reporter’s endeavors to get comments from the Ministry of Education bore no fruit as some officials were unable to respond.

However, Ethiopia’s education and training authority communication director, Tarekegne Geresu, speaking about private colleges, said that despite there being certain issues that might be considered findings, the authority has clear criteria to uphold rules and regulations in private schools.

Tarkegne also mentioned the authority’s ongoing efforts to identify and take serious measures against over 200 institutions, reaching up to the revocation of licenses and closure of institutions.

“After graduation, we provide authentication for every single degree certificate, and unless the authority certifies this certificate, employers should not recruit those with unverified certificates from private colleges,” Tarkegne told The Reporter.

Only seven insurers meet the new threshold

The National Bank of Ethiopia (NBE) raised the minimum paid-up capital of insurance firms by six-fold. The revised ‘Minimum Paid-up Capital for Insurance Company’, which is effective as of September 15, 2022, replaced the existing threshold introduced in 2013.

The new capital requirement to obtain a general insurance license is 400 million birr, up from 60 million birr. The minimum capital for long-term insurance licenses was also raised from 15 million to 100 million birr. A company needs to deposit 500 million birr in a closed account to obtain a license for both, which was 75 million birr under the old directive.

Existing insurance companies whose paid-up capital is below the new threshold are given a five-year window period to meet the new minimum threshold by the end of June 30, 2027. However, these insurers are required to submit an action plan to the NBE by October 16, 2022.

“There is plenty of time to fulfill the requirement. The minimum requirement was very low from the outset,” said Zafu Eyessueswork, a veteran in the industry and founder of United Insurance and Hibret Bank.

Fikru Tsegaye, an insurance profession known for his commentaries in the sector, also welcomed the decision.

“The inflation has been eating the capital of insurers. If you compare capital of insurance companies against dollar, it was declining, so the amendment is a step in a right direction,” said Fikru.

Out of the 18 existing insurance companies in the country, only seven have capital of more than 500 million birr, according to NBE’s report. The insurance industry has been struggling with low market penetration and declining premiums in a stiff competition for the limited market niche.

However, the old directive remains active for new insurance firms in the pipeline until September 15, 2023. This means organizers of new insurance firms can attain a license under the existing directive in the next year. A discussion is underway to adjust license fee required to acquire new license and renew existing ones. The fee is expected to be adjusted by 2000 percent, though that is still under discussion.

The new directive states that insurance companies in the process of share subscription that successfully collect a minimum paid-up capital of 60 million birr for general insurance business, 15 million birr for long-term insurance business, or 75 million birr for both, and submit a final application to NBE within one year after the effective date of the new directive, shall get the license.

Industry players called the new directive “hair-raising,” as the insurance industry’s growth remains nascent.

“Raising the minimum capital from 75 million to 500 million birr at once is very difficult. The new directive is inconsiderable to the difficulties the industry is facing. The industry has achieved very little capital growth in the past 20 years due to the nascent environment. The NBE itself has contributed to the weakness of the industry,” said an insurance consultant speaking to The Reporter regarding the new directive.

“The NBE was never giving appropriate attention to insurance, as the central bank was primarily occupied with banks. We have been requesting the government for the insurance industry to be regulated by a commission, authority, or agency separate from the NBE. We believe this will help the insurance industry to get better support and better attention,” the consultant explained.

Yesuf Ibrahim is a founding member of the National Movement of Amhara (NaMA). He worked as the head of the strategic sector in the earlier stages of NaMA’s establishment. After its establishment, he worked as the head of the strategic sector for two years. After serving the organization as a vice chairman, he is currently working as the head of the party’s legal and ethical regulations and as a manager of the government’s property management authority. He received his LLM degree in law from Addis Ababa University and has worked as a law lecturer at a university. The Reporter’s Selamawit Mengesha sat down with Yesuf on issues concerning the party, region and the country at large.

The Reporter: How would you describe your participation from the time you first started working with the government as an opposition party, and the process until you became the manager of the government’s property management authority?

Yusuf Ibrahim: I have been heavily involved since the establishment of NaMA until its present stage. NaMA’s ideology is not an organization that paints itself as a liberator. It is synchronized with the people and the country.

Because the Amhara people have special problems and are being attacked by the constitution and narrative, protecting the people is one of the political targets. However, we have come to the historical notion that the attack on Amhara people is not something that has a special historical origin but an effort to destroy the country by making the community a victim.

The movement is one that could be traced back to colonialism. Weakening the beliefs, values, and social status of this community can be a way to destroy the country. Its origin is a colonial idea. Because of this ideology, a number of internal anarchist institutions were created.

By establishing such organizations, a political party based on identity has been established over time to save the Amhara people, who have suffered a lot. When the government moves into the phase of “change”, it is important to try because “change” has not yet been seen. When we look at the power alignment in Ethiopia, it is not a place where NaMA makes friends easily. In the course of time, after studying the intricate web of power, we analyzed the power that could become the friend of the enemy.

Compared to that, even if we can’t get along with everyone, we can work with anyone. As for figuring out to what extent and with whom, there are those who are known for backstabbing, so that’s a start. It was a timely analysis that was not particularly favorable to the Amhara. Therefore, it was established to fight anti-Amhara organizations.

Currently, even though it is an institution with many problems, we have an organizational position supported by a strategic document that we must work on together with the government. In general, it is necessary to work together with the government. When elections were planned to be held during COVID, there was pressure from many political organizations. Working together with the government was our own initiative.

We asked ourselves how we could safeguard the long-term interests of our country and people. We are a political organization and we take a position based on who we believe will betray us. We do this within the bounds of the law. It is necessary to work together with the government. They did not try to make it as big as NaMA, but there was pressure from other parties to make NaMA a part of the government, but the government did not want that. Regarding this, we explained to them that Prosperity is a traditional government.

This showed that the government was not proactive and did not identify its partners. As a party, it contributes greatly to the work of saving the country. We believe that we have especially united the people.

During this process, there was a conflict in the nature of misunderstandings between various issues, and because the problems of the parties and the government were not resolved quickly, it started to turn into a war.

With all of that happening, it was important to work with the government during that period. But keep in mind that working together with the government does not mean that we are the government but, in some cases, groundwork needs to be done. We had the idea that politics based on cooperation, not competition, was best suited for the landscape of the country.

Since the NaMA did not have a clear idea about working with the government (that is, we joined the government while the country was at war), we discussed it twice with the government when the issue was raised.

The matter has been tabled at the executive level. But it was fundamentally ignored by NaMA.

When the authority was given, I was called on the phone. I arrived in Gondar at 5 o’clock in the morning and was told that the appointment would be at 7:30. They have their own reasons for doing so. Since the appointment process was during the war, it was completed in secret until the end so as not to overwhelm the government.

On the side of the Prosperity Party, there was a bit of a misunderstanding because I received a call from the Addis Ababa city administration and then, on the same day, I received a call saying that they were looking for you for an appointment in the Amhara region; I made my own decision and chose Addis Ababa.

There is no problem with opposition parties working with the government. In Ethiopia, the process of democracy should gradually develop over time. Democracy needs to be improved by learning to work together.

In fact, it would be great if NaMA worked with the government. It would have been helpful if the lower level of government was more involved in areas such as kebeles and districts.

I made a proposal that if the government does not give us authority on the lower structure, we should give up big authority positions. But the party was not unified and could not consider the proposal.

NaMA is a party established to represent the people of Amhara. The Amhara people want you to be the voice of your party in any way. Working with the government means leading a multi-ethnic population, and haven’t you faced challenges in the middle?

This is also an issue of the reform process that the party intends to follow. The reform will work to clarify which level and which concept we are working on. There might be some changes in concept with the change of leadership.

It is about continuing to explore our strengths and solving our problems. The government does not exist only through the executive branch. The government has three branches and includes Parliament in the constitution.

We have representatives in the federal parliament in the state. The relationship between the party and its members at the top should be defined. As a party leader, when we work with the government, it must be based on the party’s principles. If I am going to move in that way, we should either leave the party or leave the leadership of the government.

There should be a strict procedure. In the current state of affairs, the federal structure that our party and the country are led by all is based on ethnic lines.

The constitution itself rarely even uses the word “citizen.” We want this to be liberal over time. We follow the philosophy that individual citizens should be the foundation of democracy. We want our organization to be a center for correcting the many mistakes made by extremists.

It should not be restricted only to Amhara. It should also be connected with other communities. Once this is fixed, the Ethiopian status will be announced. We believe that when we work as a party and as Amhara, we are operating as Ethiopia.

The Amhara community is the Ethiopian community. It has been pushed by many things. We are not saying it should be paid by revenge. We only remember the past to be able to fix the future. We do not believe that our people would be harmed if equality and freedom prevailed in Ethiopia. This is a modern principle. I do not believe that I am an advocate for the politics of a community at any time. As a company, we believe that we work for all Ethiopians.

It is one of the pillars of our society that it should not be affected by special circumstances. We want to be seen from the Ethiopian perspective. We do not want to separate Amhara. We want it to be governed by justice along with its fellow citizens. Amhara is affected in the same way that the rest of society is, but the incorrect narrative that has developed over time must be corrected. The question of who is the representative of political philosophy is bound to arise. Since NaMA is of Amhara origin, it is organized accordingly.

It is necessary to adapt to solve this problem for the time being. I think NaMA can adapt to all the parties. While working here, I am color-blind. I have neither the capacity nor the desire to take sides by saying who belongs to which nation. I also do not share such political views. We think that the perceptions created on us by the TPLF is in conflict with the people of Tigray. This is because the TPLF has been equating itself with the people of Tigray. But we still see their segregation. We believe that the TPLF is a criminal group. During the century, narcissistic institutions were created to hold back society and live for profit.

A while ago, it was tiring to find the issues that separate the people of Tigray and the people of Amhara. It was bound by various social, geographic, religious, and economic ties. We have to solve the existing problems with different justifiable methods. As it is known in Ethiopia, we do not accept ethnic politics. Therefore, I am running the people’s question in alignment with the government’s work.

Is there a division between the leadership of the government and other members of the party? What kind of situation is NaMA in right now?

Currently, changes are made every time political dynamism changes. The struggle is that when more energy is needed, society needs change. We have gone through many problems in our struggle for organization and society.

As the country’s problems continue to expand, members of the family are always at war. Therefore, leaders and members do not meet regularly. NaMA’s children are dying on the war fronts.

Don’t ask me how a peaceful party can fight with weapons. Since the declaration of seclusion, there has been a call to participate in the war. War has been waged on the Amhara people directly.

There are NaMA members in Raya, Wolkait, and in all the districts where there were members that were killed while in command of the brigade. There are several fighters in the structure. Therefore, the central one, the one at the top of each leadership, and the one at the bottom are not formally connected; we are connected informally.

During the second round of fighting, the party did not have a central committee or executive meeting for four months. Many gaps were created during that time, and it is not possible to update regularly. Politics brings the change of opinion closer to you when you meet and update regularly.

However, the more it is separated, the more the case is defined. So far, we’ve been supporting the idea that had majority support in debates. I have never seen a decision made without the approval of NaMA members.

Because we do not meet regularly, we have lost the opportunity to make decisions through debate and consensus. There were talks of NaMA coming into government appointments without the party’s consent, but in the process, although there were violations of discipline, the matter was adopted at the central committee level and this concept of working together will hopefully continue in the future.

The forces that wanted change were created in NaMA. First, there was a question that you should not lead the party part-time while in government, as the party requires a full-time dedication.

We will restructure. The party is a movement, and a movement needs to open up. It is not just a random party in power. Until the struggle reaches a certain level, the movement will open its doors and attract new talents, and it is not feasible to say that I will remain on the throne of the establishment once it is over. It is not correct, and it is not the principle of our struggle either.

People feel worried if there is no open discussion. There will be people who want to make the party a powerhouse. But in the end, the contradictions could not be easily reconciled.

On the other hand, it has shown differences in the way we see politics. But it is only in the top management that the difference should be noted. A certain difference was created between the Central Committee and the Executive Committee with only 10 to 20 people. There is no difference in the bottom structure of the broad members.

Due to Bahir Dar’s protest, I resigned on my own accord and changed from the position of vice chairman to the law department. What the party wants is not the change of one person or two. They say the movement wants to change from top to bottom. And this is their right.

An inquiring generation should be encouraged. There were misunderstandings with the top management. It deviated from NaMA and the general concept of democracy, which did not accept the reform and were going through a process that did not encourage internal democracy.

It is not a question of whether we like or hate individuals; it is a matter of history. It is the struggle of our people. It doesn’t define division for me. It is fundamentally settled by law. The structure is not split.

The main foundation is structure. I don’t think that the creation of division in the leadership of two or three people will divide the structure. We intend to hold a general assembly by October, which will hopefully restore NaMA.

Will the party become more organized by resolving the controversy within NaMA?

NaMA will come prepared. This happens at any party because it is a massive collection. The party needs time. The fight will then go into negotiations. The negotiation will be based on the concept of transitional justice from our point of view. There are a lot of processes that go through both material and human life. All of that should be resolved.

Politically, where are we going? Where are we going as a country and what is our collective ambition? NaMA must be prepared for this soon.

There are those who have applied what we brought as an idea to Ethiopian politics, which shows NaMa’s power to exert great pressure. After many pushes, debating and explaining to the people of Ethiopia, if politics is about to bear fruit, it will not happen unless the party exists.

There may be individuals with egos within the party leaders. They should be dealt with on the inside first. We were hoping that it wouldn’t show on the outside.

Most of the leadership and central committee members have petitioned the General Assembly’s request. A petition has been filed for reform. Yet undisciplined work is being done against the will of the people and the structure of the organization. That should be corrected. They are all being looked at from every angle.

Let us come to the current national issues. We have been at war for the past two years. Various efforts have been made to resolve the war peacefully, but another war broke out. Can you explain to us the whole political process and what Ethiopia’s politics should be in the future?

NaMA wants Ethiopian politics to be based on citizenship. Ethnic politics means a gathering of extremists where everyone who is offended hides. The TPLF and ONG should be held accountable for the Ethiopian-ism they attacked. It is a country known for caring and living together. Politicians must engage in a certain strategy. The structure should not be manipulated as intended.

NaMA will always cooperate with forces that can weaken the TPLF. As the TPLF has been in politics for a long time and has led the country, it must correct the mistakes of the past by deciding which is the most viable path for the future. They could not think of a way that would benefit the people of Tigray, whom they think they represent.

I do not think that the separation of the Amhara and Tigray peoples, a society that has lived together for many centuries and is bound by religion and culture, will achieve the goal. The people of Tigray must show that they are not enemies to the Amhara community.

During the war process, NaMA has been doing many other things by standing with the defense force, delivering food and coordinating with the diaspora. When the Amhara region was in battle, it gave studies on why they should fight for a purpose. It was heavily involved throughout the war.

How and under what conditions do you think the negotiations should be conducted?

Conflict always ends in negotiation. Even if the TPLF itself thinks that we should be divided, it knows that they will lack both resources and manpower. The TPLF should not go any further on the path of brutality and revenge. Ethiopia should follow the liberal approach and solve its problems. The war against the TPLF was not for revenge but was brought on by themselves.

In my view, I want transitional justice to happen. It is not because I believe transitional justice would calm everything down, but because it is an option. Justice is being served now, not for revenge but to bring harmony and move forward.

Negotiations should be conducted for the sake of peace and justice, with the decision that it will not happen again in the future and that what happened in the past was not right.

But in Ethiopia, it is seen that negotiations are used as a plot resource. It has been observed that only if the power to be negotiated is dangerous and one party wants to survive, is the proposal submitted for negotiation.

That is why I am afraid that the proposal presented by the TPLF might be some sort of treason. The deal requires a genuine broker. Since the war will inevitably end in negotiations, it all depends on who comes up with the better negotiating package. There is a risk that the negotiator who believes in violence may resort to violence at the negotiating table.

The TPLF should not exist as a political force. It is difficult to say that the TPLF is deceiving all these people with mobilization. I think most of them believe it. While the party was scattered, the individuals in the party lined up, reorganized, and attacked the defense force.

Such regeneration should not be ignored. The security guarantees should be adjusted and then they can enter into negotiations. A ceasefire is one way it can be done. But beyond that, there must be other stakeholders. The negotiations that should have been entered into after the collapse of the Derg left us in the situation we are in now. I believe that the Amhara region should have a negotiator on their behalf.

In the end, it should be known what level our politics should be at. Any person should be able to go and live in the area they want without being displaced from place to place because of ethnicity.

The TPLF has the capacity to rebel, not organize and re-enter. War itself should not be based on ethnicity. Who will benefit from this war?

There is no need to pretend like there is a war between two different countries. Both must work together. The negotiations must be conducted in moderation. Negotiations range from a ceasefire to a new proposal.

Although the African Union has little experience, it must mediate. They should all enter into the negotiation with good intentions. The very idea of secession is unethical.

Olufunso Somorin (PhD)

Olufunso Somorin (PhD), regional principal officer of climate change and green growth for the eastern Africa region at the African Development Bank (AfDB), was in Addis Ababa to participate in a high-level technical conference on climate change aimed at summarizing takeaways for the upcoming COP27 conference. He presented his research titled “Adaptation Agenda: Beyond COP27” during the meeting on September 13 at the Hyatt Regency in Addis Ababa. Ashenafi Endale of The Reporter sat down with the expert to learn more about initiatives underway to lessen the effects of climate change on the global south and the rest of the world.

The Reporter: Africa emits only four percent of the global Greenhouse Gas emmisions (GHG), so why should Africa bear the burden of climate damage caused by the rest of the world?

Olufunso Somorin: Africa’s total GHG emissions are 3.8 percent. Compared to countries such as the US, a region like Europe, or even a country like China, this is very low for a continent of over one billion people. Africa is not responsible for climate damage.

However, when it comes to the impact of climate change, Africa is the most vulnerable. That is why more conversation is crucial to changing the global climate change discourse.

The region that is the least responsible is the region that is the most affected.

How much of their GDP are African countries losing to climate change?

The impact is already affecting the African population, economies, infrastructure, etc. The development we have achieved so far is under enormous threat due to climate change.

Every African country spends anywhere between two percent to 10 percent of its annual GDP dealing with the effects of climate change. This is an enormous resource that could be used to build more infrastructure, train more teachers, invest in energy and other development projects. The magnitude of climate change in African economies is hugely affecting development.

A large chunk of the available climate resources in Africa goes to mitigation. Currently, you are advocating shifting that resource from mitigation to adaptation. What exactly do we mean by climate adaptation projects?

There is a paradox that the region that needs the most global climate finance to respond to climate change is also the region getting the least.

Africa receives only three percent of global finance. This is despite the fact that Africa is the least contributor to the climate crisis but the most affected. This is what we need to change. Between 80 and 90 percent of the money that comes to Africa is used to mitigate climate change. Of course, mitigation is also good for development. When you use renewable energy, you are increasing access to power.

But adaptation, which is implemented across many sectors, is much more rewarding. Our economies in Africa are very dependent on weather systems. Agrarian societies account for up to 80 percent of the population. The moment there is a change in weather, for instance, a five percent change in rainfall, can lead to a significant impact in crops, and instant impact on food security. If the rain is delayed just by a season, it has a direct impact on food security.

So adaptation entails doing agriculture correctly, using water resources appropriately, refraining from activities that affect rain, and changing one’s mindset in order to achieve a stable climate. Adaptation is not for one sector, it is for every sector. There is a possibility in every sector for adaptation.

How much is Africa spending on climate change, and how much of it is coming from local financial sources?

There is a data accuracy problem. There is a lot of funding and finance that many countries are undertaking to handle climate change. They are not reporting it. Keep in mind that African countries spend between two and 10 percent of their GDP to respond to climate change disasters. So the data is not perfect because they are not reporting it precisely.

Domestic resources for adaptation are still low. Of course, it is very much under-reported. Nobody wants a climate-resilient modern Africa. Nobody desires a prosperous and modern Africa. So it should be our desire and our job to be climate resilient. We already paid for it. Our responses must be structured, coordinated, and lasting.

Is humanitarian assistance mitigation or adaptation?

Humanitarian assistance is a short-term coping mechanism; hence, it is a mechanism. Adaptation is a continuous, long-term solution. You do not move from zero to a hundred at once. The greater the risk, the more we need adaptation.

So adaptation is always in relation to the risks at hand, so you cannot achieve the highest level of adaptation. People affected by climate change on the ground are coping every day. But those are short-term solutions. They cannot respond to larger pressures.

A humanitarian response, if it is to respond to a climate crisis, is an adaptation measure.

How can we shift from mitigation to adaptation?

We do not shift in a way that ignores mitigation. We allocate more values, resources, responses, institutional systems, and capacity for adaptation.

Have African countries approved the National Adaptation Finance Framework (NAFF) so far?

NAFF is an idea we are testing. In many countries, including Ethiopia right now, we have developed a number of policy documents on adaptation. We have a national adaptation program of actions (NAPA), national adaptation plans (NAPs), and an adaptation component in our NDCs. Ethiopia has a climate resilient green economy (CRGE) strategy. Apart from the NDC, there are a lot of adaptation plans in various sectors.

However, none of these plans specify where the money will come from. All countries, including Ethiopia, have the plans but lack the financing. That is why we are developing the framework.

For instance, if Ethiopia introduces a strategy that charges an additional two dollars per every tourist or traveler coming to Ethiopia, which the airline collects per ticket, and that two dollars goes to a climate resilient fund, that is an innovative way of raising money to finance adaptation. Ethiopia can also levy a 0.5 percent tax on every business operating in the agricultural sector, and we call it the ecological or agricultural productivity fund.

We can also formulate legal frameworks in which every private sector operator reports what they are doing on climate change. You give them a template for how they report. Then the finance is aggregated and channeled to adaptation. We are ultimately thinking of a national level adaptation approach.

There is no such thing as a climate change project. What we have is a “climate-informed development project.” That is very important. If we mainstream adaptation into all our development projects, that is how adaptation works.

Do you recommend mandatory finance contributions for the private sector and other institutions?

Consider it a business strategy. The financial framework in Ethiopia may be different from that in Kenya, Nigeria, or others. Adaptation is very local. Adaptation does not operate in a vacuum. Adaptation is nested in an institutional structure in place, social relations in a country, and state-society interactions. It is crucial to capture that and craft a financial strategy around it.

We must start thinking of adaptation as something critical for development. We have to find an innovative way of funding it.

How can the private sector turn the climate change crisis into a business opportunity?

The private sector itself depends on climate change. Climate change is a risk for the private sector too. By investing in adaptation, it is also a way for the private sector to guard its own investments and do sustainable business. Businesses are not completely insulated from the climate crisis. When they see that as a threat to their business and start to respond, businesses start to adapt.

The private sector is not exonerated. There are opportunities and advantages for the private sector to channel private capital into adaptability.

Do you think Africa is exploiting carbon trading?

The good thing about the carbon market is that even though it focuses on mitigation, it exists largely in sectors that are adaptability-oriented. Whether it is forestry, as in the African case, conservation, nature-based solutions, carbon trading can be an adaptation intervention. Reducing emissions is the core target of all NDCs, including Ethiopia.

Carbon trading is a good opportunity. The financial flow from the carbon market and investment can also trigger adaptation finance.

What do we expect from COP27?

Cop27 is very important for Africa, because we need to be able to make progress on the financial commitments that the developed countries have made. There is also something about capital that is additional and predictable.

We need capital in quantity and quality. We need a lot of money. Somebody can pledge a trillion dollars and put too many conditions on the table, so you may not get even five percent of it. In such cases, the money has the quantity side, but the quality side is very difficult.

Africa needs a climate adaptability roadmap. Climate action is just a basket containing mitigation and adaptability. The truth is that mitigation and adaptation are different. The approaches, strategies, implementation modalities, design, and projects are different.

What we need is an adaptation strategy cognizant of the African context that is structured and practical.

So in global climate finance, a specific resource for the adaptability finance segment is crucial.

One of the agendas expected at the COP27 is the issue of banning the extraction of fossil fuels. What is your reflection on this, as Africa is just beginning to extract its fuel resources?

It is still a conversation at this early stage. The global conversation at the climate conference is very cognizant of Africa’s concerns. When we say green energy, it is a gradual transition. You do not go from fossil fuel to green energy in one day. There has to be a gradual transition. Substitution for fossil fuel is in the long run. This plan must also capitalize on technology.

Do not forget that fossil fuel is a natural endowment for these countries. How do you tell countries like Angola, Nigeria, or others to go from burning fuel to 100 percent green? We need to clarify that. I do not think the global system is going to put a gun to your head. It is about placing attractive incentives in place, and support mechanisms, to make that gradual transition.

For African countries, they are not under any legal obligation to make that transition. There has to be an incentive and encouragement for it.

The decision made 13 years ago to commit USD 100 billion to Africa’s climate response remains a pledge. Now we expect more pledges at the conference. Why do we always believe in pledges that will not materialize?

The way global diplomacy works is that we must always agree to move forward. So there is an agreement in principle that USD 100 billion a year comes from developed countries. That is one side of the coin. The other question is, do they really actually deliver? Some countries did, and many did not. COP27 is expected to urge these countries to push for these pledges to be met.

Is there any mandatory legal framework or convention to make countries fulfill their financial obligations as per their contribution to GHG emissions?

Climate diplomacy does not work as expected. Probably global trade and other sectors based on international laws. But for climate issues, you need to reach consensus. Most of the time, you are not going to find a situation where there is a legal penalty. It is not an annual contribution and “if you do not pay, you go to jail.” There is no climate court. Countries must understand the value of those resources and their contribution to climate value.

Do you think the world needs green politics like in the 1980s and 1990s, or do you think the current climate crisis can be solved under the conventional mainstream political systems?

First, to be honest, we have made progress since. It might not be on the scale we anticipate. But we have made enormous progress by bringing people around the table. The fact that we are having conferences for parties to discuss climate is a good sign. Maybe developed countries might say “we pledged USD 100 billion for Africa annually. We managed 80 billion,” and they might promise to improve it.

That is why I call it a fragile win. It is not a complete win. But it is still a win.

Do we need something radical? The answer is no. We would not get that. Because global diplomacy does not work around radicalism, it works around building consensus on the solution and the way forward. Then some countries may be part of the solution. The bigger part of diplomacy is that the further you talk about problems, the more you can talk about solutions.

But for many African countries, that is not enough and you want to see results on the ground. That is still a work in progress. So we expect a progressive step forward at COP27.

You recommended in your research that “debt for climate swap” as an alternative climate financing method. Do you think that can work, as many African countries, including Ethiopia, have piled up external debt?

These are the innovative climate financing schemes we are talking about. During the 2008/9 financial crisis, a country not far from here, Seychelles, was affected, as a service-based industry was severely affected at the time by the crisis. The Seychelles was able to negotiate “a debt for nature” swap. So a certain portion of its external debt was swapped for natural protection.

Basically, instead of paying the external debts back, you are allowed to use the money to do projects and investments that sustain the environment. We can do that as well. There is also a resilient bond, which is doable.

African countries need to come up with different innovative financing schemes because the one that works in one might not work in the other.

The fundamental departure is, let’s go beyond concessional loans and grants. Let us bring in equities, risk-sharing facilities, and all the types of financial instruments. Debt for nature swaps are just one instrument. I really like this scheme, and I would love to see it work in other parts of Africa.

Currently, the Horn of Africa is being rocked by an elongated climate crisis.

The Horn of Africa issue is a very special case. This is a region where some of the scariest challenges of climate impacts are unfolding. This is also one of the most resilient regions. In the past, regions had to deal with drought every decade or so. But this time, the frequency has been very high. Yet, many governments, institutions, and even the private sector are rising to the task of dealing with the crisis.

But we must start planning for the long term. Our actions in the Horn region are always reactive. We always start doing things after a drought has struck. Early warning systems, productivity optimization, water harvesting systems, and other readiness are very important ahead of the next drought. Proactive adaptation investment is very important instead of the reactionary type of investment.

In the Horn, resources are mobilized every time drought comes around. Why is it that a lasting solution remains difficult? What kinds of projects are needed?

Some drought resilience programs and projects are underway. The AfDB is one of the largest donors of drought-resilient programs in the Horn region. What is important is that we must coordinate projects at different levels.

Many initiatives are done at scattered levels, and they are not coordinated. Most importantly, we must push for proactive investments. We need more focus and investment on development spending so we can reduce our humanitarian spending.

Governments keep saying “we do not have money” and suddenly, when a crisis happens, they find money. Why do not we find the money before the drought strikes? That could have saved a lot of lives and damage.

Drought can happen, but it must not leave a humanitarian crisis behind. There are countries that face drought all year round. But we have to find different ways to change things.

Most importantly, we need partnerships at different levels.

Sewagegn Chane is director of the Public Financial Institutions supervisory department at the Public Enterprise Holding and Administration (PEHA), which regulates state-owned enterprises. Sewagegn is currently responsible for directly supervising the Development Bank of Ethiopia (DBE) and the Liability and Asset Management Corporation (LAMC). The Commercial Bank of Ethiopia (CBE), Ethiopian Insurance Corporation (EIC), and the National Lottery were also under his supervision, until they are transferred to Ethiopian Investment Holding (EIH) past May.

Working in public financial institutions for 30 years, Sewagegn initiated the establishment of the stock market in Ethiopia, which is bearing fruit eleven years after the first feasibility study. He was also vocal and key in rescuing the DBE, initiating Ethiopia’s first reinsurance company, Takaful (Islamic insurance), among others.

Sewagegn is also researcher at i-Capital Institute and organizer of the East African Finance Summit. Currently, he is leading two teams formed at the institute, studying the establishment of an investment and agricultural development banks in Ethiopia. Although he has been advocating ending state protection over the financial sector for years, he has currently changed his mind, just as Prime Minister Abiy Ahmed (PhD) authorized a policy that envisages opening up Ethiopia’s financial sector to foreign competition. Sewagegn believes the banking sector should remain closed at least for the next few years. The Reporter’s Ashenafi Endale sat down with the public finance guru. The excerpts, does not necessarily reflect PEHA’s position.

The Reporter: What is the progress in reforming public financial institutions, which commenced after Abiy came to power?

Sewagegn Chane: The biggest reform we undertook is in the DBE. In 2018/19, the House of Peoples’ Representatives (HPR) decided DBE cannot continue as a financial institution and debated on how to dismantle it. That year, the bank reported 765 million birr loss so the HPR decided that the bank is not supporting itself, let alone the economy.

Myself, Haileyesus Bekele, the president at the time, and Yohannes Ayalew (PhD) DBE board president at the time, were called by the HPR to explain the issue. At that time, Public Finance Institutions Agency was a separate entity outside PEHA. The agency was led by Sintayehu Hailemichael (PhD) and I was the deputy director for operations. When some 36 SOEs were put under PEHA in 2018/19, the agency was included under PEHA, as a directorate.

The Budget and Finance Standing Committee at the Parliament insisted the DBE must be dismantled, because it was reporting a loss consecutively. The three of us were called to give our final comments on the committee’s decision. The committee was told that the fundamental problem of the bank was the lack of institutional independence.

Everybody was intervening in the bank, and it was unable to operate as a bank. The PM, other ministers, sectorial institutions, and even individuals have been meddling in DBE’s operation. Secondly, the bank gives loans but does not collect. Those who took DBE loans view it as the government’s budget, not as a client. Most of them had the “developmental investors” plate.

They take a loan and divert it to other businesses. Commercial farming in Gambella and Benishangul are good examples. I was in Gambllea for a year and half, to study why DBE’s loans failed there. There are so many rain-fed projects there. Particularly, six of those that took loans completely diverted the money to other businesses, instead of the commercial farming.

I stood before the standing committee, and pledged to give the DBE additional time. I told them if institutional freedom is restored, relationships with clients will be straightforward, and the bank’s loan collection capacity rebuilt, bringing DBE on track. So I asked the standing committee to give us just one year, and if we fail to rescue the bank in that year, then the committee can dismantle it.

Yohannes on his behalf explained how the IMF and the World Bank are happy to see the DBE dismantled because they do not want development banks in developing economies. He also elaborated how important a development bank is for Ethiopia. After a brief tea brake discussions, the standing committee announced it granted the one year time.

Immediately, we embarked on the reform agenda, introducing seven reform pillars. One of the biggest reform pillars was reducing DBE’s Non Performing Loans, which was over 40 percent at the time. If the bank cannot collect the loans, it cannot disburse loans the next time.

DBE’s NPL at the time was weighed in rain-fed agriculture and textile. So, we stopped any further loans for rain-fed agriculture. In textile, many foreign investors took loans in billions but did not pay, so we decided to take over all the projects that are not paying back their loans, and transferred them to other investors.

We also took the contract management of non-performing projects. For instance, the DBE took over the management of Elsi Addis, Etur and other textile factories, for the time being. Except Etur, most of these projects have been transferred to new investors, without reaching the foreclosure stage.

The major project left on our hands to date is Ayka Addis.

The other serious measurements we took were barring any officials from intervening in any loan appraisals and disbursement processes. Before the reform, orders for some loan approvals were given from the Office of the PM. Officials from the Industry, trade, agriculture, and many other ministries used to give such informal orders to the bank. Now, even the DBE board cannot involve in loan disbursement cases, except on strategic issues.

We managed to reduce DBE’s NPL to 30 percent this year, including Tigray loans. It is actually 17 percent, if loans in Tigray are excluded, which are affected by the war in northern Ethiopia. Profit comes from loan interest. If the loan is not collected, there can be no profit.

We managed to generate 1.2 million in 2019/20; just a year after the reform was launched. This year, the bank generated 3.9 billion birr in profit. If we did not put aside 4.1 billion birr provision for the Tigray loans, DBE’s profit this year could have been 7.8 billion birr. The DBE is rescued now and everybody is acting as a client now.

DBE’s source of finance is the guarantees from the Ministry of Finance and the National Bank of Ethiopia (NBE). The capital has increased from five million to one billion. The macroeconomic committee approved a study to allow new DBE bond, effective since January. This is apart from the GERD bond, which is the DBEs source of finance.

Before the reform, all the financial indicators of the bank were negative, and unhealthy. We completely reversed all of that, except for the NPL. Before the reform, there were only expenses and disbursement, but now there is income.

Out of the 31 strategic measurements we stipulated under the seven reform pillars, 21 are aggressively implemented and ten are in the process. Only one measurement has not started, which is the digital technology and modernization initiative.

The PEHA and DBE’s board has contributed for the success of DBEs management. One of the positive factors is the steel-serious discipline of Tegegnework Getu (PhD), the board chair of DBE. As a board chair, he is opaque to any external influence or favor. He never took stipends and incentives allocated for board chairs annually. Even he uses his own car for DBE activities.

Yohannes was the chief economist at the NBE for a long time. How did you believe in him, that he could rescue the bank?

Under past presidents, the bank had many deviations and exceptions. Instead of going through loan approval and disbursement procedures, loan seekers directly contact the president and get the loans, informally.

For instance, after we banned DBE loans for rain-fed agriculture in 2018/19, the bank gave 120 million for rain-fed agriculture project. The president at the time said he was forced because certain officials at the Ministry of Agriculture managed to give the order via the Office of the PM.

Surprisingly, the board chair does not know about the loan. The bank was bleeding. We had to be brutal to stop the bleeding. Most of the bad loans were given during Isayas Bahre’s time. Both Haileyesus and Getahun Nana were unable to save the bank. Our biggest worry was that Yohannes might decline the role to lead the DBE.

Over 200 large scale agricultural projects, and a number of foreign textile investors took loans from the bank and failed to pay. Are you pursuing them legally?

We are trying to acquire the lands currently. Our biggest problem now is with the regional governments of Benishangul and Gambella. The land is the key asset the investors provide as collateral to take the loan from the bank.

After the investors fled without paying the loans they took, the DBE has to acquire the lands, since it is the collateral. Once we finalize acquiring the lands, we will transfer it to other investors. Then we will recover the previous loans.

I heard the Benishangul and Gambella regional governments are demanding it pays taxes on the lands?

We reached agreements on some of the lands in Benishangul. There are ongoing debates on the amount. The bank agreed to pay the tax, if it agreed on the amount. The regional governments usually give one plot for multiple investors, so one certificate is given to multiple investors. The regional agriculture bureau has been reporting to us that the lands were being cultivated by the investors, which was false.

In general, rain-fed agriculture and textile investments have bled DBE.

For instance, Ayka Addis’s investor used informal channels to get the loans, instead of going directly through the bank. It either goes through the PMO or other officials. Solving all this was not simple.

Most of DBE’s clients were unruly. They had the right to take the loan, and the right not to pay. So we disciplined the clients first, and reversed the bank’s practice of negligence. All this was done in three years.

How much is the land leased for the rain-fed projects?

The rate depends on the regions. Basically, tax, lease and anything related to the land is handled by the investors. But since the investors went bankrupt, and the DBE took the lands, now the bank has to pay them. This is the reason why the regional states are asking DBE for the taxes, because it is under the bank now.

The investors who took the land in regional states for commercial farming, left, and the tax holiday period is over. So regional states are now claiming the taxes and the DBE agreed to pay. This is the game.

Did the Gambella commercial farms failed by design?

The loan was supported by policy. The policy of initiating commercial farming and modernizing the agriculture was not wrong. So the DBE prepared policy and procedures.

The major factor for the failure at that point, was the decision to give loans for rain-fed agriculture. This was a mistake because the investors knew the loopholes and abused the loans and failed to return it.

The DBE is on the right track now but business continuity is more critical.

What are DBE’s sources of funds, after the NBE’s 27 percent T-bill is replenished?

The NBE introduced another bond this year, in which banks channel one percent of their loan portfolio to the DBE. In the past six months, a bit more than 10 billion birr has been channeled to the bank from this new scheme. Once we start from insurances, these two schemes will become our biggest source of funds.

The GERD bond and loans from international banks also generate finance. It also accesses external funds like SME loans, through the MoF. DBE’s T-bill is almost zero currently.

How much is the loan interest the DBE is paying currently, when will the rest mature?

The DBE pays interests by adding two percent on the saving interest, which means nine percent. On the other hand, DBE’s interest rate is between 11 percent and 12 percent, the least being for import substituting projects. The margin covers its administrative cost. So the bank is able to pay all its interests duly.

DBE requested to put Tigray NPL’s off its balance sheet. But NBE officials told The Reporter that it is not going to take it off its balance sheet.

If Tigray’s NPL is put-off DBE’s balance sheet, DBE’s NPL could be 12.5 percent. But including the Tigray NPL, which is 10 billion birr, the NPL stands at 30.4 percent. What we are saying is this 10 billion birr in NPL happened by factors out of DBE’s control. We are not asking the NBE to cancel the Tigray loan.

We undertook a detailed study on how the NPLs could be taken off the balance sheet, and presented to the NBE. We do not know why NBE is silent on the issue. The CBE also requested the NBE to take off two billion birr off CBE’s balance sheet. This was also studied and presented to the NBE.

The NBE first said the request should be processed by the Bankers Association but the issue is still in the process. It is illogical to keep inactive numbers on banks’ balance sheet. When unrest occurred in Oromia over the past few years, the NBE allowed loans of affected investors in the region to stay off banks’ balance sheet. The same can be done for Tigray. It is not a big deal. It is NBE’s decision but I do not know why it is reluctant when it comes to Tigray NPLs. Tigray NPL does not represent DBE’s actual performance, which is outstanding.

DBE’s outstanding loan is 63.4 billion birr. Total NPLs stood at 19 billion, of which 10.1 billion birr is created in Tigray since the war. The president of DBE requested to exclude the Tigray NPL but PEHA does not agree, unless the NBE approves it.

Another investor is negotiating to buy Ayka Addis. Will this be the last negotiation?

A number of potential buyers have been trying to buy Ayka Addis in the past but failed. Especially a Chinese investor was very eager to acquire Ayka Addis. Any potential buyer is expected to contribute 50 percent of Ayka Addis’s portfolio. For instance, the initial investment loan was USD 1.7 billion so the buyer is expected to contribute half of it. But the Chinese lacked capital so it requested to contribute only 10 percent of it, which means around USD 200 million, so we refused because we cannot breach the 50 percent law.

If Ayka Addis is sold, DBE’s NPL will drop to around 15 percent, from the current 30.4 percent. Ayka Addis is holding a huge loan. The principal loan is 1.7 billion, a decade ago. Including the interest, probably it is around USD three billion by now. The value of the machines, factory building, raw materials when the DBE received Ayka Addis, is valued at USD 1.79 billion.

By the way, we are still paying the salary of 4,500 employees of Ayka Addis, though it has not operated for years now. It is between 13 million birr and 14 million birr every month. We cannot abandon the employees, after the Turkish investor left. We are carrying all this cost.

There were also other alternatives for Ayka Addis, other than selling it.

There were three major options tabled. The first is selling to a capable investor or buyer. The second is operating Ayka Addis under a management contract, just like Elsi Addis and the third was repurposing Ayka Addis into an Industrial Park. Some three potential investors have been negotiating. The Chinese came last.

Currently, another negotiation is underway. We hope this will be the last one. It is a consortium of local and foreign investors. We will disclose it when it materializes. Ayka Addis’s operation ranges from cultivating cotton to sewing the clothes. It pins the cotton, dyes it, and makes the clothes. It is an end-to-end project. So the potential buyer is expected to specialize in all these value chains.

Will the new buyer pay Ayka Addis’s accumulated tax?

Under Ethiopia’s law, a company does not pay taxes if it declares bankruptcy. After the DBE took over Ayka Addis, the tax authorities are saying Ayka Addis must pay tax, since it did not undergo liquidation. Ayka Addis was not operating for the past eleven years. So, the tax authority is asking for back-taxes for all these years, stating the project did not declare liquidation. So we are arguing with the tax authority.

But the DBE declared foreclosure?

When the Turkish investors left and the DBE started managing Ayka Addis, the tax authority started asking for tax.

Amazingly, Bmet cables, one of the Turkish investments abandoned after taking huge loan from the bank is a good example of how much Turkish investor’s exploited us. Under the Turkish investor, Bmet cables utilized 40 percent of operational capacity but they were not paying their loan.

Now, the local buyer, Tadesse Admasu of Red Star Trading, is operating at 12 percent of its capacity due to different reasons. The buyer acquired Bmet paying 890 million birr. Now, it has paid all the loans owed to Bmet.

How much has Ethiopia lost because Turkish investors left the country without paying DBE loans?

Before, their equity contribution was 30 percent. This means the DBE contributes 70 percent of the investment. Under the previous ratio, a Foreign Direct Investment comes with USD 30 million, and takes 70 million. The foreign investors left without paying the 70 percent loan they took from the DBE. But now, we adjusted the equity contribution to fifty percent, for foreign investors. Local investors pay 20 percent.

FDI is needed to bring technology, capital, forex, and create jobs. It did not meet any of these targets.

One of the other loopholes FDIs has been exploiting is that they highly under invoice export price. They usually have subsidiaries or a mother company operating abroad. So they export the clothes to them, with fake price documents. These investors also import raw materials only from those mother companies or subsidiaries abroad. The FDIs operating in Ethiopia do not want to use local inputs. They export t-shirts with USD 60 cents from Ethiopia. But the buyer abroad, which is affiliated to the FDI, resells it at a much higher price. So the FDIs generate meager forex for Ethiopia. Their bank statements also indicate loss, always. Especially the expats brought by FDI are highly abusive. Bmet’s former CEO has been paid 500,000 birr in salary monthly. This is excluding housing, vehicle and other accommodations. Now we decided to reduce expats inflow.

That is why, just when we started being strict on Ayka Addis that the Turkish investor’s fled Ethiopia immediately, without handing over the project’s properly. I think they left for Burkina Faso.

Are there new public financial institutions planned to be established, particularly to finance long term development projects?

Four years ago when the bank was in deep trouble, we conducted a study to determine its fate. One of our alternative recommendations in the study was to breakdown DBE into three different policy banks; into an industry bank, agricultural bank and an SME bank. Finally, a decision to reorganize and reform DBE as it is was made. In the meantime, we conducted a study to renovate the bank; the ATA was also making moves to initiate the establishment of an agricultural bank.

The initiative to establish a stock market was also conducted by us. We have been trying to convince the government to establish a stock market for the past eight years. It is only realized under Abiy.

Now, the importance of an independent agricultural bank and investment banks is imperative for Ethiopia. In line with the agricultural bank, agricultural insurance and micro-insurance firms are necessitated equally. These firms protect the loans provided by the agricultural bank to farmers.

We conducted the “Proposal of restructuring public banks” in 2014. The proposal included the recommendation to determine the fate of the former Construction and Business bank (CBB). We did not just demolish CBB without a proper study.

The same studies have later been modified for the DBE. The modified study also recommended the vitality of Agricultural Development Bank, and mortgage bank (construction bank). The plan is for the CBE to stop mortgage financing, and transfer the role to the new Construction Bank (CB). In fact, the proposed CB partly takes on the role of the now defunct CBB.

Currently, we have established two working groups at i-Capital Institute, studying on investment bank and the agricultural development bank each. PEHA has the mandate to give birth to new public enterprises, apart from managing the existing ones. It can also decide on mergers, and dismantling of SOEs.

As long as Ethiopia is progressing from an agrarian economy to manufacturing, a stock market is very essential. If we need more robust manufacturing companies, we must build a robust stock market, where the companies are listed, float shares, and mobilize capital. A manufacturing industry cannot grow without a stock market.

The banking sector fears to give loans to manufacturing industries because the banks fear losing their saving capital. Once the stock market is active, the interest in banks will drop. But the stock market will grow faster, hand in hand with manufacturing.

I hope the establishment of an agricultural bank is realized soon. Ethiopia has an agrarian economy. But the economy is currently distorted, as the service sector constitutes the largest portion of the GDP. In a bid to transform Ethiopia’s economy from an agricultural to a manufacturing industry, agricultural development bank cannot be an alternative. Agriculture is not developing due to lack of finance, fundamentally.

The agricultural bank also needs an insurance firm, to cover the risks of the loans. The bank finances tractors for the farmer, and then the insurance firm insures the machines as well as the harvest. It is highly imperative that agricultural development bank and investment banks are essential for this country.

A secondary market cannot operate without an investment bank. Since we are nearing the establishment of a stock market, we also need to establish an investment bank.

For instance, banks are planned to be listed on the stock market. The investment banks will study the banks, as well as other IPOs, inside out. So, the investment banks determine the exact value of shares, and securities. This means IPOs, including commercial banks, cannot determine the price of their shares by themselves, unlike now.

The underwriter preserves the interest of every stakeholder, investor, IPOs, and others. It sets standard but the investment bank cannot be listed on the stock market itself.

Once the two working groups wrap up their studies, the documents will be reviewed by stakeholders. Then, we will present the final documents to the government to decide on whether to drop or implement the study’s recommendations.

A few years back, we travelled to Nigeria to visit their central bank and development bank and took three months of training. I was amazed by their Islamic insurance. We extracted lessons and brought it to Ethiopia.

The government is saying the banking industry will be opened for foreign competition very soon. What is your take on this?

Before, we have been asking the government to open the banking industry. But recently, we have changed our perspective. We prefer the government to delay the opening up for now. I precisely know the exact capacity of each local banking institution.

Before, our assumption was that local banks will merge, at the face of an open up. So we have been advocating for it to open, at each meeting and financial summits.

Basically, banking and insurance businesses in Ethiopia is a captive business. The banks are formed either under religious, ethnic, political sentiments or other bands. So, Ethiopian banks and insurance companies lack the business mentality. If they had a business mentality, they will work with anyone who has a viable business idea. So I believe the government must delay the sectors opening up.

The NBE recently said mandatory merger and acquisitions will be forced on local banks, when the sector is opened up.

That is inevitable once the industry is opened up. Of course mergers can happen even before the opening up. For instance, the NBE raised the paid up capital to five billion. Those who failed to meet will have no option but merge. The NBE can also raise the reserve let’s say to 25 percent, from the 10 percent currently. Many banks could have merged. This way, competitive banks could be created.

Western banks, especially Europeans, strongly pushed Malaysia, Korea, South Korea, and Thailand to open up their financial sector. Once these Asian countries opened their financial industries, the western banks withdrew after joining the sector. The Asian economies were hit by financial crisis as a result.

But eventually the Asian tigers avenged the western banks. The 2007 financial crisis hit western banks, because the Asian tigers suddenly raised their banking capital. They intentionally gave more loans to American banks. Then the American and European banks disbursed those loans to mortgage, and small businesses. The western banks failed to pay their loans to the Asian tigers, taking revenge twenty years after the western banks played foul.

We do not need such turf wars.

The only reason Ethiopia’s economy is doing well after the war in the past two years, is because our financial industry is closed off. Our economy survived because the banking sector is not open.

If banking was opened to foreign competition, the economy could collapse, under this war. And had it been opened before the war, the economy would have collapsed by now. Foreign banks simply close and leave, when there is a war.

Many people say the banking industry should be opened. That is wrong. They do not know the exact capacity of local banks in surviving foreign competition. I have no confidence even in the CBE.

The CBE has a huge NPL owed by the government. The government owes over half a trillion birr. Unless it is fully paid, CBE will face many challenges.

So, I insist the banking industry should not be opened at least in the next three to four years. Local banks need up to four years to prepare. Mandatory merger is simple.

When the Home Grown Economic Reform was launched in 2019, the government promised to reduce the states hand in the economy, and reduce the pressure on CBE and domestic credit. Is there any progress?

The CBE is not giving loans to the government now. State pressure is reduced. The CBE has studied new organizational structure, and is implementing new business strategies. Before, especially during the previous regime, state banks give loans as if it is a budget. They do not collect the loan.

Do you follow up on CBE’s branches abroad?

We evaluate them during reporting. The bank has branches in Juba and Djibouti. The Juba branch is performing very well but the Khartoum branch was suspended while in the pipeline.

Did the CBE move from PEHA’s supervision, after it is placed under the EIH?

Currently, the CBE is in transition process, from PEHA to the EIH.

I heard SOEs will be categorized under three supervisory institutions according to their performance. These are the EIH, PEHA, and the LAMC. Is that true?

What I know is that there are SOEs going to the EIH, and the rest will remain under PEHA. The LAMC by itself is an SOE and is under PEHA’s supervisory. LAMC is under my supervision. The CBE, DBE, EIH, LAMC and national lottery, are under my directorate.

The EIH has recently on-boarded 27 SOEs, out of the 36 SOEs under PEHA. Does that mean they are completely out of PEHA?

The investment part of SOEs goes to the EIH, while the enterprise management aspect remains under PEHA. But so far, there is no definite decision on whether the selected SOEs completely move to the EIH, or partially. This is decided by the macroeconomic team of the PM.

Will all SOEs be listed on the stock market?

The plan was for the SOEs to list a certain percent of their value on the stock market. If SOEs like ET, ethio telecom and others trade 10 percent of their portion on the stock market, it builds the public’s confidence. But SOEs must meet stringent financial reporting systems.

I also hear that five percent of ethio telecom’s share will be sold on the stock market. SOEs that meet the right financial reporting system will be able to float shares on the stock market.

People are facing difficulties acquiring houses because real estate companies collect money from house seekers and disappear. The stock market will also solve this. Everything will take shape under the secondary market.

The government is allowing the establishment of new banks in the last two years. But lately it confirmed the opening up of the banking sector for foreigners. Isn’t this sending mixed signal?

Mergers can be done at any time. Then local banks can consolidate and ready for competition. PEHA is exemplary in merging CBB with the CBE six years ago. Private Banks must follow suit.

Local banks are in a comfort zone, registering lump profit, not because they are providing a class service. They are profiting because they are protected. Under state protection, they do not have to improve service. They survive at the expense of the client. Millions are saving in bank but only a few thousand get loans. All of this will change, once foreign banks come.

To allow foreign banks, the banking proclamation, banking service code and the investment regulations must be revised. Especially, the code must allow banking for foreigners. The existing commercial code allows banking and insurance only for Ethiopians. Non Ethiopians cannot be investors, or operators.

Do you think the financial sector will be opened before five years?

I think so but I prefer it being delayed. All banks are giving loans to the service sector. Manufacturing and agriculture cannot grow unless we have banks that can give loans for long term projects. There are no consumer loans too.

Insurance companies complained over NBE’s order to direct 15 percent of their profit to DBE bond.

The rate has been reduced lately and the insurance companies agreed.

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Ethiopian Reporter, Political, Kibir Minister, Editorial….

Ethiopia Country Report Context

Key changes and developments in the newspaper marketplace in the past five years

According to the Ministry of Information, there were 68 newspapers and magazines published and distributed in July 2006. This is an increase from five years ago (though figures for 2000 could not be found). There are 56 newspapers and 12 magazines. Most papers are weeklies, bi-weeklies and monthlies, with only three dailies, all national, in existence. Many of the new papers in recent years have been tabloid weeklies responding to news events, such as the 2005 elections. However, some of these papers disappear when there are no strong news events to cover.

Newspaper in Ethiopia

Daily

Twice a week Weekly

Every two weeks Monthly

Source: Ministry of Information, personal communication, August 2006

The newspaper sector is limited by the country’s low literacy rates, and most titles are said to have small print runs of only about 3,000 copies. At the time of writing this report, no data could be sourced on the percentage of the adult population that reads a newspaper.

At national level, there are three daily newspapers (see Figure 8). The three national dailies are Addis Zemen (Amharic), The Ethiopian Herald (English) and the Monitor (English). The Monitor is the only private-owned daily. There is no information available to distinguish whether the remaining 53 newspapers are national or regional papers.

There are 12 national magazines; 10 published monthly, two published every two months, and two published quarterly. Ten of these magazines are in the Amharic language, and two are published in English, a monthly and a bi-monthly (Ministry of Information, personal communication, August 2006).

7.2 Investment and growth in newspapers in the past five years

There has been a significant increase in the number of papers in the past five years, with new privately-owned papers leading this growth.

However it is difficult to comment on the exact size of the newspaper market, as there is no research available in this area. Anecdotally, however, there was evidence of high demand for private papers during the May 2005 election period, but with a contraction in the number of private papers after the election.

Only a few of the newspapers, such as The Reporter (with Amharic and English editions, owned by the Media Communication Centre) and Addis Admass (in Amharic) are backed by strong private investment. Some papers have folded after not being strong enough to withstand challenges pertaining to legal or other matters. Some complain about delays in getting permits due to delay in finalisation of the provisions of the new Press Law. Another barrier to newspaper sector growth, according to the International Press Institute (IPI, 2005), has been the banning of some newspapers and the detention of journalists following the unrest after the May 2005 elections.

There is a state-owned news agency, Ethiopian News Agency, and a private local one, Walta Information Centre, both of which mainly serve the state media. Walta Information Centre is owned by the ruling party (EPRDF), so is categorised as state-owned in Figure 9. The private media do not have arrangements with these news agencies to provide them with the content they require, and this remains a major challenge for the private media. The other five news agencies operating in the country, such as Reuters and AFP, are all international.

State or government-owned/backed

Plurality, ownership and control

The private newspaper sector in Ethiopia is still very young and, because of lack of transparency around ownership, it is not known whether ownership is diverse or concentrated in a few hands. However, Kifle Mulat, president of the EFJA, states that all newspapers are under censorship and all are pro-government and controlled by the government (directly or indirectly) (K. Mulat, private communication, 1 September 2006). There is strong opposition to this view, however, from one Ethiopian editor and publisher, Mr Amare Aregawi, who argues that there is no censorship in the country because it is unconstitutional and illegal for the government to practice it.

The Minister of Information states that of the 56 newspapers currently being published, six are government-owned and 32 are privately-owned. The remaining papers are owned by Religious Organisations (8), Associations (6), Political Parties (3) and NGOs (1).

Of the 12 magazines published, 11 are privately-owned, while one is owned by a religious organisation (Ministry of Information, personal communication, August 2006).

Figure 10 below lists the 10 most-read newspapers. These papers can be classified into state, private and party papers. Addis Zemen is a daily state paper. Netsanet, Addis Admas, Ethiop, Askual, Minilik and Ethiosport are private weeklies. Party weekly papers include Oromiya, Abyotawi Dimkrasi and Woyin.

The number of newspaper readers is generally thought to be quite low, and there could be several reasons for this. First, it is possible that the culture of reading has not been properly cultivated, despite the fact that literacy has been increasing over the past few years. Another possible reason is that, in the case of the private newspapers, they cannot afford to distribute beyond the capital Addis Ababa, due to both financial and infrastructural constraints.

Newspaper Netsanet Oromiya

Abiotawi Democracy

Addis Admas Ethiop Asmat Minilik

Addis Zemen Woyin Ethiosport

Percentage

Source: Ministry of Information, personal communication, August 2006

7.4 Diversity

The past five years has seen an increase in the plurality of ideas found in newspapers. For instance, there is frequent newspaper coverage of women’s and religious issues, with some papers even published by religious institutions. Private newspapers provide more entertainment coverage than the government ones do.

The majority of the newspapers are in the Amharic language (33), and the second most common language is English (14). There are also several bi-lingual newspapers, publishing in both Amharic and English (5), and there is one newspaper that publishes in Amharic, English and French. There are also newspapers written in Oromifa (2), Tigrinya (1) and Arabic (1). (Ministry of Information, personal communication, August 2006). One interviewee expressed the need for further objective research to obtain more accurate data on readership.

7.5 Quality of newspaper reporting

With the great increase in the number of papers, there has also been an increase in journalistic work. The quality of journalism is highly uneven. Whilst some commentators describe work as lacking in ethics, independence and professionalism, others assert that concerted efforts are being made by journalists to improve standards in the sector.

7.6 Specific challenges

Challenges faced by newspapers in Ethiopia include low reading levels, the high cost of distribution outside the capital Addis Ababa, and a lack of professional journalists.

Key findings

The past five years have seen increased private sector participation in the press sector, but many of the private papers are not financially strong.

The largest group of publications is the national weeklies.

The panoply of challenges facing Ethiopia and its people show no sign of respite. Though active hostilities in the northern part of the country, have almost stopped after the forces of Tigray People’s Liberation Front (TPLF) were pushed back to Tigray from most of the territories they had captured in the adjoining Amhara and Afar regions, the security situation in a number of areas of the nation is fragile owing to the interminable endless cycle of violence that has been racking them for years now. Aside from the death of tens of thousands and the displacement of millions frequent outbreaks of internecine conflicts have led to, the unchecked rise in extremist attitudes, the cost of living, corruption, and land grabbing, among others, have made life an ordeal for the vast majority of Ethiopians. It’s in this backdrop that an incident, whose fallout could potentially plunge Ethiopia into a crisis of catastrophic proportions, recently took place.

On March 29 at least 26 people were killed and several more injured in clashes between armed groups hailing from the Minjar Shenkora Woreda of North Shewa Zone, Amhara regional state, and local militia in the bordering Fentalle woreda, East Shewa Zone of Oromia regional state. The blame game began soon thereafter with both sides issuing conflicting a slew of contradicting statements regarding the incident. Amhara region officials lay the blame on “anti-peace groups” whom they accused of perpetrating the attack. Their counterparts from the Oromia region though disputed the accusation, blaming the attack on “extremist forces operating in the Amhara region”. They also took these forces to task for displacing people and looting property in other woredas of Oromia bordering the Amhara region. It’s surprising that both the federal government and the ruling Prosperity Party (PP) have not made any overt attempt to defuse the tension between the Amhara and Oromia regional administrations even as both escalate the war of words among them.

Ethiopia is a nation that continues to be on the wrong side of the global digital divide. Only a fifth of its over 110 million people have Internet access that is expensive and often unreliable. In cognizance of the imperative to tackle the multi-faceted challenges this poses the government has embarked on liberalizing the telecom sector and adopted Digital Ethiopia 2025— a digital transformation strategy described by the government as a visionary strategy that serves as a blueprint for different sectors and institutions—as it tries to position the country competitive in the brave new digital world. Efforts to open up the telecom industry have had limited success with one international consortium awarded a license to operate telecom services in the country so far while plans to sell 45 percent of the state-owned telecoms monopoly to international buyers have been repeatedly pushed back. Meanwhile, a number of public services have begun to benefit from Digital 2025 through developments like e-government, digital ID, the national payment system, online trade registration and licensing system, electronic single-window customs clearance and electronic tax filing.

As the government ramps up its roll out of various services aligned with the digital transformation strategy, the suspension by the National Bank of Ethiopia (NBE) of digital remittance platforms, namely CashGo and MamaPay, the Bank of Abyssinia (BoA) uses has caused a furore, leading many to question whether the central bank is on the same page as the government in the latter’s quest to create an inclusive digital economy through the national digital strategy. CashGo is an international money transfer system which allows anyone abroad to transfer funds in the local currency to accounts maintained at BoA while MamaPays allows users to request payment from remitters or payment to be settled on behalf of a third party. The reasons cited by NBE to justify its decision are varied. It says both BoA and the developers of the applications behind the platforms do not possess a valid license permitting them to provide remittance services. It also alleges that the applications enable BoA to avail travelers foreign exchange through credit cards in disregard of its regulatory mandate over currency management. The regulator further raised the need to address safety and security concerns, particularly relating to privacy breaches, and ensure that local fintech companies survive the inevitable competition from foreign rivals via a major initiative currently in the works.

The developers of the applications, however, refute the points mentioned by the central bank. They argue that they are authorized fintech companies engaged in developing applications and as such do not require to have a remittance license, adding the applications were vetted by the NBE and the Information Network Security Agency before they were integrated into BoA’s system. They also suspect that foul play may be involved, saying some of the remittance companies active in the Ethiopian market probably conspired with regulators at NBE to close them down because the country would save up to USD 800 million it annually lost to them through steep service charges and redirection of the forex they receive to informal channels. Moreover, they point out that NBE’s compliance and safety concerns could have been worked out while the applications were still running.

While NBE may have grounds it deems legitimate and warrants the suspension of the operation of the digital remittance platforms, its decision is heavy-handed and lacks foresight. In the first place, it did not hold formal consultations on the matter with all the stakeholders involved. If it had demonstrated the willingness to engage them constructively, the dispute between the parties could have been amicably solved. The decision also discourages fintech companies from investing in the development of platforms that help Ethiopia bridge the digital divide. The Digital 2025 strategy aspires to transform Ethiopia’s digital landscape to accomplish such lofty goals as playing a vital role for inclusive prosperity; innovating and applying the culture, practices, processes and technologies of the digital era to respond to citizens raised expectations. The realization of the strategy requires, among others, the collaboration and commitment of everyone including government, non-governmental, development partners and societies as well as a robust commitment to increase infrastructure and put in place an enabling ecosystem. If the government is to succeed in pushing the country through digitalization and making it a viable investment depends on its dedication to reforming the bureaucracy, implementing the right regulation and creating credible institutions. As Prime Minister Abiy Ahmed (PhD) once said leveraging digital opportunities demands a new mindset and leadership style. Leaders at the central bank must take this advice to heart and adapt to the new digital environment.

The feuding between officials heading two branches of the ruling party cannot be confined to them given the party is still ethno-centric despite claiming to be a national party. In fact it has led to spats among major opposition parties active in the respective regions and social media activists, which are spewing a hateful rhetoric that could very well pit the Oromo and Amhara people, the two largest ethnic groups in Ethiopia, in a bloody conflict. The consequences of such a conflict are too horrible to contemplate. From a protracted and destructive civil war in which no side emerges victorious to a total state collapse all the scenarios facing the nation are lose-lose not only for its citizens, but also the Horn of Africa and beyond. It’s not entirely clear whether the protagonists to the ongoing verbal warfare realize that their actions are liable to lead to Ethiopia’s unraveling or are indifferent to the ensuing heavy price.

With three decades of experience in the banking industry, Mulugeta Asmare is known for his successful years at the Bank of Abyssinia. During his five year tenure as the president of the Bank until 2019, the Bank’s profit doubled to over half a billion birr, while its paid-up capital skyrocketed from a little less than one billion birr to 2.5 billion birr.

Last year, he was appointed as the president of Goh Bank, the first self-proclaimed mortgage bank in Ethiopia. The Reporter’s Selamawit Mengesha sat down with Mulugeta to learn about his new journey at Goh and his insights in the banking industry. Excerpts:

The Reporter: Tell us about your experience in the banking industry.

Mulugeta Asmare: I have been working in the bank industry for the past 31 years. I have an all-round experience in the banking industry, meaning I had started work in the banking sector as a clerk and have now reached the position of general manager. I have worked as deputy president of Abyssinia Bank for four years-and-a-half until 2019. I believe that I was able to make a lot of reforms and changes while working at Abyssinia Bank. I was faced with a lot of challenges while working at this bank, since it had a lot of shortcomings at the time.

I believe that I have contributed a lot towards the betterment of the banking system at Abyssinia Bank, for it to get to the stage that it is in now. We started off by inviting global market leaders like Deloitte, PWC, KPMG, and Ernest & Young to participate in a bid to frame a five-year strategy for the bank. Winning the bid, Ernest & Young have done a remarkable job in improving our system-wide operations. We used to have such work done by in-house experts. So, this is the first time that we enlisted the services of a globally renowned company. We have focused on manpower development and raising pay, measures that have surely contributed to the development of the bank.

Following my previous stint with Abyssinia Bank, I used to focus on private contractual jobs here and there. I was informed of this new concept of establishing a mortgage bank system which was unique and different, and it got my attention. After establishing the bank and selling the shares and raising enough capital to establish the bank, we couldn’t find the right person to run it. The 11 founding members are well-known business professionals that have worked for years in the banking system, and they wanted me to take the role. I couldn’t say no to such noted personalities as former National Bank President Getahun Nana.

Before delving into the mortgage bank, I would like to raise a question regarding saving. Most people open bank accounts for saving purposes while few dare to ask for loans. Why do you think that is the case?

The major mission of a bank is to help develop the culture of saving. It is evident that once there is a saving, the next step is to provide a loan. Without savings, there are no loans. Customers can resort to saving for they have some future plans to invest or to purchase something, or it can just be a leftover from their monthly expenses. This saving is directly forwarded to producers and service providers who are planning to expand a business, or who are looking forward to enter into new business ventures. The main job of a bank is to act as an intermediary between the depositor and the borrower.

Banks have advanced and sophisticated role nowadays compared to the old times. I believe that low-scale savings at the banks is the main reason for the small number of loans. The loans are mostly provided to customers that have a convincing project idea with a guaranteed profit. You don’t find such projects every day, not everyone can be a producer, a service provider or a farmer. Banks have a limited access to capital and deposit, which is the reason for setting strict criteria. These are some of the reasons for having more savings while there are less loans being provided.

The last three years have seen a remarkable change in the banking sector. The number of private banks has increased to 23, including Goh Betoch Bank, which is managed by you, and an interesting enterprise at that. Why do you think private banks are increasing at such a pace? Is it because the banking industry is profitable?

It is obvious that the banking industry is becoming more profitable today than ever. All banks are recording a profit since the market demands such service. Even though our economy is underdeveloped, the banking sector is essential to reach the population that is not getting access to the service. Until recently, only 25 percent of the population was banked. But that is changing thanks to the increasing number of banks and the opening of branches in the regions. This shows that the market is still untapped. That being said, the capital requirement to establish a bank is also increasing drastically. The set of criteria laid down by the National Bank is complex. Therefore, I don’t believe that we have banks mushrooming left and right. For a population of 110 million, the number of banks we have is far from enough. I think the main challenge for potential new banks forming is the rules set by the central bank. Allowing specialized banks to open branches in the country is not yet a trend but it’s a must. We have paved the way as a mortgage bank but there can be many others that specialize in farming, industry, housing, import and export, etc.

Goh Bank specializes in the housing sector. I’m sure you’ve conducted a thorough research before establishing the bank, including the case of the then Construction and Business Bank. What is the sustainability plan?

The Construction and Business Bank has its own flaws. During the reign of the Derg, it was taken over by the government and it was functioning under the name of Housing and Savings Bank, the only service provider specializing in mortgage banking. It was later on transformed into a commercial banking system and was named as “Construction and Business Bank.” Keep in mind that both the Constriction and Business Bank and Commercial Bank were providing the same traditional banking service under a different name. The bank didn’t have enough capital. Therefore, it has struggled to keep in the same pace as private banks. The Construction and Business Bank later on merged with the Commercial Bank since it couldn’t stand on its own. This has caused a gap in the mortgage banking system. It provides a service that is in high demand. That is the main reason for establishing the Goh Betoch Bank with a view to addressing the problem. A lot of customers have savings in their account that is not enough to purchase a house without bank financing. These people can opt to switch funds used to rent a house in favor of mortgage payments.

Does the bank provide mortgage service or does it focus on commercial services?

The bank purely provides mortgage services. It is also registered with the national bank as a provider of mortgage services. We are the first bank in Ethiopia to offer this service. We have done rigorous feasibility studies. We haven’t provided any commercial loans to businesses. We only give loans to customers who want to buy a house.

Is there a push from the government to make the service partially commercial?

Actually, we are the ones pushing. That is since the country doesn’t have laws regulating such a specialized banking system. According to the law in the books, all banks are treated equally, be they private or government. But we are demanding a special treatment, and the national bank has lately been cognizant of this fact.

Do you cater to folks lower in the socio-economic ladder, and can you also reflect on the high cost of housing in Ethiopia?

It would take days to discuss issues regarding housing. In Ethiopia, there are many programs that were drafted in order to provide solution to these problems. For instance, the Integrated Housing Development Program was developed by the government in 1997. This condominium-housing project was later on developed into the ‘40/60’ housing. The idea was to construct a lot of housing units and help the general public own their house. A mere 400,000 housing units have so far been built. Many Ethiopians have been into the culture of housing saving schemes for years now. There is a study indicating that 400,000 housing units needed to be built every year in order to meet demand in Ethiopia. Specifically, 100,000 housing units should be constructed in Addis Ababa every year, but a tenth of that is being accomplished.

What is more, the already existing houses in Ethiopia do not meet habitat standards established by the United Nations. Based on this requirement, around 74 percent of the housing units in Addis Ababa need to be reconstructed since they do not meet the standard. The main reason for the soaring price of houses is the ever rising cost of land as well as construction materials. The paucity of hard currency coupled with unbridled inflation has worsened the situation. The current going rate for a housing unit is beyond the reach of middle and lower income citizens.

According to our study, medium income is 30,000 and up, way below the threshold to afford buying a new house. We should also look into our construction system that is backward and traditional. It takes two to three years to build a house. Time is essential; we should be able to construct houses in one year. If we want housing to be affordable, we should look into ways of cutting down the price of land and construction inputs as well as employing modern technology. Financing should also be factored in, and this is where we come in.

Apart from huge outlays by private banks, the government is also spending 50 to 60 million birr to construct condominiums. These houses are designed to be affordable to low-income people, but that’s not the case. How does your bank intend to make housing affordable to middle- or low-income citizens?

The housing problem can’t be solved only by private banks. The main role should be played by the government since having shelter is a human right. The government being a responsible body should provide land at a lower price or for free to the lower and medium income people. What’s more, the government should regulate the price of construction materials besides encouraging their ample supply. Banks as financers should also expedite provision of capital in the form of loans.

Most banks are reluctant to engage in mortgage banking. How come you chose it?

We dared to join the banking sector, especially mortgage financing, because of the need for one on the market. Our shareholders took the initiative to establish a huge institution that can support the country’s economy. The realty on the ground in Ethiopia is such that a 40-year-old individual lives with his or her parents. This is so due to the dearth of financing schemes to own one’s house. Therefore, we are trying to help individuals with limited means.

What is the plan this year as regards providing mortgage loans for customers?

We have started business since October 25. We haven’t provided much service because we just launched our bank a few months ago. But we are planning to provide one billion birr in loans until the end of the year. Based on the outlook of the economy, this might not be attainable, but that’s the plan.

How much would that be per client?

It depends on the customer. Some might take a 10 million-birr loan while others ask for more. Anyways, we are planning to provide 1 billion birr in loans until the end of this year. While framing this plan, we were under the impression that we can go around the country and find deposits, but there were many unforeseen events such as the war that disrupted the economy. Therefore, we might not be able to meet the target.

So there is no plan to provide this service to other regions?

We will cover other regions as well. We might not have many branches like other banks but being a mortgage bank, we are going to employ technology to scale up services. The main branch is in Addis Ababa while the second branch is in Dire Dawa and the third branch is around Lebu. The fourth branch in the CMC area goes online this month. We serve cities that have a high housing demand such as Hawassa, Adama, Bahir Dar,Gonder and Mekelle.

What do you think of foreign banks establishing mortgage banks in Ethiopia? How would they affect the already existing mortgage market?

Although I’m aware that foreign banks are joining, the timeline is not yet announced. A healthy competition is not bad; I don’t believe that they will take over the banking business instantly. The government will surely have some sort of plan in order to institute a gradual change. Some requirements might also be in order such as a fixed amount of capital. They should purchase shares to be able to establish a bank in Ethiopia. For instance, if a foreign bank buys 30 to 40 percent share from a private bank, then it will be perfect since they can invest in human-resource development and bring in capital for the existing bank.

Mortgage bank is no different from other private banks; I believe that foreign banks can help a lot since there is an untapped market. We can assist them in expediting the process of setting up shop. If foreign banks buy shares from us, then they can avoid that hustle. We would like the competition, although we are not sure when they can come to the market; we are preparing psychologically to work with them.

Can you briefly explain what it takes to get mortgage?

Those who seek loan at our bank, we welcome them all. We have started giving service for most customers now. It is required for the customer to save a minimum of 20 percent of the selling price of the house at our bank. And then, we can provide the remainder 80 percent. The other unique system is that we will provide 30 years grace period for paying the loan back to the bank. Our interest rate is lower than other banks’. For instance, Commercial Bank provides loans at 15 to 26 percent rate while we can provide loans for less. Our interest rate is flexible depending on the currency and frequency that a customer would return the loan. This makes us unique.

Customers can’t knock on any private bank and ask for a loan to purchase a house. Most banks provide a mortgage service to their employees, or for selected VIP customers that pay in foreign currency such as embassies, NGOs and exporting companies. We only require that a customer has a fixed monthly salary and that he or she can pay the loan back at the provided timeline. There’s also no need for any collateral since we use the house that will be purchased as collateral by itself. We are trying to reach the public with this information to mitigate the housing problem.

Since the public is very eager to get this service, what can we expect from your bank?

We would like to pass the message that any customer that has the financial means and the interest to purchase or construct a house, we are eager to help. Come to our bank, open a bank account and save the minimum amount of money required for purchasing the house that you want to have. We will advise you on the best option. We are also planning to construct houses by ourselves.

With three decades of experience in the banking industry, Mulugeta Asmare is known for his successful years at the Bank of Abyssinia. During his five year tenure as the president of the Bank until 2019, the Bank’s profit doubled to over half a billion birr, while its paid-up capital skyrocketed from a little less than one billion birr to 2.5 billion birr.

Last year, he was appointed as the president of Goh Bank, the first self-proclaimed mortgage bank in Ethiopia. The Reporter’s Selamawit Mengesha sat down with Mulugeta to learn about his new journey at Goh and his insights in the banking industry. Excerpts:

The Reporter: Tell us about your experience in the banking industry.

Mulugeta Asmare: I have been working in the bank industry for the past 31 years. I have an all-round experience in the banking industry, meaning I had started work in the banking sector as a clerk and have now reached the position of general manager. I have worked as deputy president of Abyssinia Bank for four years-and-a-half until 2019. I believe that I was able to make a lot of reforms and changes while working at Abyssinia Bank. I was faced with a lot of challenges while working at this bank, since it had a lot of shortcomings at the time.

I believe that I have contributed a lot towards the betterment of the banking system at Abyssinia Bank, for it to get to the stage that it is in now. We started off by inviting global market leaders like Deloitte, PWC, KPMG, and Ernest & Young to participate in a bid to frame a five-year strategy for the bank. Winning the bid, Ernest & Young have done a remarkable job in improving our system-wide operations. We used to have such work done by in-house experts. So, this is the first time that we enlisted the services of a globally renowned company. We have focused on manpower development and raising pay, measures that have surely contributed to the development of the bank.

Following my previous stint with Abyssinia Bank, I used to focus on private contractual jobs here and there. I was informed of this new concept of establishing a mortgage bank system which was unique and different, and it got my attention. After establishing the bank and selling the shares and raising enough capital to establish the bank, we couldn’t find the right person to run it. The 11 founding members are well-known business professionals that have worked for years in the banking system, and they wanted me to take the role. I couldn’t say no to such noted personalities as former National Bank President Getahun Nana.

Before delving into the mortgage bank, I would like to raise a question regarding saving. Most people open bank accounts for saving purposes while few dare to ask for loans. Why do you think that is the case?

The major mission of a bank is to help develop the culture of saving. It is evident that once there is a saving, the next step is to provide a loan. Without savings, there are no loans. Customers can resort to saving for they have some future plans to invest or to purchase something, or it can just be a leftover from their monthly expenses. This saving is directly forwarded to producers and service providers who are planning to expand a business, or who are looking forward to enter into new business ventures. The main job of a bank is to act as an intermediary between the depositor and the borrower.

Banks have advanced and sophisticated role nowadays compared to the old times. I believe that low-scale savings at the banks is the main reason for the small number of loans. The loans are mostly provided to customers that have a convincing project idea with a guaranteed profit. You don’t find such projects every day, not everyone can be a producer, a service provider or a farmer. Banks have a limited access to capital and deposit, which is the reason for setting strict criteria. These are some of the reasons for having more savings while there are less loans being provided.

The last three years have seen a remarkable change in the banking sector. The number of private banks has increased to 23, including Goh Betoch Bank, which is managed by you, and an interesting enterprise at that. Why do you think private banks are increasing at such a pace? Is it because the banking industry is profitable?

It is obvious that the banking industry is becoming more profitable today than ever. All banks are recording a profit since the market demands such service. Even though our economy is underdeveloped, the banking sector is essential to reach the population that is not getting access to the service. Until recently, only 25 percent of the population was banked. But that is changing thanks to the increasing number of banks and the opening of branches in the regions. This shows that the market is still untapped. That being said, the capital requirement to establish a bank is also increasing drastically. The set of criteria laid down by the National Bank is complex. Therefore, I don’t believe that we have banks mushrooming left and right. For a population of 110 million, the number of banks we have is far from enough. I think the main challenge for potential new banks forming is the rules set by the central bank. Allowing specialized banks to open branches in the country is not yet a trend but it’s a must. We have paved the way as a mortgage bank but there can be many others that specialize in farming, industry, housing, import and export, etc.

Goh Bank specializes in the housing sector. I’m sure you’ve conducted a thorough research before establishing the bank, including the case of the then Construction and Business Bank. What is the sustainability plan?

The Construction and Business Bank has its own flaws. During the reign of the Derg, it was taken over by the government and it was functioning under the name of Housing and Savings Bank, the only service provider specializing in mortgage banking. It was later on transformed into a commercial banking system and was named as “Construction and Business Bank.” Keep in mind that both the Constriction and Business Bank and Commercial Bank were providing the same traditional banking service under a different name. The bank didn’t have enough capital. Therefore, it has struggled to keep in the same pace as private banks. The Construction and Business Bank later on merged with the Commercial Bank since it couldn’t stand on its own. This has caused a gap in the mortgage banking system. It provides a service that is in high demand. That is the main reason for establishing the Goh Betoch Bank with a view to addressing the problem. A lot of customers have savings in their account that is not enough to purchase a house without bank financing. These people can opt to switch funds used to rent a house in favor of mortgage payments.

Does the bank provide mortgage service or does it focus on commercial services?

The bank purely provides mortgage services. It is also registered with the national bank as a provider of mortgage services. We are the first bank in Ethiopia to offer this service. We have done rigorous feasibility studies. We haven’t provided any commercial loans to businesses. We only give loans to customers who want to buy a house.

Is there a push from the government to make the service partially commercial?

Actually, we are the ones pushing. That is since the country doesn’t have laws regulating such a specialized banking system. According to the law in the books, all banks are treated equally, be they private or government. But we are demanding a special treatment, and the national bank has lately been cognizant of this fact.

Do you cater to folks lower in the socio-economic ladder, and can you also reflect on the high cost of housing in Ethiopia?

It would take days to discuss issues regarding housing. In Ethiopia, there are many programs that were drafted in order to provide solution to these problems. For instance, the Integrated Housing Development Program was developed by the government in 1997. This condominium-housing project was later on developed into the ‘40/60’ housing. The idea was to construct a lot of housing units and help the general public own their house. A mere 400,000 housing units have so far been built. Many Ethiopians have been into the culture of housing saving schemes for years now. There is a study indicating that 400,000 housing units needed to be built every year in order to meet demand in Ethiopia. Specifically, 100,000 housing units should be constructed in Addis Ababa every year, but a tenth of that is being accomplished.

What is more, the already existing houses in Ethiopia do not meet habitat standards established by the United Nations. Based on this requirement, around 74 percent of the housing units in Addis Ababa need to be reconstructed since they do not meet the standard. The main reason for the soaring price of houses is the ever rising cost of land as well as construction materials. The paucity of hard currency coupled with unbridled inflation has worsened the situation. The current going rate for a housing unit is beyond the reach of middle and lower income citizens.

According to our study, medium income is 30,000 and up, way below the threshold to afford buying a new house. We should also look into our construction system that is backward and traditional. It takes two to three years to build a house. Time is essential; we should be able to construct houses in one year. If we want housing to be affordable, we should look into ways of cutting down the price of land and construction inputs as well as employing modern technology. Financing should also be factored in, and this is where we come in.

Apart from huge outlays by private banks, the government is also spending 50 to 60 million birr to construct condominiums. These houses are designed to be affordable to low-income people, but that’s not the case. How does your bank intend to make housing affordable to middle- or low-income citizens?

The housing problem can’t be solved only by private banks. The main role should be played by the government since having shelter is a human right. The government being a responsible body should provide land at a lower price or for free to the lower and medium income people. What’s more, the government should regulate the price of construction materials besides encouraging their ample supply. Banks as financers should also expedite provision of capital in the form of loans.

Most banks are reluctant to engage in mortgage banking. How come you chose it?

We dared to join the banking sector, especially mortgage financing, because of the need for one on the market. Our shareholders took the initiative to establish a huge institution that can support the country’s economy. The realty on the ground in Ethiopia is such that a 40-year-old individual lives with his or her parents. This is so due to the dearth of financing schemes to own one’s house. Therefore, we are trying to help individuals with limited means.

What is the plan this year as regards providing mortgage loans for customers?

We have started business since October 25. We haven’t provided much service because we just launched our bank a few months ago. But we are planning to provide one billion birr in loans until the end of the year. Based on the outlook of the economy, this might not be attainable, but that’s the plan.

How much would that be per client?

It depends on the customer. Some might take a 10 million-birr loan while others ask for more. Anyways, we are planning to provide 1 billion birr in loans until the end of this year. While framing this plan, we were under the impression that we can go around the country and find deposits, but there were many unforeseen events such as the war that disrupted the economy. Therefore, we might not be able to meet the target.

So there is no plan to provide this service to other regions?

We will cover other regions as well. We might not have many branches like other banks but being a mortgage bank, we are going to employ technology to scale up services. The main branch is in Addis Ababa while the second branch is in Dire Dawa and the third branch is around Lebu. The fourth branch in the CMC area goes online this month. We serve cities that have a high housing demand such as Hawassa, Adama, Bahir Dar,Gonder and Mekelle.

What do you think of foreign banks establishing mortgage banks in Ethiopia? How would they affect the already existing mortgage market?

Although I’m aware that foreign banks are joining, the timeline is not yet announced. A healthy competition is not bad; I don’t believe that they will take over the banking business instantly. The government will surely have some sort of plan in order to institute a gradual change. Some requirements might also be in order such as a fixed amount of capital. They should purchase shares to be able to establish a bank in Ethiopia. For instance, if a foreign bank buys 30 to 40 percent share from a private bank, then it will be perfect since they can invest in human-resource development and bring in capital for the existing bank.

Mortgage bank is no different from other private banks; I believe that foreign banks can help a lot since there is an untapped market. We can assist them in expediting the process of setting up shop. If foreign banks buy shares from us, then they can avoid that hustle. We would like the competition, although we are not sure when they can come to the market; we are preparing psychologically to work with them.

Can you briefly explain what it takes to get mortgage?

Those who seek loan at our bank, we welcome them all. We have started giving service for most customers now. It is required for the customer to save a minimum of 20 percent of the selling price of the house at our bank. And then, we can provide the remainder 80 percent. The other unique system is that we will provide 30 years grace period for paying the loan back to the bank. Our interest rate is lower than other banks’. For instance, Commercial Bank provides loans at 15 to 26 percent rate while we can provide loans for less. Our interest rate is flexible depending on the currency and frequency that a customer would return the loan. This makes us unique.

Customers can’t knock on any private bank and ask for a loan to purchase a house. Most banks provide a mortgage service to their employees, or for selected VIP customers that pay in foreign currency such as embassies, NGOs and exporting companies. We only require that a customer has a fixed monthly salary and that he or she can pay the loan back at the provided timeline. There’s also no need for any collateral since we use the house that will be purchased as collateral by itself. We are trying to reach the public with this information to mitigate the housing problem.

Since the public is very eager to get this service, what can we expect from your bank?

We would like to pass the message that any customer that has the financial means and the interest to purchase or construct a house, we are eager to help. Come to our bank, open a bank account and save the minimum amount of money required for purchasing the house that you want to have. We will advise you on the best option. We are also planning to construct houses by ourselves.

Shewit Emanuel is the current country director of Farm Africa, an international NGO established 35 years ago. It started out in Kenya but has branched out to Ethiopia, Uganda, Tanzania and the DRC.

Active in majority of eastern African countries, it is a specialized NGO focusing on natural resource management and business development linked to agriculture including livestock. Yosthena Aynalem of The Reporter sat down with Shewit to discuss smart agriculture in Ethiopia. Excerpts:

The Reporter: In a country where agriculture dominates, what would you say you have achieved thus far?

Shewit Emanuel: In a nutshell, one of the biggest achievements so far is that we exclusively work with smallholder farmers. What we are trying to do is to ultimately enable them to move out from poverty and become a commercial farmer who is self-sufficient.

Developing methodologies that are sustainable, inclusive and impactful is also one of our achievements. That’s our own target at the end of the day, when we leave, we want to make sure the work continues and the farmers continue to thrive with the support that we have started.

We operate all over Ethiopia. Unfortunately, some of the projects have ended in some regions, but we have footprints across all the regions within Ethiopia. The biggest achievement starts from increasing the income of the smallholder farmers we supported to reducing deforestation as well as supporting Ethiopia sell carbon credit to the international market. That is actually the newest achievement. We have also supported farmers to sell coffee directly to international markets.

Since vertical intégration is allowed now, farmers don’t have to go to the Ethiopian Ccommodities Exchange (ECX) anymore. If you can connect them with exporters, they can directly sell to the international market. The whole point is to reduce the middle men for the farmers and get the fairest prices for them.

Food insecurity is a recurring problem in Ethiopia and Africa. Many approaches have been applied to reduce food insecurity but nothing seems to avert it thus far. Is there any approach you have tried that is poised to be successful?

Nowadays, everybody’s moving into climate smart agriculture and unless all your interventions are becoming climate smart, you are bound to go back to that vicious cycle of droughts and flooding; which is both damaging to farmers. So, making sure farmers practice climate smart agriculture is the number one thing that we are working on.

One of the things that Farm Africa is actually pioneering and becoming innovative and a champion of is the use of integrated landscape management. This means to look at the challenge holistically, you cannot talk about conservation of land without talking about the livelihood of the people.

The majority of past projects, if you look at them, are about conservation without addressing why the community is damaging the environment? Unless you tackle that, you are not going to sustain it and all your efforts will be for nothing.

It also has to be inclusive of everybody. Most of the time, when a project starts, they focus on the direct beneficiaries. Let me give you a good example. One of our biggest projects is in Bale Eco region, where we’ve been operating since 2016. Initially, we were focusing on the regions communities and when the current drought occurred, the lowland communities came looking for water and resources towards the forest. So, all the conservation that we made, all the protection of the forest become under threat.

So, what we tried to do is expand our support, with the support from the Norwegians and other likeminded donors. It is not just the highland communities, but the lowlands are also included now. We have somewhat built resilience so that they don’t have to come to the forest.

And to be fair, even though 1.6 million people live within Bale, as direct beneficiaries, 12 million people depend directly on the forest. So, to address their need, everything from livestock fodder and irrigation is being provided, moving them into climate smart agriculture to become sustainable. They then become the protectors of the forest themselves, becoming part of the solution.

The approach we advocate for is an integrated landscape management where you can make your intervention impactful, sustainable and more importantly, inclusive of everybody, including women, pastoralists and nomads.

Does Farm Africa give lessons to these people or just resources?

Not exactly. When I say climate smart agriculture, there are different kinds of approaches that we use. Starting from the training itself such as when to plant, how to plant and what type to plant, and everything that has to do with linking farmers is included.

It could be providing improved seeds or making sure that they move to organic fertilizers or connect them to the local market. The majority of farmers’ problem is linkage; they just need to be connected with the agro-dealers so they can get the seed, fertilizers, and safe deliver of their harvests to the market. And once they produce, they can aggregate it and sell it at a good price.

We also support the enabling environment, which means working with the government to make sure that the necessary policies and protection are there. At the end of the day, we need to build the capacity of the government. They are the ones we are making sure we align with, since they will take it forward. We can show it on a small scale for the government to expand it at a larger scale.

The climate smart market systems project in Amhara region that we piloted, is now being rolled out to all over Ethiopia, modified depending on the region and soil conditions. The value chain may be different, but in terms of supporting the full spectrum of the value chain, that’s what we do, so that farmers have the right tools and information on a timely basis.

Urban farming is something that is said will reduce food insecurity and that you are doing something along those lines. Can you tell me more about those projects?

Sure. When Farm Africa was actually set up, our attention was exclusively focused on rural farmers, but what has become very clear is that you cannot address the rural challenges if you are not addressing urban challenges.

Urban poverty is on the rise and food insecurity is becoming as critical as those in rural areas.

The government requested us to support them on how to improve urban agriculture. With that, we started to pilot a project in the Ministery of Planning and Development’s compound because they have the space. We have started testing out the pilot phase, trying to look at what urban agriculture looks like, if it is sustainable, and how the farming methodology works.

We are now actually setting up; the clearing has been done and the design has been finalized. We are left with the planting processes, and we hope in the next couple of months to have the first produce available. It’s not just crops we are producing. We are also piloting fish as well as poultry so that everybody can practice it.

If you were to go to rural areas, there is space, you can do horizontal farming, but in urban areas, we don’t have that space. However, vertical agriculture is the answer. We are coming up with new kinds of innovative ways to produce food at a scale that is required to feed the local community. We are working with around 105 households for now, including women and unemployed youth. We just started that this year. So, it’s still at the early stages.

So what can urban settlers do? Like you said, these projects will encourage them, but considering there’s inflation now, there’s even more food insecurity, which is compounded by the war.

That’s why we encourage the use of your back backyard or whatever space you have. It does not require space. What we are trying to show is that you can do this vertical farming. Within a limited space, you can actually produce enough, to feed your family at a lower cost because inflation is becoming an issue. Families are barely feeding themselves, so at least it supplements their food intake and more importantly ensures nutritional balance.

Scholars suggest encouraging farmers to diversify their source of income to fight food insecurity. One of the options is to promote off-farming activities. Is that being implemented? If so, is it working?

Unfortunately, this concerns the lack of knowledge. The diversity is not as much as you would expect it to be. As part of the business development, we exclusively focus on income generating activities that you can do beyond agriculture. You need to diversify.

The coffee producers used to only produce coffee and farm forests. So, instead of farming the forest and cutting down trees, we showed them they can do forest honey, forest coffee, incense and other products, helping them to diversify their income stream.

A lot of the evaluation reports can be shared on, for instance, income. We increased their income by 143 percent. Not only were they able to increase the volume but also the quality. Now, almost all our projects, be it in Bale or Illu Aba Bora, all of them are now 100 percent export quality standard. And by supporting them change into a cooperative, they could buy better machines and so on, to aid in the quality of the product, instead of using traditional means and do less damage to the product. The coffee they produce now has scaled from grade six to grade one.

But you need to provide them the option and training, ranging from the know-how, all the way to even financial literacy. We do a lot of voluntary saving and loans, by setting them up with associations so that they are able to save money and get loans to buy better inputs and be able to negotiate better with dealers.

Ethiopia has been hit by a drought recently and many cattle have died as a result. There are other east African countries going through the same thing, probably in countries Farm Africa is involved in. So why do you think countries like Ethiopia are being affected by these things more often than the rest of the world?

Unfortunately, we are still rainfall dependent and one of the biggest impacts of climate change is making this cycle of drought more frequent than ever before. It used to occur every 10 years or so but now it happens every two or three years.

So, unless we equip both the highland and the lowlands with the necessary climate smart interventions, they will still suffer. We have a huge project in Borena and mobilized fodder to be delivered as an emergency, because the animals are crucial for their livelihoods. I think it was reported to cost more than five million birr.

The second one was to make sure the ecosystem is protected because that generates the water that goes to the lowlands. The intervention here has a huge impact at the lower catchments. That is why you need to make sure your interventions are holistic. Just by protecting the Bale eco region, you protect 12 million people’s livelihood, livestock and food.

The support is not only in providing materials, but to improve small–scale irrigation, pound point constructions and watershed management, to become drought resilient.

Several projects have been implemented by donors and other NGOs that work on resilience, capacity building and the like. But soon after their launch and brief success, they dwindle out. What do you think is happening in the middle? Why does the impact subside quickly?

The problem lies in the projects design. You have to plan to make it sustainable. When we set up a project, we have to prioritize carefully. If you don’t do that, then what happens is you’ll just be replacing one challenge with another and the impact would be temporary.

Our intervention should be as a facilitator, not actors. If you become an actor, then you are disrupting the market. What we are trying to do is to become the catalytic process, by working clearly with the government, like the Ministry of Agriculture and other stakeholders, so that policies do not contradict.

When we set up the project initially, deforestation was very high. Awareness raising and capacity building campaigns were held not only with the government, but also the communities, on why they need the forest, and understanding why the forest was damaged was very critical.

By introducing a specific blend of coffee, which grows under a shade, to farmers, which fetches a higher market price, the community has started to protect the forest by themselves. By giving them ownership and accountability, when you leave, it will not stop.

That is why you have to be very careful and make sure you have addressed the challenges that surround it.

You mentioned traders usually get more money than farmers, and Farm Africa is doing things to help in this aspect. Could you elaborate more on that?

First, you have to improve their yield per hectare because they usually sell it to the local market due to the low yield of crops they harvest. So, increasing the yield per hectare and then the quality is crucial. Empowering and connecting them with the market also helps them know the market value of their products.

women are paid less in the coffee sector, even though they do just as much, if not more. Is there anything done to empower women into joining the sector?

We assessed where women were involved in the value chain of coffee. The majority of women were found at production sites, such as planting or coffee picking, but you see them less involved as you go higher in the value chain. That is why they earn less because they’re at the lower end of the value chain.

We are trying to build the capacity, knowledge and their participation at the higher end of the value chain and make sure they’re involved outside of the production itself. They must have the power and skills to take their matters to the union and get better prices. And in parallel, find them the necessary financing. That is why around 80 percent of our beneficiaries are woman.

Do you get resistance from the community while doing this?

Not so much. We undertook awareness raising campaigns before we started, to make sure they understand why not everybody had to be part of the growth, but nobody should be left behind at the end of the day either. That’s our principle.

Since the demand for coffee is so high, they don’t see it as competition, they just need more support. It is usually competition that makes you push each other a lot of the time, but now the demand is so much, especially for forest coffee, what’s available is not enough.

Unfortunately, the drought has affected us this season and the amount of coffee we are selling this year is going to be less than last year.

Is there any forecasts as to what the effects of the drought will look like in the coming few months?

No, we have not done that per say, but I know FAO is working around the forecast. We’re coordinating, collaborating and sharing our lessons, not just with likeminded NGOs, but with the government and donors, so that our aggregated knowledge can be able to solve the problem. We are also coordinating with the Disaster Risk Management Commission right now, chaired by the FAO.

Another major problem in Ethiopia’s farming sector is landlessness. Authorities would like to hear recommendations to avert problems arising due to landlessness. What would you like to recommend in this regard?

So, we are not going to solve the issue of land, but what we can do is to come up with ways that we can use the land efficiently and effectively. Once the farmers understand how to increase their yield per hectare, they can increase their labor input as well.

For example, when one of our coffee farmers started working with us, he could barely feed his kids or even send them to hospital. Now, from the coffee sales, he has not only generated substantial income, but has also diversified and is setting up stores in Bale. He also managed to employ 24 youth to help him in the coffee production.

So that’s how we address it by making sure you are climate smart and generating the number of jobs needed to absorb landless youth. Otherwise, you cannot solve the land issue, what you can do is only give access to it.

There are a lot of mechanisms you can do to address the issue. But from Farm Africa’s point of view, what we’re trying to do is to increase the yield per hectare and capabilities of farmers, so that they can hire more people.

From your experience, what has been the hardest thing to overcome in Ethiopia?

We haven’t been able to address or mitigate the impacts of climate change. For me, it’s always been three steps forward and three steps backwards, but we are going in the right direction. Until we address and minimize those impacts and make sure that the farmers move from rain–fed agriculture to a more sustainable climate smart agriculture, it will be difficult.

Access to information and inputs is crucial. We are doing a lot of studies on value chains, different crops and fruits and pulses, and are we disseminating enough information to everybody to make an informed decision, so that they can produce what the market wants.

If you go to speak to most of the farmers in rural areas, they produce using traditional practices. If they do not wait for rain anymore, then they can produce more harvest per year.

Does Farm Africa work on logistics as well?

No, not on logistics, but we try. What we are trying to do is to connect them with the dealers so they can come. The dealers will only come if they can find value. That is why we want to make sure the farmers are organized in cooperatives, so that when they come for the coffee, they can get 40 tons to 50 tons. The volume will make it interesting for the private sector. But, the private sector has to be part of the solution as well.

Do you have any comments regarding the crisis that is going on in the country right now and how it’s affecting the agricultural sector?

As an NGO, we are not allowed to talk about it. We are not allowed to talk about rights. But, Farm Africa is committed to support the reconciliation and recovery process. That’s where we can come in because we are not even a humanitarian organization. So, we can’t even support these kinds of interventions.

What we can do is once stability and security is established, we can quickly go in and support farmers to quickly recover and catch up with the coming harvest season. So, through the post conflict recovery, we have a lot we can contribute, but beyond that, not so much.

Is there anything you’d like to add that would help authorities, individuals or farmers?

Working with farmers is still the solution. They have the knowledge and know-how; you just have to be the catalyst to help them and enable them achieve their goals. We want to make sure the economy thrives.

We need to improve our productivity and production. Everyone including the government, NGOs, beneficiary communities themselves have a role to play to contribute to this. If we do that, we are able to not only feed our own society, but be able to export and help others.

Eskinder Nega is a household name in Ethiopia. Known for publishing newspapers with articles critical of the government, Eskinder has been in the media industry for over 25 years. In 2019, he established Balderas Political Party.

Though he lost the last election to the ruling party, he is still actively participating in political matters. He was among the people arrested in the aftermath of the killing of Hachalu Hundessa and was released a year and a half later on January 2022.

The Reporter’s Amanuel Yilkal and Samson Berhane sat down with Eskinder to understand his journey in the media industry and politics. Excerpts:

The Reporter: Let me take you back to the 90s when you started publishing Ethiopis after your return from the US. How were you attracted to the media world?

Eskinder Nega: I lived in the US for many years. When I returned to Ethiopia, the country was in the midst of changes. There were many magazines, while the only privately-owned newspaper was Eyita. The magazines were not assertive and they feared criticizing the government and its policies. They used to beat around the bush.

I was able to learn a lot from the media environment in the US, which is free to criticize the government without being censored. It is not because I am a daredevil (Jebdegna) as some see me but since I was aware of the media landscape in the US, I wanted to try a new thing.

Then I started publishing Ethiopis, a publication that was ardently challenging the ruling government back then. It continued till October 2006. Ever since I started publishing the paper, I was a target of the Tigray People Liberation Front (TPLF). I was in custody for over 10 years in the period of the TPLF-led government and another one and half years after the then Oromia People Democratic Party (OPDO) started to lead the country.

You were arrested for the first time due to a column dubbed “Fascism in Tigray” that appeared on Ethiopis.

“Facism in Tigray” appeared in the second edition of Ethiopis. The first edition’s cover story was the “killings at Sidst Kilo.” It was initiated after the death of students who opposed the secession of Eritrea from Ethiopia. It was a story that made officials angry. And when we published “fascism in Tigray” in the second edition, we became a target. May his soul rest in peace; Tesfaye Asmare was the Editor-in-Chief of the paper, while I was a publisher back then.

We did the “Fascism in Tigray” story because people in Tigray were not allowed to be a member of a party other than the TPLF back then. Those who did not become a member of the TPLF back then were not only being arrested but were also being isolated from Idir and other social institutions.

Many were isolated just because they didn’t want to be a member of TPLF. We opposed this in our article. The situation in Tigray was no different from totalitarianism, while what was happening in Addis was authoritarianism. The TPLF was controlling every step of the people in Tigray, where there was no freedom of press. In Addis, there was a freedom of press, though it was limited and was a show to create an image that the media landscape is improving after the fall of the Derg Regime.

You are saying the “Fascism in Tigray” column intended to voice the concerns of people in Tigray. However, this goes against what another newspaper of yours was publishing in a column dubbed “Wegid Yihuda”, authored by Tadios Tantu. Articles written under this column were for long criticized for belittling ethnic Tigrayan’s.

Whenever you criticize dictators, they always give you a name. When we were publishing Wegid Yihuda, there was always another article that argues against what was written in it. The column always revolved around the history of Ethiopia. It discusses about King Yohannes IV.

When the British Empire invaded Ethiopia, it was him who received their army at Hamassien. This led to the death of King Tewodros. Tadios Tantu argued this is a betrayal and TPLF is born from such a history.

Do you consider this story as a common history of Ethiopians? Or are you blaming one ethnic group for it?

When Yohannes IV allowed the British to enter Ethiopia, he was not alone. He was assisted by King Teklegiorgis (also known as Wagshum Gobeze) who allowed the British to go through his territory to Mekedella. All of these are a part of our history. Yet I believe we did not learn from it. That is why I allowed the column to be published.

However, I have not gone through each of the words of the articles appearing on Wegid Yihuda. At that time, I was editing stories appearing on three publications with a scarce resource and professionals. We used to call it guerrilla journalism. While fighting the government, we were facing critical shortage of resources. In the midst of such challenges, there were several points that were published, though they were not supposed to be printed.

However, the aim of the article was not to disparage the image of Tigrayans. I never have been an enemy to Tigrayans and I will never be. The same goes with Oromos, even though many accuse me of being an enemy to the Oromo people. We were accountable to the contents appearing on the newspaper. We may have made some mistakes.

I cannot say mistakes were never made when we were publishing articles under the column. I apologize if we made a mistake and for the error. Yet, one thing is for sure, it was never our intention to portray the people of Tigray as our enemy.

You have been given several awards while you were in the media sector. Many also say you have paid a big price for journalism, while some claim that you are an activist rather than a journalist. For you, what are the things you have contributed for the development of journalism in Ethiopia?

Journalism can only prevail in a country where democracy exists. When you try to practice pure journalism in an undemocratic state of affairs, you face several challenges. Undemocratic elements of state target you not because you do not follow the ethics of journalism; rather it is because they don’t want to accept the truth or the reality on the ground.

It is the lack of objectivity that strains your relationship with the government. It is because a dictatorial government doesn’t accept the ethics of journalism. Under such a state, you cannot practice your journalistic profession and when you fail to do so, what you do is fight for your rights. You will also be forced to be an activist, a reality that you must accept because of the situation on the ground. The press in Ethiopia passed through such challenges. Our first aim was to practice journalism.

However, in our second edition, after we published the “fascism in Tigray” story, I was arrested and tortured at Meakelawi Prison. Since then, I was fighting for my rights. On one hand, I was practicing journalism. On the other, I was practicing activism.

We were not able to bring the experiences of the west and practice it here. That happened because we were operating in an undemocratic state, while the opposite is true in the western countries. Of course, when we build a democratic state, it will be the right time to talk about journalism.

Why did you become a politician before exercising what you called “pure journalism?”

In 2006, the TPLF suspended licensing of media outlets. When we got out of prison in 2007, we were hoping everything would go back to what it was and we will be allowed to reopen our media houses.

However, the TPLF-led government refused to give us a license. I then decided to become a human rights activist. I was arrested again in 2012 and remained behind bars until 2018. I then started publishing Ethiopis.

Soon after, the issues of special interest on Addis Ababa became a public agenda. To respond to this, I became an advocate and founded a civil society organization. However, we were not able to get a political party that pushed for the implementation of what we were advocating as a CSO. That forced us to transform the CSO into a political party and I became a full-time politician afterwards.

When you founded the party, you were saying your goal was to fight for the rights of residents of Addis Ababa and even Balderas is registered as a regional party of the capital city.

However, after your release from prison recently, you claimed that your plan from the beginning was to establish a national party. Is that not contradictory?

The problem of Addis Ababa is an outcome of nation-wide problems. Addis Ababa is not facing a challenge of its own. Its current problems are born from a dictatorial form of government. When we founded the CSO, our aim was to avert problems faced by the city and its residents.

We were hopeful that EZEMA [Ethiopian Citizens for Social Justice] will achieve what we wanted for the city, but that failed to happen. When we were opposing against special interest of Oromia in Addis Ababa, we went to the public to sell our ideas. Beyond that, we picked EZEMA to make our objectives a reality.

EZEMA’s closeness to the ruling party did not comfort us. In fact, EZEMA was the flip side of the coin when it comes to the ruling party. As we were not able to get a replacement, the public started to ask how we are going to implement what we wanted at a policy level. As a response, we established the party. However, as there were only four months left for the election, there was no time to establish a national party. That is why we were limited to Addis Ababa.

But as I said earlier, the problems faced by Addis Ababa can only be solved if national problems are solved too.

As a party that claims to fight for the rights of the residents of Addis Ababa, for you, what are the major problems faced by the city’s residents.

Residents of Addis Ababa want to see a democratic Ethiopia, a country with no risk of disintegration. They want a united country. Secondly, what they want is a universal democracy.

It is not a system of government that we create together as the current Prime Minister does. They want a universal democracy that is being practiced in the US, West Europe, India, South Africa, Japan and many other countries. That is what Ethiopians want. It is no different for Addis Ababa, who has the same vision for their country as other Ethiopians do. There are many problems born from a dictatorial government. The issue of special interest in Addis Ababa is also an outcome of such a system.

As home to several ethnic groups, there is a need for the introduction of more working languages in Addis Ababa.

After Prime Minister Abiy Ahmed (PhD) came to power, a new policy has been put in place that aims to increase the working languages of the federal government to five.

That did not follow the right procedure. It needs a legal amendment. The law works for everyone. Especially the government, it has the responsibility to uphold the law. At the national level, we all agree on the need for more working languages.

However, in Addis Ababa, there is no need to add more working languages. Amharic is enough. I never heard the people of Addis Ababa demanding for more working languages.

But there are ethnic Oromos demanding for the addition of Afan Oromo as a working language of the capital, along with the Amharic language. Have you ever conducted a survey to reach to such a conclusion that there is no demand?

I never encountered such a claim. Let alone in Addis Ababa, there was no such a demand even in cities surrounding the capital. Even in rural parts of these cities, residents speak two local languages, including Amharic.

We have not conducted a study. But we did not come across such a demand. I will apologize if I encounter anyone asking for the introduction of more working languages.

Critics say your party focuses on fueling violence. Your party is present wherever there are protests or riots. And you are rarely seen coming up with policy recommendations and solutions for problems faced by citizens. How are you going to address this criticism?

Some say we focus on issues of little importance to the public. That comes from two directions. The first is a concern coming out of kindness. The second is an attempt to silence us. And it is also an action taken to imprison us again.

There are people who believe things that we are giving an emphasis, like demolition of houses, can be solved by taking administrative measures. We have to awaken the public by publicizing and following each problem. We want to make the public aware that a problem that compromises the existence of Ethiopia as a country is happening and they must debate on it.

Supporters of ethnic federalism argue that regions should continue to have the right to secede. However, you argue that secession should not be allowed. Is that not against democracy?

Take India as an example. It is a model of democracy. But it does not allow secession. See the case of Kashmir. The Muslim majority living in the city want to secede from India and be part of Pakistan. That was why they were fighting an armed struggle for the last 80 years. There are also Indian states that want to secede but the law of the country prohibits them from doing so. The same is true in other democratic states, including South Africa and Nigeria.

In Nigeria, the attempt to secede Biafra failed, while the country’s law bans any federal state from doing so. Yet this does not make Nigeria an undemocratic state. The issue of the Catalan’s is no different. The administrators of Catalonia held a referendum and declared independence from Spain. But where are they now? They are in exile in Belgium. So does that mean Spain is not a democratic country? No!

To ensure the existence of Ethiopia and avoid of the risk of disintegration, secession must be prohibited. It is not Balderas that came up with such a rule for the first time. It is based on the experience of many countries across the world.

Agriculture is still the main driver of the economy, whether we like it or not. And we have to make sure it contributes to the GDP as its intended. I think we just have to keep our eyes on the ball.

We have collaborated with other organizations in order to increase our capital as well. Upon our establishment, our bank had one billion and fifty six million birr. Next year, we are planning to raise two billion birr by selling two million shares. We will give first opportunity to buy shares to existing share-holders and then it will be open to the public. The government has set out a rule whereby private banks have to have seven billion birr in capital in the seven years. We have six years to raise the other five billion birr.

We have collaborated with other organizations in order to increase our capital as well. Upon our establishment, our bank had one billion and fifty six million birr. Next year, we are planning to raise two billion birr by selling two million shares. We will give first opportunity to buy shares to existing share-holders and then it will be open to the public. The government has set out a rule whereby private banks have to have seven billion birr in capital in the seven years. We have six years to raise the other five billion birr.

Ethiopians have demonstrated on ample occasions that they will never tolerate anyone bent on advancing their selfish political agendas by sowing instability and thereby jeopardize Ethiopia’s very survival. All political actors need to abide by the notion that each and everything they do must be guided by the vital interests of the country. They also ought to realize that Ethiopia is much more about than the trappings of power, bankrupt ideologies belonging to the dustbins of history, manufactured historical narratives, ethnic and religious identities, and obsession with flags and emblems. It’s then that its citizens can embark on the journey to building a democratic nation that is the epitome of strong unity, durable peace, and sustained economic growth.

The panoply of challenges facing Ethiopia and its people show no sign of respite. Though active hostilities in the northern part of the country, have almost stopped after the forces of Tigray People’s Liberation Front (TPLF) were pushed back to Tigray from most of the territories they had captured in the adjoining Amhara and Afar regions, the security situation in a number of areas of the nation is fragile owing to the interminable endless cycle of violence that has been racking them for years now. Aside from the death of tens of thousands and the displacement of millions frequent outbreaks of internecine conflicts have led to, the unchecked rise in extremist attitudes, the cost of living, corruption, and land grabbing, among others, have made life an ordeal for the vast majority of Ethiopians. It’s in this backdrop that an incident, whose fallout could potentially plunge Ethiopia into a crisis of catastrophic proportions, recently took place.

On March 29 at least 26 people were killed and several more injured in clashes between armed groups hailing from the Minjar Shenkora Woreda of North Shewa Zone, Amhara regional state, and local militia in the bordering Fentalle woreda, East Shewa Zone of Oromia regional state. The blame game began soon thereafter with both sides issuing conflicting a slew of contradicting statements regarding the incident. Amhara region officials lay the blame on “anti-peace groups” whom they accused of perpetrating the attack. Their counterparts from the Oromia region though disputed the accusation, blaming the attack on “extremist forces operating in the Amhara region”. They also took these forces to task for displacing people and looting property in other woredas of Oromia bordering the Amhara region. It’s surprising that both the federal government and the ruling Prosperity Party (PP) have not made any overt attempt to defuse the tension between the Amhara and Oromia regional administrations even as both escalate the war of words among them.

The feuding between officials heading two branches of the ruling party cannot be confined to them given the party is still ethno-centric despite claiming to be a national party. In fact it has led to spats among major opposition parties active in the respective regions and social media activists, which are spewing a hateful rhetoric that could very well pit the Oromo and Amhara people, the two largest ethnic groups in Ethiopia, in a bloody conflict. The consequences of such a conflict are too horrible to contemplate. From a protracted and destructive civil war in which no side emerges victorious to a total state collapse all the scenarios facing the nation are lose-lose not only for its citizens, but also the Horn of Africa and beyond. It’s not entirely clear whether the protagonists to the ongoing verbal warfare realize that their actions are liable to lead to Ethiopia’s unraveling or are indifferent to the ensuing heavy price.

Ethiopians have demonstrated on ample occasions that they will never tolerate anyone bent on advancing their selfish political agendas by sowing instability and thereby jeopardize Ethiopia’s very survival. All political actors need to abide by the notion that each and everything they do must be guided by the vital interests of the country. They also ought to realize that Ethiopia is much more about than the trappings of power, bankrupt ideologies belonging to the dustbins of history, manufactured historical narratives, ethnic and religious identities, and obsession with flags and emblems. It’s then that its citizens can embark on the journey to building a democratic nation that is the epitome of strong unity, durable peace, and sustained economic growth.

Two pieces of legislation entailing catastrophic consequences for Ethiopia and its people are meandering through the United States Congress. The first, whose official moniker is H.R. 6600: Ethiopia Stabilization, Peace, and Democracy Act, is pending before House floor after it moved out House Foreign Relations Committee in mid-February. Entitled S. 3199: the Ethiopia Peace and Stabilization Act, the second was approved this week by the Senate Foreign Relations Committee for consideration by the full Senate. The bills require the President of the U.S. to impose sanctions on foreign persons the Administration determines to have “threatened peace and stability, undermined progress toward a ceasefire, obstructed humanitarian assistance, or violated human rights in Ethiopia.” They would also would suspend certain U.S. foreign assistance to Ethiopia and authorize the Administration to help entities investigate and seek accountability for war crimes, crimes against humanity, and genocide in that country. Furthermore, the bill would require the Administration to “develop and implement a strategy to promote peace, reconciliation, and human rights in Ethiopia and to report to the Congress on its actions under the bill and on other related matters.”

Ever since the forces of the Tigray People’s Revolutionary Democratic Front (TPLF) launched an unprovoked attack on the Northern Command of the Ethiopian National Defence Forces (ENDF), the bilateral relationship between Ethiopia and U.S. have broken down following the U.S.’ adoption a series of measures intended to arm-twist Ethiopia into choosing its side over China in the new cold war. Although the two countries have recently shown signs of improvements in their relations with the allocation of additional U.S. funds in support of different regional states and institutions in Ethiopia, the U.S. is still bent on applying more sticks than carrots to accomplish its strategic goal in Ethiopia and the wider region. The passage of these blatantly biased bills is sure to negatively impact Ethio-U.S. relations for they erode the trust, predictability and mutual cooperation on which they should be based.

What makes the contents of H.R. 6600 and S. 3199 more galling is the fact that they place no sanctions or threats of one against the TPLF despite its instigation, expansion and prolonging of the civil war as well as the commission of crimes of atrocities. In addition they fail to give due recognition to the steps the Ethiopian government has taken to bring a peaceful resolution to the civil war. Chief among these measures are the withdrawal of the ENDF from the Tigray region in June 2021 following the unilateral declaration of a ceasefire; the streamlining of aid delivery to the regions affected by the war; ordering the ENDF to not cross into Tigray after TPLF forces were routed from the positions they held in the adjoining regions they had invaded in December 2021; releasing several politicians, including TPLF leaders, from prison in January; lifting the six-month State of Emergency declared after three months; and declaring a humanitarian truce to facilitate the delivery of aid to the conflict-affected people of Tigray. Such inequity only serves to deepen Ethiopians’ distrust of the U.S. and its allies.

Punitive sanctions do more harm than good and seldom achieve their intended outcome. The US has not secured democracy, peace and stability by imposing debilitating sanctions on any country in the world. It is the poorest of the poor, low- and middle-income Ethiopians who will suffer the most by the passage of H.R. 6600 and S. 3199, not the government officials they target. The sanctions will adversely affect regions which have already been hit very hard by the war, including Tigray, Afar and Amhara given they make it very difficult to source the materials needed to reconstruct the health, educational infrastructure the war has ravaged as well as the resumption of other critical services. Moreover, by calling for an independent investigation into conflict-related human rights violations, the bills signal lack of confidence in the Ethiopian Human Rights Commission, whose report on a joint investigation undertaken with the U.N. Human Rights Commission on the war in Tigray, was endorsed and applauded. The debilitating impacts of the bills on a poor nation like Ethiopia will be devastating and apt to linger for years. This would lead to the very instability and fragility of Ethiopia that the U.S. ostensibly wants to prevent.

In a rare foray into engaging Ethiopians in candid dialogues since the advent to power of Prime Minister Abiy Ahmed (PhD) in April 2018, senior officials of the ruling Prosperity Party (PP) have fanned out across Ethiopia to hold dialogues with citizens from all walks of life. The discussions come on the heels of the premier’s pledge at the conclusion of last week’s meeting of the party’s executive committee that party officials would soon be dispatched throughout the country with a view to seek durable solutions to multi-pronged challenges in collaboration with the public. The party said the dialogue has two underlying objectives: informing the public about the decisions of the party’s first Congress held at a fortnight ago and reaching a consensus on the respective roles of the public and the government in the search for solutions. By most accounts the participants were apparently able to voice their views without any inhibition. Time will tell if the party is committed to heeding them.

The topics raised at the discussions largely coincided with the areas of focus PP’s congress vowed to tackle. Chief among these are the deteriorating security situation in large swathes of the country; the debilitating hike in the cost of living; the rise of extremism and exclusionism; and the proliferation of corruption and other forms of bad governance. The crux of the impassioned and sometimes angry views expressed by the public was that the blame for the current state of things squarely lay with the government. While some acknowledged that the plethora of problems besetting the nation and its people predate the government and thus absolve it of some degree of culpability, most did not buy into this line of reasoning saying that the government lacked both the desire and capacity to put paid to them. In fact, they argued, the rank of the government has been infiltrated by duplicitous elements intent on advancing their selfish interest or the sinister agendas of domestic and foreign enemies. The government would do well to take immediate corrective actions for the extent to which it genuinely responds to the demands of citizens will determine if and how long it may remain in office.

The gravest of the grievances voiced by everyone participating in the discussion forums is the cycle of violence that has been rocking Ethiopia for some years now. From the frequent outbreak of internecine conflicts and targeted attacks to the war in the Tigray, Amhara and Afar regions thousands of innocent citizens including children and the elderly have been butchered and injured with millions more displaced from their homes. Though the public has demanded time and again that the government protect its safety and security and bring the perpetrators of acts endangering its welfare, the latter has been found wanting when it comes to ending the recurrence of senseless carnage. The government’s predictable response to the calls for it to guarantee the fundamental rights of citizens to lead a secure life anywhere within the territory of Ethiopia has been to vow that it’s committed to upholding the rule of law. It must stop paying lip service to a matter of grave importance and back up its promise with action.

The second and equally pressing matter that arose during the course of the discussions was the backbreaking cost of living. The interminable escalation of the headline inflation rate has meant that life has become a living hell for the vast majority of Ethiopians and pushed a significant chunk of the population into poverty. There are a host of reasons driving inflation. One of them is the inability of the government to formulate and implement monetary policies instrumental to contain if not bring down the phenomenon. Its failure to allocate sufficient foreign currency to importers of basic necessities and eliminate the predatory behavior of unscrupulous market actors have further contributed to exacerbating the inflationary pressure. Although the government can do nothing to halt a significant contributing factor—the rise in the price of fuel and imported food items—it is incumbent on it to seek both short- and long-term solutions through meaningful consultations with the general public. Undertaking a course of action that does not take into consideration the views of everyone who has a stake is bound to fail miserably and worsen the problem. The serious ramifications of the spiraling inflation, namely stirring widespread public discontent that triggers political and social unrest, is something the government needs to wise up to and take appropriate steps to neutralize them.

As much as the government bears the primary obligation of easing the suffering Ethiopians are undergoing, it cannot succeed if it tries to go it alone. Aside from empowering political parties, religious organizations, educational institutions, civic and professional associations, elders, the youth and women to play an active role in the search for informed solutions, the government is duty-bound to clean its house and purge officials and functionaries in its structures who are complicit in the very problem they are supposed to fix. Important as organizing dialogue forums may be in garnering the views of the public, it’s paramount to ensure that they are inclusive. It’s only then that the government can effectively respond to the demands expressed by the public in the recent discussions.

As some U.S. lawmakers and lobbyists engage in a concerted endeavor to force Ethiopia into kowtowing to the demands of the West, it is incumbent on the government, people and friends of Ethiopia to do everything possible to foil their sinister design. While efforts are underway both at home and in the U.S. to stop H.R. 6600 and S. 3199 from seeing the light of day, they should be ramped up until the bills are defeated. It’s disheartening though to see some citizens and members of the diaspora community side with the sponsors of the bills. Ethiopians should not despair just because the bills have advanced to the House and Senate floors. In order for them to become law they will need a full vote of both chambers and the signature of President Joe Biden. There are several things that can be done in the meantime to ensure that even if the bills pass they are defanged and unrecognizable from their current form. It’s imperative that we keep up the fight to the death and resolutely defend our national interest.

The inability of the political class to resolve differences through discussions and negotiations has for far too long been a hallmark of Ethiopian politics. There is no disagreement under Ethiopian skies, however deep-seated it may be, that cannot be addressed through genuine dialogue. Politicians that truly have the interest of Ethiopia and its people at heart owe the duty to ensure that they comport themselves in a manner that advances the interests of the nation, not their selfish motives or the agendas of adversaries intent on doing the country harm. They need to work together to facilitate Ethiopia’s smooth transition to a democratic order, uphold the rule of law, and enable citizens to have access to justice. Furthermore, it’s incumbent on them to play an exemplary role in terms of, among others, rejecting discriminatory attitudes and practices, creating a mutually respectful relationship amongst themselves, and forging a culture of constructive dialogue. It’s then that the calamitous ramifications of the war of words between members of Prosperity Party can be averted.

The inability of the political class to resolve differences through discussions and negotiations has for far too long been a hallmark of Ethiopian politics. There is no disagreement under Ethiopian skies, however deep-seated it may be, that cannot be addressed through genuine dialogue. Politicians that truly have the interest of Ethiopia and its people at heart owe the duty to ensure that they comport themselves in a manner that advances the interests of the nation, not their selfish motives or the agendas of adversaries intent on doing the country harm. They need to work together to facilitate Ethiopia’s smooth transition to a democratic order, uphold the rule of law, and enable citizens to have access to justice. Furthermore, it’s incumbent on them to play an exemplary role in terms of, among others, rejecting discriminatory attitudes and practices, creating a mutually respectful relationship amongst themselves, and forging a culture of constructive dialogue. It’s then that the calamitous ramifications of the war of words between members of Prosperity Party can be averted.

Best known for playing a big role in establishing the Association of Chartered Certified Accountant Ethiopia (ACCA), Hikmet Abdella is currently the Director-General of Accounting & Audit Board of Ethiopia (AABE). She has been holding the position since 2019 after replacing Gashe Yemane, the founding DG of the Board.

Hikmet has been tasked to complete the path to full implementation of International Financial Reporting Standard (IFRS) in the next three years.

The Reporter’s Ashenafi Endale sat down with the Director General as she reflects on the path taken to make Ethiopia’s audit and accounting standard comply with internationally accepted principles and rules. Excerpts:

The Reporter: How is the progress of Accounting & Audit Board of Ethiopia (AABE) in professionalizing Ethiopia’s auditing system?

Hikmet Abdella: Financial statement is the cornerstone of any institution, whether they are business entities or NGOs. But Ethiopia had no financial statement standards for a long time and there were also no standards for professionals.

The Accounting and Auditing Board of Ethiopia (AABE) was established under such context. Before the AABE, the Auditor General (AG) used to provide licenses and undertake supreme audits for public institutions. So licensing auditors, accounts and firms was an additional job for the AG, at that time. It gave the licenses but had no capacity to control and regulate them.

A World Bank study in 2007 indicated that Ethiopia’s economy was growing faster and there is no accounting and auditing professionals that matched the growing businesses. The AABE was established based on this recommendation.

The AABE’s task is to license accountants, auditors, firms and regulate them. We also adopt and implement internationally accepted auditing standards in Ethiopia. These professionals undertake audits and submit documents to the AABE. We have a library of firms’ files.

Which companies are difficult to control? Which company structures are more complicated in Ethiopia?

Our prime priorities are Public Interest Entities (PIE) and the AABE is basically established to protect these entities from failing. If a company fails, it might not have much impact on the whole economy but if PIE fail it will have a wider economic impact.

Different countries have varying definitions for PIE.

PIE is defined qualitatively and quantitatively. For instance, financial institutions are PIE with huge numbers of shareholder’s with interests. They collect savings and give loans. So they must be protected from failing. Secondly, SOEs are protected because they are the highest taxpayers.

MFIs and share companies are our next priorities, while PLCs are our last priority. We don’t have to control vendors since they have absolutely no impact on the economy.

Every jurisdiction has its own definition. The AABE is currently developing its own definition for PIE and other business entities but we have to align with international standards.

Currently, a similar international definition for PIE is being debated and we have been participating in such debates virtually, due to the COVID-19. Probably by next year, we will have a new definition for PIEs. But there will not be much deviation from what we are using now.

The AABE’s task also relates to domestic resource mobilization. Big companies have to generate big taxes and the AABE controls big business entities strictly, than small businesses.

Ethiopia’s private sector is very new. It has only been 30 years since the communist regime changed and the only big players are financial institutions, followed by other share companies.

Generational companies, that have passed from generation to generation, have also a big role to play and we must be able to maintain family owned enterprises. They usually lie in the middle, between small and big companies.

Family owned enterprises, if well nurtured, can contribute up to 50 percent of the tax revenue. So they should be considered as PIE. But in Ethiopia, family owned enterprises are dying out currently, due to various reasons.

Scholars argue that the tax base should be diversified in Ethiopia. Is it big companies or small businesses that pay more taxes currently?

It is a matter of context. Large taxpayers have to get incentives in different mechanisms, so they can grow more robustly. A country cannot grow without diversifying its tax base at a small business level.

The number of taxpayers in Ethiopia must grow. Many small companies, pooled together, bring huge sums of tax revenues. But the tax authorities must be careful not to squeeze small businesses through stringent taxes. Small businesses must be relieved from stringent of taxes, so they can grow.

What is the AABE’s capacity in controlling and regulating Foreign Direct Investments since Ethiopia’s economy is integrating into the global economy?

The Prime Minister recently stated that the financial sector will open up. And the ongoing liberalization and privatization, as well as the World Trade Organization accession, need ultimate caution. It is good that big foreign players are coming to Ethiopia. But all regulatory institutions in Ethiopia, including the AABE, must sit down, and discuss whether we can handle it or not.

Ethiopia’s economy and regulatory institutions have been closed for a long time. Even neighboring countries have more capacity when it comes to regulatory capacity. There are also differences but we cannot remain closed. We must look for methods to bridge the regulatory limitations.

The east African block including Rwanda, Uganda, Kenya, have a system in which accounting and auditing professionals can move freely from one country to the other.

When Ethiopia opens up, they will bring their own systems and professionals. Ethiopia must produce its own professionals to control foreign firms. Currently, Ethiopia has no sufficient accounting and auditing professionals to support the economy.

We are currently preparing to establish the Ethiopian Institute of Certified Public Accountancy (EICPA). Hopefully, it will be operational this year and start to produce professionals. If you go to Kenya, there are close to 40,000 professional accountants but Ethiopia has around 250 professionals. We cannot support or handle the opening-up of the economy with such meager figures.

The Capital Market is nearing realization in Ethiopia, which requires precise and highly trained professionals. PIE will be affected if we launch a stock market without skilled professionals. In some countries, only firms listed on stock markets are considered PIE.

As soon as the stock market is opened, banks will be the first to be listed. These institutions must be valuated every three months, instead of annually as before.

Unless we have professionals to value the Initial Public Offerings, public interest will always be affected. Even statements made by politicians can affect the value of an IPO; so the listed firm must be valuated frequently. This is impossible without qualified accounting and auditing professionals.

Officials at the National Bank of Ethiopia are saying it will take three years to create a fully-fledged stock market ecosystem. Can we reach that with the absence of professionals?

Big things can be done in three years. With the EICPA established now, and is backed with a sufficient budget, we can generate 5,000 professionals annually.

There are already many graduates but there is much to be done to create the right stock market ecosystem. Public interest must not be affected, until we try to fill the gap in lack of professionals.

There are many distortions in the commodity value chain and malpractices in the corporate world in Ethiopia. Even recently, importers and wholesalers have been blamed for hoarding edible oil, which has caused a crisis. Do you think the AABE has created a good corporate culture in Ethiopia?

We did not achieve much progress. There is no responsibility. Do you think money laundering is done without the knowledge of accountants? Is the accountant responsible to the public, government, or the company owner?

Ethics is the biggest problem. Accountants can build or destroy a country. The demand for accountants is always up, even at war times. Accountants can change small money into big, or vice versa.

Currently, Ethiopia is negotiating to start the Africa Continental Free Trade Area (AfCFTA) and also the WTO. It should be accountants that represent Ethiopia on the negotiation table. Accountants know what the agreement articles mean. They can tell you what it means ten years from now.

Does the AABE work with the auditor general? Do you have the capacity to take action on accounting misbehaviors?

The Auditor General audits institutions and we produce the professionals. We do not audit public institutions. We do SOEs, private companies and NGOs and the Ministry of Finance reviews the financial statements. Currently, we are reviewing SOEs parastatal financial statements. We will discuss with the PEHA, the MoF and the AG next week.

Ethiopia embarked on the road to privatization and liberalization three years ago to shift the economy from state-led to the private sector. But currently, regional states are building their own conglomerates, while the federal government also establishes the Ethiopian Investment Holding. Do you think this can create productive and efficient firms in the economy?

That is a difficult question. What is for sure is less is done concerning financial statements. Many SOEs, endowments and other firms vanished, or merged, without any consultations with the AABE.

There is a huge problem on this issue. There is no procedure at all in cases of shutting down SOEs, mergers or creating a holding company. Assets, liabilities and other complexities go without proper accounting, especially in mergers. Firms usually close or merge in the middle of the year, before the fiscal year ends and a financial statement is compiled. This is a big problem.

Usually, the Cabinet of Ministers decides on the formation, closure or merger of SOEs.

I have no knowledge on why the government is making changes when it comes to its role in the economy. But strengthening parastatals is common in many countries. We are also seeing progress to accede to the WTO.

Is there capacity to regulate foreign firms like MPESA and are foreign banks allowed? Do you think banks can survive foreign competition?

Ethiopia’s financial institutions are better than where they were ten years ago. If a single foreign bank had come ten years ago, local banks would have never survived, even if they merged into one.

But now, local banks are stronger. The problem is, local banks cannot grow more than they have now. They cannot diversify their products anymore and are very similar. If foreign banks or MPESA come, more products can come with them and support the economy.

But the banking sector will not be opened at once and will be gradual and managed. Unless the regulatory capacity grows parallel and equally, Ethiopia will be in danger.

What do you think is the competitive edge of local banks?

There is not much but their organic growth is very appealing. But the quest for access to finance in Ethiopia is beyond the capacity of existing banks. The economy grew very fast but the access to finance did not.

Even now, we are facing a liquidity problem, which has affected the construction industry due to the lack of credit. The construction industry massively contributes to the economy. But it depends on finances.

The return on shares also remains very positive. But some banks are reaching their ceilings. Many people bought shares because there were no other alternative investment areas at the time. And once the stock market is opened, there will be more opportunities, even for the layman.

Did the new Commercial Code, which was amended after 62 years, bring changes to company structures and accounting systems?

Allowing the creation of a holding company, one person PLC and other minor changes have occurred. The code also allowed foreign accounting firms to come to Ethiopia. The big four, which include KPMG and PWDC, are allowed to operate in Ethiopia.

But these international financial institutions can only partner with local companies. They are allowed to have a 49 percent stake. They are currently requesting us for a license. This is one of the signs that the economy is opening.

The big four will have a big role in capacity building but are very unhappy with the 49/51 proportion. But for me, it is perfect.

So auditing is allowed for foreigners now?

Yes, but this was only made possible after the commercial code was amended.

Recently Ethio telecom’s CEO, Frehiwot Tamiru rejected the 80 billion birr asset valuation of the company. Some say the low valuation is intentional, and conspiracy concerning the valuator has been raised.

I am very concerned of the valuation issue in Ethiopia. Valuation is one input for accounting. In the old days, the value of vehicles dropped every year and on the tenth year, the value gets to zero. The Tax Law also states it must depreciate by ten percent annually. The IFRS states an assets value must be stated in its current market value, which shows the true value of a company.

In Ethiopia, the value of vehicles keeps appreciating. A Toyota bought with 200,000 birr ten years ago is now 2,000,000 million birr. So according to IFRS, the vehicle is worth 2,000,000 birr. But the tax system does not demand depreciation.

Who is the right valuator in Ethiopia? There are only three certified valuators in Ethiopia.

The conspiracy issue when it comes to foreign valuators is not a new issue. That is why I say the opening up of the country must be cautious. Ethiopia has been closed for so long that the process must be done step by step. The reasons why the big four hate the 49/51 ratio is because they want to come at once and manipulate the weak regulatory system.

Whatever your background, you care about your country. But foreign firms care only about their profit. The loyalty of their accountants and auditors is not to the Ethiopian public or the government. It is for their parent company abroad. This is why we must produce our own professionals, to maintain the balance.

Which institutions have shown progress in implementing IFRS?

That would be financial institutions. They have the money and IFRS is expensive. If a company can afford the expensive professionals, it is simple to implement IFRS. There is a huge demand for the professionals, but there are very few. The demand shot-up since the AABE came.

Financial institutions are implementing IFRS because they have the money and managed to engage international financial consultants, but SOEs are the first to bring an IFRS report four years ago.

Banks are blamed for engaging in informal financing including the black market, and informal Hawala services. Do you think IFRS brought transparency to the banking system?

Every time an economic system is closed, informal doors are opened, including corruption. Many problems will be solved, if the economy is opened but as long as it remains closed, it creates many loopholes.

New banks have come into the picture in the past three years. But lately, the PM has said the sector will open up soon. When should it be opened?

When foreign competition comes, it will be all about survival of the fittest. How long will it take for our banks to be fit? If they have to merge to be competitive, let it be. Mergers should be encouraged. It is better to have a few strong, internationally competitive banks than many banks.

So far, Ethiopian banks are not even going into regional states, because they did not even satisfy the urban clients while Kenyan and Nigerian banks are working at continental levels. That should be our direction.

What would be your expectations of the upcoming stock market?

It will engage the ordinary people. Only few have been able to buy bank shares. But in a capital market, people can have a stake in the stock market. Anybody can invest in profitable businesses, in a stock market.

Will the EICPA produce professionals for the stock market?

Yes. The institute will generate mainly certified public accountants, to address the diversified demand of professionals from different institutions.

Various institutions want to install their own institute to produce such professionals. But that would be unaffordable. So it should be the EICPA that branches-out and addresses these diversified interests.

Who will be listed on the IPO first?

Financial institutions, then SOEs, share companies, and family owned enterprises. The last one may need discussions on whether they want to go public.

Cross listing is also possible. For instance, companies like Coca Cola, which are listed in other countries and also operating in Ethiopia, can be listed in Ethiopia.

Why is it still difficult to solve under-invoicing and over-invoicing challenges in Ethiopia’s import-export business?

Our concern is how to address it through a transparent accounting system. But there are varying scholarly debates on this issue.

Lately, the Ethiopian Investment Holding company has been formed to be an umbrella company for SOEs. Do you think such a mammoth holding company, run by a government, can be efficient given that SOEs are known for wasting resource?

I believe such trend of creating holding companies is a good start. If there is a strong accounting and valuations system, SOEs and holding companies can be efficient.

Liability and asset management company (LAMC) was also recently formed to soak up SOEs’ debts. Credit default swaps, or trading credit derivatives, is common in other countries. In Ethiopia too, some banks are buying defaulted debts from prospective enterprises. Do you think the trend is recognized by the AABE in Ethiopia?

This area should be researched. Many new trends are emerging in Ethiopia’s economy and its contribution must be analyzed.

Before the Ukraine war and COVID-19, scholars were saying globalization is invincible. Now, self-sufficiency is becoming irreplaceable. We have been dependent on FDIs, but they abandon industrial parks when they want. Yet, Ethiopia is pushing for privatization and more integration in the international economic system.

Don’t you think it is time to focus on economic sovereignty, including import substitution? I am not talking about closing the economy, but where should be the boundary?

No country is economically self-sufficient, including the US. Their economy was stuck when Chinese supply declined during COVID-19. Many companies closed in the US, because the supply chain was disrupted. Ethiopia cannot think of self-sufficiency with a nascent manufacturing industry.

But I believe it is time to re-prioritize our policies. Especially, our negotiation skills on international economic activities must grow. The level of our negotiation skill determines the level of external debt stress on our economy.

Many countries have long term plans, up to a century. We must be clear and have a realistic plan on where we want to go in the long term, regarding self-sufficiency, import substitution, even on Chinese imports. For instance, we export oilseed and import edible oil at expensive prices. This can be replaced locally.

Many investments were damaged due to the conflict in northern Ethiopia and COVID-19 pandemic before that. Can they be compensated rightly?

Knowing their accurate accounting is critical, to determine their losses and compensations. We also need to produce professionals on investment insurance policies.

How man licensed auditing firms are there?

Basically, the AABE gives two kinds of licenses. Authorized accountants prepare financial statements. There are around 2,000 authorized accountants, at federal and regional levels and there are 162 independent auditors.

What are its challenges?

There are many challenges. The AABE is a regulatory body. We are expected to have much more capacity than those we control. One of the challenges relates to professionals earning more money if they operate privately, than work for the AABE.

Professionals in regulatory institutions, have less incentive. If the professionals have more power than the regulator, it is difficult to regulate. For the time being, the board is using consultants who are paid by the World Bank, with approval from the Ministry of Finance.

ACCA supported us too. Currently, the AABE is in good position. We know how to review audit reports, and control licensed professionals. Some companies take up to four years to finalize financial statements, but we always begin to review from the first year.

The world is celebrating March 8th. Do you think the affirmative actions provided in Ethiopia have really empowered women?

I do not know what incentives are provided. March 8th is good to highlight the challenges women face. But nobody cares about the details on normal days. Those women like us, who have succeeded, should share our experiences and become role models to young people. We have much homework ahead.

The statistics of women in higher corporate and leadership positions, is alarming. I think there is only one bank president currently and this is not because women lack capacity. If you look at the boards of banks, women constitute less than 10 percent. It is the same in SOEs.

Our definition of democracy is distorted. Ethiopians think ideological semblance comes from similar people. That is wrong. Successful women must nurture the young.

Some European banks which survived the 2008 financial crisis, were banks led by women. Do you think making women CEOs is a guaranteed success?

Women have different management philosophy than men. Women lead with humility. It is not because we have more capacity but because we have intense concern for humanity.

Usually women empowerment issues are used or raised during March 8th or elections. When will equal opportunity become embedded in the publics thought?

We live in a man’s world. The existing trend must change completely, to accommodate women. A new world and country that equally accommodates women and men must be created.

Radical feminists argue a new social order should be created from scratch.

That would be good, if it is possible.

But other groups argue the existing world can accommodate women, with some adjustments.

I agree with this one. But I do not think we should try everything foreigners tell us, especially on feminism. Context and culture are very important. Ethiopia has a different context from the west. We can create an indigenous system for Ethiopia.

First, we have to reconfigure what the education system, society and the media tells about equality. The narrations and practice must be seamless, while extremist views on gender issues only harms the efforts.

If completely erasing the existing system and creating a new order is possible, it should have been simple to reshape the country.

For instance, there are some jobs where women earn less for the same position. Can it be solved by policy actions?

There are various challenges posed on women, some to be solved by the government, some by the private sector, or the society. For instance, board compositions can be solved only by policy. Chambers can also do more work to bridge the inequality gap. And some challenges are inherently solved through time.

There is this discussion over equal opportunity versus equal outcome. There is opportunity for all. Both boys and girls go to school. But that equal opportunity does not continue. Women give birth and then must take care of children.

The inequality will change as more women come into leadership roles. No challenge can be solved overnight, through policies or campaigns. For instance, the AABE can play a role in board compositions because corporate governance is one of its tasks.

Sewagegn Chane is director of the Public Financial Institutions supervisory department at the Public Enterprise Holding and Administration (PEHA), which regulates state-owned enterprises. Sewagegn is currently responsible for directly supervising the Development Bank of Ethiopia (DBE) and the Liability and Asset Management Corporation (LAMC). The Commercial Bank of Ethiopia (CBE), Ethiopian Insurance Corporation (EIC), and the National Lottery were also under his supervision, until they are transferred to Ethiopian Investment Holding (EIH) past May.

Working in public financial institutions for 30 years, Sewagegn initiated the establishment of the stock market in Ethiopia, which is bearing fruit eleven years after the first feasibility study. He was also vocal and key in rescuing the DBE, initiating Ethiopia’s first reinsurance company, Takaful (Islamic insurance), among others.

Sewagegn is also researcher at i-Capital Institute and organizer of the East African Finance Summit. Currently, he is leading two teams formed at the institute, studying the establishment of an investment and agricultural development banks in Ethiopia. Although he has been advocating ending state protection over the financial sector for years, he has currently changed his mind, just as Prime Minister Abiy Ahmed (PhD) authorized a policy that envisages opening up Ethiopia’s financial sector to foreign competition. Sewagegn believes the banking sector should remain closed at least for the next few years. The Reporter’s Ashenafi Endale sat down with the public finance guru. The excerpts, does not necessarily reflect PEHA’s position.

The Reporter: What is the progress in reforming public financial institutions, which commenced after Abiy came to power?

Sewagegn Chane: The biggest reform we undertook is in the DBE. In 2018/19, the House of Peoples’ Representatives (HPR) decided DBE cannot continue as a financial institution and debated on how to dismantle it. That year, the bank reported 765 million birr loss so the HPR decided that the bank is not supporting itself, let alone the economy.

Myself, Haileyesus Bekele, the president at the time, and Yohannes Ayalew (PhD) DBE board president at the time, were called by the HPR to explain the issue. At that time, Public Finance Institutions Agency was a separate entity outside PEHA. The agency was led by Sintayehu Hailemichael (PhD) and I was the deputy director for operations. When some 36 SOEs were put under PEHA in 2018/19, the agency was included under PEHA, as a directorate.

The Budget and Finance Standing Committee at the Parliament insisted the DBE must be dismantled, because it was reporting a loss consecutively. The three of us were called to give our final comments on the committee’s decision. The committee was told that the fundamental problem of the bank was the lack of institutional independence.

Everybody was intervening in the bank, and it was unable to operate as a bank. The PM, other ministers, sectorial institutions, and even individuals have been meddling in DBE’s operation. Secondly, the bank gives loans but does not collect. Those who took DBE loans view it as the government’s budget, not as a client. Most of them had the “developmental investors” plate.

They take a loan and divert it to other businesses. Commercial farming in Gambella and Benishangul are good examples. I was in Gambllea for a year and half, to study why DBE’s loans failed there. There are so many rain-fed projects there. Particularly, six of those that took loans completely diverted the money to other businesses, instead of the commercial farming.

I stood before the standing committee, and pledged to give the DBE additional time. I told them if institutional freedom is restored, relationships with clients will be straightforward, and the bank’s loan collection capacity rebuilt, bringing DBE on track. So I asked the standing committee to give us just one year, and if we fail to rescue the bank in that year, then the committee can dismantle it.

Yohannes on his behalf explained how the IMF and the World Bank are happy to see the DBE dismantled because they do not want development banks in developing economies. He also elaborated how important a development bank is for Ethiopia. After a brief tea brake discussions, the standing committee announced it granted the one year time.

Immediately, we embarked on the reform agenda, introducing seven reform pillars. One of the biggest reform pillars was reducing DBE’s Non Performing Loans, which was over 40 percent at the time. If the bank cannot collect the loans, it cannot disburse loans the next time.

DBE’s NPL at the time was weighed in rain-fed agriculture and textile. So, we stopped any further loans for rain-fed agriculture. In textile, many foreign investors took loans in billions but did not pay, so we decided to take over all the projects that are not paying back their loans, and transferred them to other investors.

We also took the contract management of non-performing projects. For instance, the DBE took over the management of Elsi Addis, Etur and other textile factories, for the time being. Except Etur, most of these projects have been transferred to new investors, without reaching the foreclosure stage.

The major project left on our hands to date is Ayka Addis.

The other serious measurements we took were barring any officials from intervening in any loan appraisals and disbursement processes. Before the reform, orders for some loan approvals were given from the Office of the PM. Officials from the Industry, trade, agriculture, and many other ministries used to give such informal orders to the bank. Now, even the DBE board cannot involve in loan disbursement cases, except on strategic issues.

We managed to reduce DBE’s NPL to 30 percent this year, including Tigray loans. It is actually 17 percent, if loans in Tigray are excluded, which are affected by the war in northern Ethiopia. Profit comes from loan interest. If the loan is not collected, there can be no profit.

We managed to generate 1.2 million in 2019/20; just a year after the reform was launched. This year, the bank generated 3.9 billion birr in profit. If we did not put aside 4.1 billion birr provision for the Tigray loans, DBE’s profit this year could have been 7.8 billion birr. The DBE is rescued now and everybody is acting as a client now.

DBE’s source of finance is the guarantees from the Ministry of Finance and the National Bank of Ethiopia (NBE). The capital has increased from five million to one billion. The macroeconomic committee approved a study to allow new DBE bond, effective since January. This is apart from the GERD bond, which is the DBEs source of finance.

Before the reform, all the financial indicators of the bank were negative, and unhealthy. We completely reversed all of that, except for the NPL. Before the reform, there were only expenses and disbursement, but now there is income.

Out of the 31 strategic measurements we stipulated under the seven reform pillars, 21 are aggressively implemented and ten are in the process. Only one measurement has not started, which is the digital technology and modernization initiative.

The PEHA and DBE’s board has contributed for the success of DBEs management. One of the positive factors is the steel-serious discipline of Tegegnework Getu (PhD), the board chair of DBE. As a board chair, he is opaque to any external influence or favor. He never took stipends and incentives allocated for board chairs annually. Even he uses his own car for DBE activities.

Yohannes was the chief economist at the NBE for a long time. How did you believe in him, that he could rescue the bank?

Under past presidents, the bank had many deviations and exceptions. Instead of going through loan approval and disbursement procedures, loan seekers directly contact the president and get the loans, informally.

For instance, after we banned DBE loans for rain-fed agriculture in 2018/19, the bank gave 120 million for rain-fed agriculture project. The president at the time said he was forced because certain officials at the Ministry of Agriculture managed to give the order via the Office of the PM.

Surprisingly, the board chair does not know about the loan. The bank was bleeding. We had to be brutal to stop the bleeding. Most of the bad loans were given during Isayas Bahre’s time. Both Haileyesus and Getahun Nana were unable to save the bank. Our biggest worry was that Yohannes might decline the role to lead the DBE.

Over 200 large scale agricultural projects, and a number of foreign textile investors took loans from the bank and failed to pay. Are you pursuing them legally?

We are trying to acquire the lands currently. Our biggest problem now is with the regional governments of Benishangul and Gambella. The land is the key asset the investors provide as collateral to take the loan from the bank.

After the investors fled without paying the loans they took, the DBE has to acquire the lands, since it is the collateral. Once we finalize acquiring the lands, we will transfer it to other investors. Then we will recover the previous loans.

I heard the Benishangul and Gambella regional governments are demanding it pays taxes on the lands?

We reached agreements on some of the lands in Benishangul. There are ongoing debates on the amount. The bank agreed to pay the tax, if it agreed on the amount. The regional governments usually give one plot for multiple investors, so one certificate is given to multiple investors. The regional agriculture bureau has been reporting to us that the lands were being cultivated by the investors, which was false.

In general, rain-fed agriculture and textile investments have bled DBE.

For instance, Ayka Addis’s investor used informal channels to get the loans, instead of going directly through the bank. It either goes through the PMO or other officials. Solving all this was not simple.

Most of DBE’s clients were unruly. They had the right to take the loan, and the right not to pay. So we disciplined the clients first, and reversed the bank’s practice of negligence. All this was done in three years.

How much is the land leased for the rain-fed projects?

The rate depends on the regions. Basically, tax, lease and anything related to the land is handled by the investors. But since the investors went bankrupt, and the DBE took the lands, now the bank has to pay them. This is the reason why the regional states are asking DBE for the taxes, because it is under the bank now.

The investors who took the land in regional states for commercial farming, left, and the tax holiday period is over. So regional states are now claiming the taxes and the DBE agreed to pay. This is the game.

Did the Gambella commercial farms failed by design?

The loan was supported by policy. The policy of initiating commercial farming and modernizing the agriculture was not wrong. So the DBE prepared policy and procedures.

The major factor for the failure at that point, was the decision to give loans for rain-fed agriculture. This was a mistake because the investors knew the loopholes and abused the loans and failed to return it.

The DBE is on the right track now but business continuity is more critical.

What are DBE’s sources of funds, after the NBE’s 27 percent T-bill is replenished?

The NBE introduced another bond this year, in which banks channel one percent of their loan portfolio to the DBE. In the past six months, a bit more than 10 billion birr has been channeled to the bank from this new scheme. Once we start from insurances, these two schemes will become our biggest source of funds.

The GERD bond and loans from international banks also generate finance. It also accesses external funds like SME loans, through the MoF. DBE’s T-bill is almost zero currently.

How much is the loan interest the DBE is paying currently, when will the rest mature?

The DBE pays interests by adding two percent on the saving interest, which means nine percent. On the other hand, DBE’s interest rate is between 11 percent and 12 percent, the least being for import substituting projects. The margin covers its administrative cost. So the bank is able to pay all its interests duly.

DBE requested to put Tigray NPL’s off its balance sheet. But NBE officials told The Reporter that it is not going to take it off its balance sheet.

If Tigray’s NPL is put-off DBE’s balance sheet, DBE’s NPL could be 12.5 percent. But including the Tigray NPL, which is 10 billion birr, the NPL stands at 30.4 percent. What we are saying is this 10 billion birr in NPL happened by factors out of DBE’s control. We are not asking the NBE to cancel the Tigray loan.

We undertook a detailed study on how the NPLs could be taken off the balance sheet, and presented to the NBE. We do not know why NBE is silent on the issue. The CBE also requested the NBE to take off two billion birr off CBE’s balance sheet. This was also studied and presented to the NBE.

The NBE first said the request should be processed by the Bankers Association but the issue is still in the process. It is illogical to keep inactive numbers on banks’ balance sheet. When unrest occurred in Oromia over the past few years, the NBE allowed loans of affected investors in the region to stay off banks’ balance sheet. The same can be done for Tigray. It is not a big deal. It is NBE’s decision but I do not know why it is reluctant when it comes to Tigray NPLs. Tigray NPL does not represent DBE’s actual performance, which is outstanding.

DBE’s outstanding loan is 63.4 billion birr. Total NPLs stood at 19 billion, of which 10.1 billion birr is created in Tigray since the war. The president of DBE requested to exclude the Tigray NPL but PEHA does not agree, unless the NBE approves it.

Another investor is negotiating to buy Ayka Addis. Will this be the last negotiation?

A number of potential buyers have been trying to buy Ayka Addis in the past but failed. Especially a Chinese investor was very eager to acquire Ayka Addis. Any potential buyer is expected to contribute 50 percent of Ayka Addis’s portfolio. For instance, the initial investment loan was USD 1.7 billion so the buyer is expected to contribute half of it. But the Chinese lacked capital so it requested to contribute only 10 percent of it, which means around USD 200 million, so we refused because we cannot breach the 50 percent law.

If Ayka Addis is sold, DBE’s NPL will drop to around 15 percent, from the current 30.4 percent. Ayka Addis is holding a huge loan. The principal loan is 1.7 billion, a decade ago. Including the interest, probably it is around USD three billion by now. The value of the machines, factory building, raw materials when the DBE received Ayka Addis, is valued at USD 1.79 billion.

By the way, we are still paying the salary of 4,500 employees of Ayka Addis, though it has not operated for years now. It is between 13 million birr and 14 million birr every month. We cannot abandon the employees, after the Turkish investor left. We are carrying all this cost.

There were also other alternatives for Ayka Addis, other than selling it.

There were three major options tabled. The first is selling to a capable investor or buyer. The second is operating Ayka Addis under a management contract, just like Elsi Addis and the third was repurposing Ayka Addis into an Industrial Park. Some three potential investors have been negotiating. The Chinese came last.

Currently, another negotiation is underway. We hope this will be the last one. It is a consortium of local and foreign investors. We will disclose it when it materializes. Ayka Addis’s operation ranges from cultivating cotton to sewing the clothes. It pins the cotton, dyes it, and makes the clothes. It is an end-to-end project. So the potential buyer is expected to specialize in all these value chains.

Will the new buyer pay Ayka Addis’s accumulated tax?

Under Ethiopia’s law, a company does not pay taxes if it declares bankruptcy. After the DBE took over Ayka Addis, the tax authorities are saying Ayka Addis must pay tax, since it did not undergo liquidation. Ayka Addis was not operating for the past eleven years. So, the tax authority is asking for back-taxes for all these years, stating the project did not declare liquidation. So we are arguing with the tax authority.

But the DBE declared foreclosure?

When the Turkish investors left and the DBE started managing Ayka Addis, the tax authority started asking for tax.

Amazingly, Bmet cables, one of the Turkish investments abandoned after taking huge loan from the bank is a good example of how much Turkish investor’s exploited us. Under the Turkish investor, Bmet cables utilized 40 percent of operational capacity but they were not paying their loan.

Now, the local buyer, Tadesse Admasu of Red Star Trading, is operating at 12 percent of its capacity due to different reasons. The buyer acquired Bmet paying 890 million birr. Now, it has paid all the loans owed to Bmet.

How much has Ethiopia lost because Turkish investors left the country without paying DBE loans?

Before, their equity contribution was 30 percent. This means the DBE contributes 70 percent of the investment. Under the previous ratio, a Foreign Direct Investment comes with USD 30 million, and takes 70 million. The foreign investors left without paying the 70 percent loan they took from the DBE. But now, we adjusted the equity contribution to fifty percent, for foreign investors. Local investors pay 20 percent.

FDI is needed to bring technology, capital, forex, and create jobs. It did not meet any of these targets.

One of the other loopholes FDIs has been exploiting is that they highly under invoice export price. They usually have subsidiaries or a mother company operating abroad. So they export the clothes to them, with fake price documents. These investors also import raw materials only from those mother companies or subsidiaries abroad. The FDIs operating in Ethiopia do not want to use local inputs. They export t-shirts with USD 60 cents from Ethiopia. But the buyer abroad, which is affiliated to the FDI, resells it at a much higher price. So the FDIs generate meager forex for Ethiopia. Their bank statements also indicate loss, always. Especially the expats brought by FDI are highly abusive. Bmet’s former CEO has been paid 500,000 birr in salary monthly. This is excluding housing, vehicle and other accommodations. Now we decided to reduce expats inflow.

That is why, just when we started being strict on Ayka Addis that the Turkish investor’s fled Ethiopia immediately, without handing over the project’s properly. I think they left for Burkina Faso.

Are there new public financial institutions planned to be established, particularly to finance long term development projects?

Four years ago when the bank was in deep trouble, we conducted a study to determine its fate. One of our alternative recommendations in the study was to breakdown DBE into three different policy banks; into an industry bank, agricultural bank and an SME bank. Finally, a decision to reorganize and reform DBE as it is was made. In the meantime, we conducted a study to renovate the bank; the ATA was also making moves to initiate the establishment of an agricultural bank.

The initiative to establish a stock market was also conducted by us. We have been trying to convince the government to establish a stock market for the past eight years. It is only realized under Abiy.

Now, the importance of an independent agricultural bank and investment banks is imperative for Ethiopia. In line with the agricultural bank, agricultural insurance and micro-insurance firms are necessitated equally. These firms protect the loans provided by the agricultural bank to farmers.

We conducted the “Proposal of restructuring public banks” in 2014. The proposal included the recommendation to determine the fate of the former Construction and Business bank (CBB). We did not just demolish CBB without a proper study.

The same studies have later been modified for the DBE. The modified study also recommended the vitality of Agricultural Development Bank, and mortgage bank (construction bank). The plan is for the CBE to stop mortgage financing, and transfer the role to the new Construction Bank (CB). In fact, the proposed CB partly takes on the role of the now defunct CBB.

Currently, we have established two working groups at i-Capital Institute, studying on investment bank and the agricultural development bank each. PEHA has the mandate to give birth to new public enterprises, apart from managing the existing ones. It can also decide on mergers, and dismantling of SOEs.

As long as Ethiopia is progressing from an agrarian economy to manufacturing, a stock market is very essential. If we need more robust manufacturing companies, we must build a robust stock market, where the companies are listed, float shares, and mobilize capital. A manufacturing industry cannot grow without a stock market.

The banking sector fears to give loans to manufacturing industries because the banks fear losing their saving capital. Once the stock market is active, the interest in banks will drop. But the stock market will grow faster, hand in hand with manufacturing.

I hope the establishment of an agricultural bank is realized soon. Ethiopia has an agrarian economy. But the economy is currently distorted, as the service sector constitutes the largest portion of the GDP. In a bid to transform Ethiopia’s economy from an agricultural to a manufacturing industry, agricultural development bank cannot be an alternative. Agriculture is not developing due to lack of finance, fundamentally.

The agricultural bank also needs an insurance firm, to cover the risks of the loans. The bank finances tractors for the farmer, and then the insurance firm insures the machines as well as the harvest. It is highly imperative that agricultural development bank and investment banks are essential for this country.

A secondary market cannot operate without an investment bank. Since we are nearing the establishment of a stock market, we also need to establish an investment bank.

For instance, banks are planned to be listed on the stock market. The investment banks will study the banks, as well as other IPOs, inside out. So, the investment banks determine the exact value of shares, and securities. This means IPOs, including commercial banks, cannot determine the price of their shares by themselves, unlike now.

The underwriter preserves the interest of every stakeholder, investor, IPOs, and others. It sets standard but the investment bank cannot be listed on the stock market itself.

Once the two working groups wrap up their studies, the documents will be reviewed by stakeholders. Then, we will present the final documents to the government to decide on whether to drop or implement the study’s recommendations.

A few years back, we travelled to Nigeria to visit their central bank and development bank and took three months of training. I was amazed by their Islamic insurance. We extracted lessons and brought it to Ethiopia.

The government is saying the banking industry will be opened for foreign competition very soon. What is your take on this?

Before, we have been asking the government to open the banking industry. But recently, we have changed our perspective. We prefer the government to delay the opening up for now. I precisely know the exact capacity of each local banking institution.

Before, our assumption was that local banks will merge, at the face of an open up. So we have been advocating for it to open, at each meeting and financial summits.

Basically, banking and insurance businesses in Ethiopia is a captive business. The banks are formed either under religious, ethnic, political sentiments or other bands. So, Ethiopian banks and insurance companies lack the business mentality. If they had a business mentality, they will work with anyone who has a viable business idea. So I believe the government must delay the sectors opening up.

The NBE recently said mandatory merger and acquisitions will be forced on local banks, when the sector is opened up.

That is inevitable once the industry is opened up. Of course mergers can happen even before the opening up. For instance, the NBE raised the paid up capital to five billion. Those who failed to meet will have no option but merge. The NBE can also raise the reserve let’s say to 25 percent, from the 10 percent currently. Many banks could have merged. This way, competitive banks could be created.

Western banks, especially Europeans, strongly pushed Malaysia, Korea, South Korea, and Thailand to open up their financial sector. Once these Asian countries opened their financial industries, the western banks withdrew after joining the sector. The Asian economies were hit by financial crisis as a result.

But eventually the Asian tigers avenged the western banks. The 2007 financial crisis hit western banks, because the Asian tigers suddenly raised their banking capital. They intentionally gave more loans to American banks. Then the American and European banks disbursed those loans to mortgage, and small businesses. The western banks failed to pay their loans to the Asian tigers, taking revenge twenty years after the western banks played foul.

We do not need such turf wars.

The only reason Ethiopia’s economy is doing well after the war in the past two years, is because our financial industry is closed off. Our economy survived because the banking sector is not open.

If banking was opened to foreign competition, the economy could collapse, under this war. And had it been opened before the war, the economy would have collapsed by now. Foreign banks simply close and leave, when there is a war.

Many people say the banking industry should be opened. That is wrong. They do not know the exact capacity of local banks in surviving foreign competition. I have no confidence even in the CBE.

The CBE has a huge NPL owed by the government. The government owes over half a trillion birr. Unless it is fully paid, CBE will face many challenges.

So, I insist the banking industry should not be opened at least in the next three to four years. Local banks need up to four years to prepare. Mandatory merger is simple.

When the Home Grown Economic Reform was launched in 2019, the government promised to reduce the states hand in the economy, and reduce the pressure on CBE and domestic credit. Is there any progress?

The CBE is not giving loans to the government now. State pressure is reduced. The CBE has studied new organizational structure, and is implementing new business strategies. Before, especially during the previous regime, state banks give loans as if it is a budget. They do not collect the loan.

Do you follow up on CBE’s branches abroad?

We evaluate them during reporting. The bank has branches in Juba and Djibouti. The Juba branch is performing very well but the Khartoum branch was suspended while in the pipeline.

Did the CBE move from PEHA’s supervision, after it is placed under the EIH?

Currently, the CBE is in transition process, from PEHA to the EIH.

I heard SOEs will be categorized under three supervisory institutions according to their performance. These are the EIH, PEHA, and the LAMC. Is that true?

What I know is that there are SOEs going to the EIH, and the rest will remain under PEHA. The LAMC by itself is an SOE and is under PEHA’s supervisory. LAMC is under my supervision. The CBE, DBE, EIH, LAMC and national lottery, are under my directorate.

The EIH has recently on-boarded 27 SOEs, out of the 36 SOEs under PEHA. Does that mean they are completely out of PEHA?

The investment part of SOEs goes to the EIH, while the enterprise management aspect remains under PEHA. But so far, there is no definite decision on whether the selected SOEs completely move to the EIH, or partially. This is decided by the macroeconomic team of the PM.

Will all SOEs be listed on the stock market?

The plan was for the SOEs to list a certain percent of their value on the stock market. If SOEs like ET, ethio telecom and others trade 10 percent of their portion on the stock market, it builds the public’s confidence. But SOEs must meet stringent financial reporting systems.

I also hear that five percent of ethio telecom’s share will be sold on the stock market. SOEs that meet the right financial reporting system will be able to float shares on the stock market.

People are facing difficulties acquiring houses because real estate companies collect money from house seekers and disappear. The stock market will also solve this. Everything will take shape under the secondary market.

The government is allowing the establishment of new banks in the last two years. But lately it confirmed the opening up of the banking sector for foreigners. Isn’t this sending mixed signal?

Mergers can be done at any time. Then local banks can consolidate and ready for competition. PEHA is exemplary in merging CBB with the CBE six years ago. Private Banks must follow suit.

Local banks are in a comfort zone, registering lump profit, not because they are providing a class service. They are profiting because they are protected. Under state protection, they do not have to improve service. They survive at the expense of the client. Millions are saving in bank but only a few thousand get loans. All of this will change, once foreign banks come.

Yesuf Ibrahim is a founding member of the National Movement of Amhara (NaMA). He worked as the head of the strategic sector in the earlier stages of NaMA’s establishment. After its establishment, he worked as the head of the strategic sector for two years. After serving the organization as a vice chairman, he is currently working as the head of the party’s legal and ethical regulations and as a manager of the government’s property management authority. He received his LLM degree in law from Addis Ababa University and has worked as a law lecturer at a university. The Reporter’s Selamawit Mengesha sat down with Yesuf on issues concerning the party, region and the country at large.

The Reporter: How would you describe your participation from the time you first started working with the government as an opposition party, and the process until you became the manager of the government’s property management authority?

Yusuf Ibrahim: I have been heavily involved since the establishment of NaMA until its present stage. NaMA’s ideology is not an organization that paints itself as a liberator. It is synchronized with the people and the country.

Because the Amhara people have special problems and are being attacked by the constitution and narrative, protecting the people is one of the political targets. However, we have come to the historical notion that the attack on Amhara people is not something that has a special historical origin but an effort to destroy the country by making the community a victim.

The movement is one that could be traced back to colonialism. Weakening the beliefs, values, and social status of this community can be a way to destroy the country. Its origin is a colonial idea. Because of this ideology, a number of internal anarchist institutions were created.

By establishing such organizations, a political party based on identity has been established over time to save the Amhara people, who have suffered a lot. When the government moves into the phase of “change”, it is important to try because “change” has not yet been seen. When we look at the power alignment in Ethiopia, it is not a place where NaMA makes friends easily. In the course of time, after studying the intricate web of power, we analyzed the power that could become the friend of the enemy.

Compared to that, even if we can’t get along with everyone, we can work with anyone. As for figuring out to what extent and with whom, there are those who are known for backstabbing, so that’s a start. It was a timely analysis that was not particularly favorable to the Amhara. Therefore, it was established to fight anti-Amhara organizations.

Currently, even though it is an institution with many problems, we have an organizational position supported by a strategic document that we must work on together with the government. In general, it is necessary to work together with the government. When elections were planned to be held during COVID, there was pressure from many political organizations. Working together with the government was our own initiative.

We asked ourselves how we could safeguard the long-term interests of our country and people. We are a political organization and we take a position based on who we believe will betray us. We do this within the bounds of the law. It is necessary to work together with the government. They did not try to make it as big as NaMA, but there was pressure from other parties to make NaMA a part of the government, but the government did not want that. Regarding this, we explained to them that Prosperity is a traditional government.

This showed that the government was not proactive and did not identify its partners. As a party, it contributes greatly to the work of saving the country. We believe that we have especially united the people.

During this process, there was a conflict in the nature of misunderstandings between various issues, and because the problems of the parties and the government were not resolved quickly, it started to turn into a war.

With all of that happening, it was important to work with the government during that period. But keep in mind that working together with the government does not mean that we are the government but, in some cases, groundwork needs to be done. We had the idea that politics based on cooperation, not competition, was best suited for the landscape of the country.

Since the NaMA did not have a clear idea about working with the government (that is, we joined the government while the country was at war), we discussed it twice with the government when the issue was raised.

The matter has been tabled at the executive level. But it was fundamentally ignored by NaMA.

When the authority was given, I was called on the phone. I arrived in Gondar at 5 o’clock in the morning and was told that the appointment would be at 7:30. They have their own reasons for doing so. Since the appointment process was during the war, it was completed in secret until the end so as not to overwhelm the government.

On the side of the Prosperity Party, there was a bit of a misunderstanding because I received a call from the Addis Ababa city administration and then, on the same day, I received a call saying that they were looking for you for an appointment in the Amhara region; I made my own decision and chose Addis Ababa.

There is no problem with opposition parties working with the government. In Ethiopia, the process of democracy should gradually develop over time. Democracy needs to be improved by learning to work together.

In fact, it would be great if NaMA worked with the government. It would have been helpful if the lower level of government was more involved in areas such as kebeles and districts.

I made a proposal that if the government does not give us authority on the lower structure, we should give up big authority positions. But the party was not unified and could not consider the proposal.

NaMA is a party established to represent the people of Amhara. The Amhara people want you to be the voice of your party in any way. Working with the government means leading a multi-ethnic population, and haven’t you faced challenges in the middle?

This is also an issue of the reform process that the party intends to follow. The reform will work to clarify which level and which concept we are working on. There might be some changes in concept with the change of leadership.

It is about continuing to explore our strengths and solving our problems. The government does not exist only through the executive branch. The government has three branches and includes Parliament in the constitution.

We have representatives in the federal parliament in the state. The relationship between the party and its members at the top should be defined. As a party leader, when we work with the government, it must be based on the party’s principles. If I am going to move in that way, we should either leave the party or leave the leadership of the government.

There should be a strict procedure. In the current state of affairs, the federal structure that our party and the country are led by all is based on ethnic lines.

The constitution itself rarely even uses the word “citizen.” We want this to be liberal over time. We follow the philosophy that individual citizens should be the foundation of democracy. We want our organization to be a center for correcting the many mistakes made by extremists.

It should not be restricted only to Amhara. It should also be connected with other communities. Once this is fixed, the Ethiopian status will be announced. We believe that when we work as a party and as Amhara, we are operating as Ethiopia.

The Amhara community is the Ethiopian community. It has been pushed by many things. We are not saying it should be paid by revenge. We only remember the past to be able to fix the future. We do not believe that our people would be harmed if equality and freedom prevailed in Ethiopia. This is a modern principle. I do not believe that I am an advocate for the politics of a community at any time. As a company, we believe that we work for all Ethiopians.

It is one of the pillars of our society that it should not be affected by special circumstances. We want to be seen from the Ethiopian perspective. We do not want to separate Amhara. We want it to be governed by justice along with its fellow citizens. Amhara is affected in the same way that the rest of society is, but the incorrect narrative that has developed over time must be corrected. The question of who is the representative of political philosophy is bound to arise. Since NaMA is of Amhara origin, it is organized accordingly.

It is necessary to adapt to solve this problem for the time being. I think NaMA can adapt to all the parties. While working here, I am color-blind. I have neither the capacity nor the desire to take sides by saying who belongs to which nation. I also do not share such political views. We think that the perceptions created on us by the TPLF is in conflict with the people of Tigray. This is because the TPLF has been equating itself with the people of Tigray. But we still see their segregation. We believe that the TPLF is a criminal group. During the century, narcissistic institutions were created to hold back society and live for profit.

A while ago, it was tiring to find the issues that separate the people of Tigray and the people of Amhara. It was bound by various social, geographic, religious, and economic ties. We have to solve the existing problems with different justifiable methods. As it is known in Ethiopia, we do not accept ethnic politics. Therefore, I am running the people’s question in alignment with the government’s work.

Is there a division between the leadership of the government and other members of the party? What kind of situation is NaMA in right now?

Currently, changes are made every time political dynamism changes. The struggle is that when more energy is needed, society needs change. We have gone through many problems in our struggle for organization and society.

As the country’s problems continue to expand, members of the family are always at war. Therefore, leaders and members do not meet regularly. NaMA’s children are dying on the war fronts.

Don’t ask me how a peaceful party can fight with weapons. Since the declaration of seclusion, there has been a call to participate in the war. War has been waged on the Amhara people directly.

There are NaMA members in Raya, Wolkait, and in all the districts where there were members that were killed while in command of the brigade. There are several fighters in the structure. Therefore, the central one, the one at the top of each leadership, and the one at the bottom are not formally connected; we are connected informally.

During the second round of fighting, the party did not have a central committee or executive meeting for four months. Many gaps were created during that time, and it is not possible to update regularly. Politics brings the change of opinion closer to you when you meet and update regularly.

However, the more it is separated, the more the case is defined. So far, we’ve been supporting the idea that had majority support in debates. I have never seen a decision made without the approval of NaMA members.

Because we do not meet regularly, we have lost the opportunity to make decisions through debate and consensus. There were talks of NaMA coming into government appointments without the party’s consent, but in the process, although there were violations of discipline, the matter was adopted at the central committee level and this concept of working together will hopefully continue in the future.

The forces that wanted change were created in NaMA. First, there was a question that you should not lead the party part-time while in government, as the party requires a full-time dedication.

We will restructure. The party is a movement, and a movement needs to open up. It is not just a random party in power. Until the struggle reaches a certain level, the movement will open its doors and attract new talents, and it is not feasible to say that I will remain on the throne of the establishment once it is over. It is not correct, and it is not the principle of our struggle either.

People feel worried if there is no open discussion. There will be people who want to make the party a powerhouse. But in the end, the contradictions could not be easily reconciled.

On the other hand, it has shown differences in the way we see politics. But it is only in the top management that the difference should be noted. A certain difference was created between the Central Committee and the Executive Committee with only 10 to 20 people. There is no difference in the bottom structure of the broad members.

Due to Bahir Dar’s protest, I resigned on my own accord and changed from the position of vice chairman to the law department. What the party wants is not the change of one person or two. They say the movement wants to change from top to bottom. And this is their right.

An inquiring generation should be encouraged. There were misunderstandings with the top management. It deviated from NaMA and the general concept of democracy, which did not accept the reform and were going through a process that did not encourage internal democracy.

It is not a question of whether we like or hate individuals; it is a matter of history. It is the struggle of our people. It doesn’t define division for me. It is fundamentally settled by law. The structure is not split.

The main foundation is structure. I don’t think that the creation of division in the leadership of two or three people will divide the structure. We intend to hold a general assembly by October, which will hopefully restore NaMA.

Will the party become more organized by resolving the controversy within NaMA?

NaMA will come prepared. This happens at any party because it is a massive collection. The party needs time. The fight will then go into negotiations. The negotiation will be based on the concept of transitional justice from our point of view. There are a lot of processes that go through both material and human life. All of that should be resolved.

Politically, where are we going? Where are we going as a country and what is our collective ambition? NaMA must be prepared for this soon.

There are those who have applied what we brought as an idea to Ethiopian politics, which shows NaMa’s power to exert great pressure. After many pushes, debating and explaining to the people of Ethiopia, if politics is about to bear fruit, it will not happen unless the party exists.

There may be individuals with egos within the party leaders. They should be dealt with on the inside first. We were hoping that it wouldn’t show on the outside.

Most of the leadership and central committee members have petitioned the General Assembly’s request. A petition has been filed for reform. Yet undisciplined work is being done against the will of the people and the structure of the organization. That should be corrected. They are all being looked at from every angle.

Let us come to the current national issues. We have been at war for the past two years. Various efforts have been made to resolve the war peacefully, but another war broke out. Can you explain to us the whole political process and what Ethiopia’s politics should be in the future?

NaMA wants Ethiopian politics to be based on citizenship. Ethnic politics means a gathering of extremists where everyone who is offended hides. The TPLF and ONG should be held accountable for the Ethiopian-ism they attacked. It is a country known for caring and living together. Politicians must engage in a certain strategy. The structure should not be manipulated as intended.

NaMA will always cooperate with forces that can weaken the TPLF. As the TPLF has been in politics for a long time and has led the country, it must correct the mistakes of the past by deciding which is the most viable path for the future. They could not think of a way that would benefit the people of Tigray, whom they think they represent.

I do not think that the separation of the Amhara and Tigray peoples, a society that has lived together for many centuries and is bound by religion and culture, will achieve the goal. The people of Tigray must show that they are not enemies to the Amhara community.

During the war process, NaMA has been doing many other things by standing with the defense force, delivering food and coordinating with the diaspora. When the Amhara region was in battle, it gave studies on why they should fight for a purpose. It was heavily involved throughout the war.

How and under what conditions do you think the negotiations should be conducted?

Conflict always ends in negotiation. Even if the TPLF itself thinks that we should be divided, it knows that they will lack both resources and manpower. The TPLF should not go any further on the path of brutality and revenge. Ethiopia should follow the liberal approach and solve its problems. The war against the TPLF was not for revenge but was brought on by themselves.

In my view, I want transitional justice to happen. It is not because I believe transitional justice would calm everything down, but because it is an option. Justice is being served now, not for revenge but to bring harmony and move forward.

Negotiations should be conducted for the sake of peace and justice, with the decision that it will not happen again in the future and that what happened in the past was not right.

But in Ethiopia, it is seen that negotiations are used as a plot resource. It has been observed that only if the power to be negotiated is dangerous and one party wants to survive, is the proposal submitted for negotiation.

That is why I am afraid that the proposal presented by the TPLF might be some sort of treason. The deal requires a genuine broker. Since the war will inevitably end in negotiations, it all depends on who comes up with the better negotiating package. There is a risk that the negotiator who believes in violence may resort to violence at the negotiating table.

The TPLF should not exist as a political force. It is difficult to say that the TPLF is deceiving all these people with mobilization. I think most of them believe it. While the party was scattered, the individuals in the party lined up, reorganized, and attacked the defense force.

Such regeneration should not be ignored. The security guarantees should be adjusted and then they can enter into negotiations. A ceasefire is one way it can be done. But beyond that, there must be other stakeholders. The negotiations that should have been entered into after the collapse of the Derg left us in the situation we are in now. I believe that the Amhara region should have a negotiator on their behalf.

In the end, it should be known what level our politics should be at. Any person should be able to go and live in the area they want without being displaced from place to place because of ethnicity.

The TPLF has the capacity to rebel, not organize and re-enter. War itself should not be based on ethnicity. Who will benefit from this war?

There is no need to pretend like there is a war between two different countries. Both must work together. The negotiations must be conducted in moderation. Negotiations range from a ceasefire to a new proposal.

Although the African Union has little experience, it must mediate. They should all enter into the negotiation with good intentions. The very idea of secession is unethical.

To allow foreign banks, the banking proclamation, banking service code and the investment regulations must be revised. Especially, the code must allow banking for foreigners. The existing commercial code allows banking and insurance only for Ethiopians. Non Ethiopians cannot be investors, or operators.

Do you think the financial sector will be opened before five years?

I think so but I prefer it being delayed. All banks are giving loans to the service sector. Manufacturing and agriculture cannot grow unless we have banks that can give loans for long term projects. There are no consumer loans too.

Insurance companies complained over NBE’s order to direct 15 percent of their profit to DBE bond.

The rate has been reduced lately and the insurance companies agreed.

We must draw lessons from countries that have bridged the gender gap successfully. In some institutions, they say there are no women qualified to be board members. That is wrong.

Circulation of privately-owned papers is small and usually limited to Addis Ababa. Readership numbers are low.

A number of newspapers are now available online.

Ethiopian Reporter Business Page

MEDIA AND COMMINICATIONS CENTER (Ethiopian Reporter)

Media and Communication Center (MCC) a private limited media company established in 1995. Headquartered in Addis Ababa, Ethiopia MCC is the publisher of “Reporter” a bi-weekly Amharic, “The Reporter” a weekly English newspaper, a monthly Amharic and English magazines in both print and electronic versions.

Staff

MCC employs 137 permanent and part-time staff and has a sister company called the Horn of Africa Press Institute, which does research on Media related issues.

Mission and Vision

The Reporter’s motto “Free Press, Free Speech, Free Spirit” expresses the ideal of freedom that, journalists and editors, hope to enjoy and promote professional journalism.

MCC believes that it has responsibility to readers, the public, the people in and outside Ethiopia who rely on Reporter for news.

Each week we bring to the public critical stories without fear or favor and guarantee that our editorial choices about what to print are based on the importance and relevance of the topic to our country along with journalistic qualities. We refrain from any political, economic, or other unethical motivations.

We dedicate ourselves to help our readers in their effort to become an informed citizenry by giving as much information as possible.

We serve as a platform for the public’s thoughts, opinions and ideas by soliciting, accepting, reviewing and publishing letters and comments.

We intend to make our newspaper a model for those in our profession, a guide for novices.

Circulations and Reach

MCC distributes the newspapers and magazines to all business companies, governmental offices and non-governmental offices in Addis Ababa and all regional cities through subscription as well as street vendors.

Readers can access our news on our websites www.ethiopianreporter.com and www.thereporterethiopia.com and Reporter Tender Website www.reportertenders.com can download our apps from iTunes store and Google play to use on their android and IOS devices.

ሪፖርተር ዜና Media and Communication Center (MCC) a private limited media company established in 1995. Headquartered in Addis Ababa, Ethiopia MCC is the publisher of “Reporter” a bi-weekly Amharic, “The Reporter” a weekly English newspaper, a monthly Amharic and English magazines in both print and electronic versions.

Mission and Vision

The Reporter’s motto “Free Press, Free Speech, Free Spirit” expresses the ideal of freedom that, journalists and editors, hope to enjoy and promote professional journalism.

MCC believes that it has responsibility to readers, the public, the people in and outside Ethiopia who rely on Reporter for news.

Each week we bring to the public critical stories without fear or favor and guarantee that our editorial choices about what to print are based on the importance and relevance of the topic to our country along with journalistic qualities. We refrain from any political, economic, or other unethical motivations.

We dedicate ourselves to help our readers in their effort to become an informed citizenry by giving as much information as possible.

We serve as a platform for the public’s thoughts, opinions and ideas by soliciting, accepting, reviewing and publishing letters and comments.

We intend to make our newspaper a model for those in our profession, a guide for novices.

Circulations and Reach

MCC distributes the newspapers and magazines to all business companies, governmental offices and non-governmental offices in Addis Ababa and all regional cities through subscription as well as street vendors.

Readers can access our news on our websites www.ethiopianreporter.com and www.thereporterethiopia.com

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Policy caps foreigners’ acquisition in local banks to 40 percent

Local banks have less than one year to prepare

With an additional five percent stake allowed each for foreign individuals and foreign non-bank investors, the maximum stake local bank can sell to foreigners is capped at 40 percent.

Nigeria has confirmed that Ethiopian Airlines has been chosen as the core investor and partner for the country’s new flag carrier. Nigeria Air has been in the works for a while now and has slowly been approaching a full launch, pending support from partners. Ethiopian is Africa’s largest carrier and has shown a willingness to invest in new startups recently.

Foreign banks are allowed to acquire up to a 30 percent stake in local banks, according to a policy document approved by the Council of Ministers last month and obtained by The Reporter.

With an additional five percent stake allowed each for foreign individuals and foreign non-bank investors, the maximum stake local bank can sell to foreigners is capped at 40 percent.

Licensing foreign banks and implementation of the policy is slated to kick off in one year’s time from the ratification of the Banking Business Proclamation, whose amendment is already underway.

The highly confidential policy document has been off limits. The policy also excludes insurance and microfinance from the open-up initiative. It allows foreign banks to open a subsidiary firm and open branches in Ethiopia, besides giving an option to buy shares in local banks.

An NBE official that spoke to The Reporter confidentially stated that the window period for local banks until the liberalization takes off might not necessarily be one year.

“The Amendment to the Banking Business Proclamation is finalized and ready to be sent to the Council of Ministers. Most certainly, the proclamation will be approved in the current 2022/23 Ethiopian fiscal year. The licensing of foreign banks will start after the amendment of the banking business proclamation is finalized,” the official said.

The official believes that once the proclamation is amended, regulations and directives will follow, which can take six months or a year.

“We cannot say definitely that a bank will be opened up one year after the proclamation is finalized. It depends on our pace of finalizing the proclamation and the regulations and directives required to implement it,” the official added.

Foreign banks are also authorized to open a commercial representative branch in Ethiopia, a permit that was already given to some multinational lenders like Standard Bank, Egypt’s Commercial International Bank (CIB) and KCB Group.

The opening-up policy document was not revised after the Council ratified it. Comments forwarded by the Council are also not included, according to The Reporter’s sources.

The NBE will decide on the majority of the details regarding the implementation of the opening-up policy with the details to be stated in the upcoming proclamation, regulations, and directives, according to the NBE official.

“The policy is more of a broad perspective. Foreign banks, individuals, and strategic investors are allowed, but the exact ratio will be determined. Changes to investment regulations are not always necessary. The banking proclamation is sufficient by itself,” added the official.

Local banks are already in hot water since the Council of Ministers disclosed the approval of the open-up policy last month. Presidents of local banks The Reporter talked to, who did not have access to the policy documents so far, argued most of the decisions stated in the policy document.

“Of the four modalities, subsidiary and branch will have no benefit for Ethiopia. They are the biggest lunacy of Ethiopian government decisions. They will neither bring foreign currency nor improve the efficiency of Ethiopia’s banking industry. The government is wrong to assume local banks lack corporate culture and skills. I am sure if academicians and banking practitioners see the policy document, they will not approve it,” said a private bank president with two decades of experience.

He says the government committed two major breaches. “First, the government did not identify what it was really seeking to do to open the banking industry. Is it foreign exchange revenue, access to finance, efficiency, technology, or others? Then the government should have done intensive studies to determine which venue is suitable for that objective,” the bank president said.

“Secondly, the government did not discuss it with local banks and other stakeholders. The NBE did not discuss anything with us. The policy document is still kept a secret even after the Council approved it. It must be posted on the council’s website as soon as possible,” the president added.

Another bank president appreciated the decision to cap foreign bankers’ acquisitions. “Capping maximum equity local banks can sell to foreigners to minority shareholding ratios is very good. It will protect local shareholders and maintain the rights of local bankers. The issue with this equity acquisition is that there is no system in place to assess the value of local bank shares.”

“Since there is no stock market in Ethiopia, valuation of local banks is done traditionally. None of the local banks are listed on any stock market. The existing share market valuation system is traditional. Currently, shares of each of the local banks do not reflect the exact values. So there must be a new valuation system,” said the bank president.

On the other hand, he contends that valuing local banks at a time of peak birr depreciation will be detrimental to Ethiopia but beneficial to foreign banks and investors.

“The valuation will be high in terms of birr attributable to the devaluation. But in terms of dollars, the value is not large. Therefore, foreign banks and investors can acquire the stakes at a cheaper price in dollars. The injection of foreign banks into local banks will escalate inflation in Ethiopia because foreign investors will buy the shares with forex. But that forex is injected into the economy in birr, which is high in number. So the immediate impact of the banking opening-up will be higher inflation. I do not understand why Ethiopia keeps devaluing Birr,” he added.

The bank president also appreciated the one-year window period for preparation but questioned why private local banks have to work with the NBE to devise their competition strategy.

However, all the bank presidents rejected the government’s decision to ratify the open-up policy document without consulting them.

“The NBE did not even discuss with us the Banking Business Proclamation amendment underway, let alone the new policy. Many laws were introduced without consultation with bankers and have proved harmful to us. I understand the political and diplomatic benefits of this policy, which is why the Council hurried to ratify it without consulting us,” added the banker with two decades of experience.

For him, the policy is made to appease western countries, which are pressuring the government.

“Banking opening up is not as simple as opening up telecom, aviation, or any other sector. Ghana and Kenya sold their banks and became poor, overtaken by India, Pakistan, the UK and other countries’ banks. Many other countries, including in Africa, opened their banks after intensively deliberating on it and preparing a detailed catalogue of the modalities,” said the banker. “Nigeria, Ghana, Kenya, South Africa, Morocco, and Egypt all opened their banking sectors after much deliberation. Not all of these countries were successful after opening their banks. Unless wisely managed, this opening up will also make Ethiopia poor,” he added.

Ethiopia has canceled its contract with a Chinese company exploring oil and gas in the country since 2013, the government announced on Wednesday.

Takele Uma, Ethiopia’s minister of mines and petroleum, said the deal with Chinese firm Poly-GCL was called off because of its “financial and organizational inability” to develop gas in the Ogaden Basin, a resource-rich area in eastern Ethiopia, according to state-affiliated news agency Walta.

The report said Poly-GCL was issued a letter of ultimatum in March that listed several conditions for the company to fulfill.

“In accordance with the successive notices the Ministry has issued in the past and in full compliance with the PPSAs and the laws of the land, the termination has now been fully effected,” Takele said on Twitter.

“As long as the financing that would enable to develop the oil and gas fields the Ministry is open for mutual and expeditious settlement,” he added.

Takele had previously hinted that Poly-CGL’s contract would be terminated, saying that Ethiopia was actively searching for international companies that could develop the Ogaden’s confirmed reserves of 7 trillion cubic feet of natural gas.

Nigeria has confirmed that Ethiopian Airlines has been chosen as the core investor and partner for the country’s new flag carrier. Nigeria Air has been in the works for a while now and has slowly been approaching a full launch, pending support from partners. Ethiopian is Africa’s largest carrier and has shown a willingness to invest in new startups recently.

Ready to take off?

According to ThisDay, Nigeria’s federal government has formally chosen Ethiopian Airlines (Ethiopian) as a partner for the long-awaited Nigeria Air. The deal includes a 49% equity share for the airline, joined by 5% from the government since the project is set to be private-public. Notably, Ethiopian is sticking to its policy of not investing cash into a new business.

Instead, the airline will leverage its technical prowess, an abundance of aircraft, and management skills to establish Nigeria’s first flag carrier in years. While yet to be formally confirmed, an initial pool of pilots is set to arrive in Addis Ababa for basic training for certification on the Boeing 737NG.

Nigeria has confirmed that Ethiopian Airlines has been chosen as the core investor and partner for the country’s new flag carrier. Nigeria Air has been in the works for a while now and has slowly been approaching a full launch, pending support from partners. Ethiopian is Africa’s largest carrier and has shown a willingness to invest in new startups recently.

Ready to take off?

According to ThisDay, Nigeria’s federal government has formally chosen Ethiopian Airlines (Ethiopian) as a partner for the long-awaited Nigeria Air. The deal includes a 49% equity share for the airline, joined by 5% from the government since the project is set to be private-public. Notably, Ethiopian is sticking to its policy of not investing cash into a new business.

Instead, the airline will leverage its technical prowess, an abundance of aircraft, and management skills to establish Nigeria’s first flag carrier in years. While yet to be formally confirmed, an initial pool of pilots is set to arrive in Addis Ababa for basic training for certification on the Boeing 737NG.

The next few months will tell us more in terms of the airline’s timeline for takeoff. With a fleet of Boeing 737s and Dash 8s, we can expect a domestic and regional focus in the initial months, a market that has no shortage of travelers in Nigeria. Keep an eye out for this up-and-coming carrier in the near future.

Mesenbet Shenkute Re-elected to Lead Addis Chamber for Second Term

The one and only mortgage bank, Goh Betoch Bank, concludes the financial year with bright books, meanwhile it in fact operated for few months.
The bank which officially opened its doors on October 25, 2021 disclosed that the financial year that ended on June 30, 2022 was primarily used to finalize the formation process and create operational capacities like recruiting personnel, providing trainings, emplace core banking and data center facilities and others.
In the first months, the mortgage bank was also fully working on a five year strategy that was conducted in collaboration with HST Consulting PLC, a prominent consultancy firm.

Mulugeta Asmare, founding President of Goh Betoch Bank, said, adding, “We have also provided services to customers and have been able to mobilize deposits, provide loans, as well as facilitating some other operations like forex.”

The bank that has four branches including the one in Dire Dawa began providing loans in the fourth quarter of the financial year and disbursed over 300 million birr in this short period, while the deposit mobilization was about 260 million birr.
62 percent of Goh’s deposit mobilization is tending to savings for mortgage, which is its specialization even though it provides other basic commercial banking services.

In the financial year under review, the bank was able to conclude under a positive balance sheet, which is not common in the sector, “Compared with the period where we commenced our real operations, such types of success is quite rare.”
“We have been working to manage our expense. Thus for the closed period, we have attained to cover our costs including organizational expenses that were incurred starting from the under-formational processes, which started in 2019,” the President said.

“Despite working for a few months under limited scale, our income has surpassed the expenses, reeling in profits of 6.3 million birr,” he explained.
As a mortgage firm, the bank may not have a priority to run extraordinary ways of opening branches and in the current financial year it has targeted to double its branch number to including major cities like Hawassa and Bahir Dar.
Currently, the bank that has 127 staffs has four branches in Addis Ababa and Dire Dawa.

The Reporter Ethiopia

Patrick Hicks is a born-and-bred Texan from Waco. Fasicka Hicks is from Addis Ababa, the capital of Ethiopia. They met in 1997 after she immigrated to Texas.

Both of them liked to cook, and Patrick’s barbecue became a favorite of Fasicka’s Ethiopian family. Seeing her family’s delight gave Fasicka an idea.

The idea soon blossomed into Smoke N Ash, but it remained traditional Texas BBQ until 2019 when Fasicka decided to add Ethiopian options to the menu — and they soon became popular items.

With customers enjoying the two tastes together, the couple decided just having the meal share the same plate wasn’t enough. They decided to combine the flavors in the same recipe.

“And I was tellin’ him, ‘Hey, you know what? We can make money sellin’ this food.’ So we bought a trailer and made some extra money on the weekends. Before we know it, we start forming lines because people look forward to our cooking every weekend,” Fasicka recalled.

To guarantee authenticity, Fasicka’s sister gathers Ethiopian spices in Addis Ababa and ships them to Texas—the result is perhaps the only Ethiopian-Texas barbecue on the planet.

The Texas-Ethiopian platter is the signature dish at Smoke N Ash. American barbecue staples like brisket to catfish to Texas toast, as well as Ethiopian dishes like chicken doro wat are on the menu.

The couple says the success behind their restaurant isn’t the food but what it means to them.

“When it comes to food for me, it’s just about togetherness. You work on it with love and care, and you make it to be the best thing on the plate, on the table,” Fasicka said.

The couple says the success behind their restaurant isn’t the food but what it means to them.

“And I was tellin’ him, ‘Hey, you know what? We can make money sellin’ this food.’ So we bought a trailer and made some extra money on the weekends. Before we know it, we start forming lines because people look forward to our cooking every weekend,” Fasicka recalled.

Safaricom prepares to switch on Addis in early October

The amended National Payment Proclamation requires foreign and local fintech operators, including mobile money service providers, to pay a license fee regularly. The proclamation, which was passed by the Council of Ministers last month, is expected to be ratified once Parliament is back from recesses.

Officials at the central bank told The Reporter that “the amount is not fixed. It will be stated in the directives of the proclamation. We are currently finalizing the directive required to put the proclamation into effect.”

The amendment of the 2011 proclamation is necessitated to open the mobile money sector to foreign operators. This came especially after Safaricom Ethiopia requested to bring onboard its mobile money arm, Mpesa.

However, Mpesa, a Kenyan mobile money service provider awaiting the amendment of the National Payment Proclamation, is unhappy with the requirement for a license fee, sources close to the matter told The Reporter.

Mpesa is already undertaking preparations to enter the Ethiopian market after government officials gave the green light last year. Managers of Safaricom Ethiopia also confirmed to The Reporter that technical work is already afoot.

“Mpesa has already started building the backdoor software developments. At the beginning, Ethiopian officials told us there would be no license fee for Mpesa. But now, they are telling us there will be a license fee,” complained an official working with the Safaricom Ethiopia, linking the inconsistency with the ebbing Ethiopia’s forex reserve.

However Tewedaj Eshetu, public relations and communication manager at Safaricom Ethiopia, said, “We are waiting for the proclaimation to be ratified.”

Managers of local mobile money companies believe the license fee is a global trend and the amount is not as large as many fear.

“The NBE consulted with owners of mobile money companies before approving the amended Payment System Proclamation. Comments and complaints were included during the stakeholders’ discussion on the draft document,” said a manager of a local mobile money company.

On the other hand, Safaricom Ethiopia is currently preparing for a wide service provision.

Safaricom will launch commercial service in Addis Ababa at a national level in October, according to Tewedaj, though she refrained from disclosing the exact date.

However, sources close to The Reporter disclosed that the launch date is slated for October 6, 2022. A grand ceremony in the presence of higher Ethiopian officials and top management of the five consortiums of Safaricom Ethiopia Plc is expected to be held on the day.

Safaricom launched its first service in Dire Dawa town last month, with a plan to reach 25 cities, including Addis Ababa, by April 2023.

Ever since the start of a brutal war between the government of Ethiopia and the forces of Tigray People’s Liberation Front (TPLF) following the latter’s unprovoked attack on the troops of the Northern Command of the Ethiopian National Defence Forces (ENDF) based in the northern region of Tigray on November 3, 2020, Ethiopia has been subjected to an unrelenting campaign of hybrid warfare waged by a set of actors with vested interests. The campaign has comprised of different actions including an informational warfare depicting Ethiopia in a negative light, a coordinated diplomatic pressure aimed at coercing Ethiopia into submitting to the demands of the TPLF as well as imposing punitive sanctions on the country and withdrawing its benefits under the United States’ tariff-free African Growth and Opportunity Act (AGOA). Western governments and such institutions as the U.N., Western mainstream media, humanitarian aid agencies, human rights “defenders” and think tanks figure prominently among the slew of actors which have been involved in the grey-zone tactics being pursued against Ethiopia.

The latest example of the diplomatic pressure being brought to bear on Ethiopia is the release this week of a politicized report by the International Commission of Human Rights Experts on Ethiopia (ICHREE). Derided by any Ethiopians as a braze attempt whose overarching goal is to demonize the Ethiopian government, the ENDF, the Amhara Militia and Fano, the report’s “findings” gloss over documented atrocities perpetrated by the TPLF. The report says the Commission has reasonable grounds to believe that the ENDF and Eritrean Defense Forces (EDF) committed a catalogue of egregious crimes ranging from widespread extrajudicial killing and injuring of civilians to rapes and other forms of sexual violence against Tigrayan women and girls, and looting and destruction of civilian infrastructure. It also indicates there were reasonable grounds to believe that the Federal Government and allied regional State governments implemented a widespread range of measures designed to systematically deprive the population of Tigray of material and services indispensable for its survival, including healthcare, shelter, water, sanitation, education and food. As for the TPLF, it says Tigrayan Forces have also committed acts of rape and sexual violence, albeit on a smaller scale, and killed civilians and persons rendered hors de combat, looted, and damaged or destroyed civilian infrastructure and property in two towns in the Amhara region.

The ICHREE report is riddled with a raft of shortcomings that rob it of credibility. As the Ethiopian government says, “… the report was written in breach of all principles of professionalism, independence, impartiality, and standards of proof entailed in any such process under international practice”. The Commission, by its own admission, carried out a remote investigation into selected incidents and themes even as it excluded from its report the serious human rights and humanitarian law violations which could amount to war crimes and crimes against humanity in the Afar region. The omission of an entire region— whether by design, negligence or lack of capacity—from the Commission’s investigative work misrepresents the true state of things in the war-affected northern region of Ethiopia. It also constitutes a clear failure to “conduct a thorough and impartial investigation into allegations of violations and abuses of [international human rights law, international humanitarian law, and international refugee law in Ethiopia committed since 3 November 2020 by all parties to the conflict…] by building upon the report of the Office of the High Commissioner and the Ethiopian Human Rights Commission.” Moreover, the Commission’s use of language implying that the Ethiopian government has engaged in acts that may amount to ethnic cleansing is entirely unbefitting a human rights body and lays bare its political bent.

The Ethiopian government had rightfully condemned the decision to establish the ICHREE from the outset, describing it as being imposed on it without its consent and an unwarranted meddling into its internal affairs under the guise of protecting human rights. The Ethiopian Human Rights Commission also reserved criticism for the decision arguing the creation of a new body was repetitive, counterproductive to the ongoing implementation processes as per the recommendations of the joint investigation it undertook with the UN rights office into the alleged violations and abuses committed prior to the unilateral cease-fire declared by the Ethiopian government in June 2021, and further delayed redress for victims and survivors. In fact following the adoption of the joint investigative report, the Ethiopian government established the Inter-Ministerial Taskforce (IMTF) to comprehensively deliver on accountability and redress measures and initiated an independent criminal investigation. These flaws thus tends to undercut a fundamental principle of international law, namely that the primary responsibility for the promotion and protection of human rights rests with states themselves.

Western governments and such international institutions they control as the U.N. have a checkered history when it comes to the protection of human rights. Although they espouse human rights values in their rhetoric and policies, their excoriation of human rights violations are by and large is dependent on the extent to which other countries (or certain groups) are willing to obey their commands. Consequently, the horrendous human rights violations states and groups, such as the TPLF, that have cultivated friendly ties with the West or dutifully carry out the West’s bidding, commit are whitewashed or completely ignored. That is why the assertion that the ICHREE magnified the alleged atrocities committed by the Ethiopian government while making a perfunctory mention of the slaughtering of innocent civilians, rape and sexual abuse, use of child soldiers, pillaging, and destruction of civilian infrastructures the terrorist-designated group is guilty of would not be far off the mark. If the U.N. or for that matter any other international body tasked with advancing the protection of all human rights for all people, empowering people to realize their rights, and assisting those responsible for upholding such rights in ensuring that they are implemented, they must never be weaponized for political ends.

Budget allocated by the Ministry of Education for public universities has been utilized for political purposes, a report published by the Ethiopian Ethics and Anti-corruption Commission reads.

The Commission’s report, which was initiated to assess corruption risks in the private and public educational sector, highlighted a plethora of issues in both public and private-owned educational institutions which severely compromise the quality of education.

The report, which The Reporter has obtained, shows that there is a corrupted and political party-affiliated organizational system in educational development programs in those institutions. Illegal and inappropriate recruitment of teachers and other staff members, employing relatives and family members and recruitment of staff with fake educational certificates are also mentioned.

Many staff members of some educational institutions have employees with fake education certificates, while private university colleges are printing and selling degrees and diplomas like a good, and registrars purposely destroy students’ certificates and request money to replace them, according to the report.

It showed that while the university structure attempts to preserve the reputation of those who are in power, private schools, on their part, seek to preserve the interests of their students as commodity customers.

The absence of teachers from their classes, fake educational certificates, leaders’ engagement in theft, illegal employee recruitment and development, inappropriate procurement, lack of clear transparency and working system, inappropriate registrars’ staff members’ engagement malpractices, and tender embezzlement pose risks to educational quality, according to the finding.

The report underlines how colleges and university administrators compromised the quality of buildings by plotting and signing with the contractor to accept buildings before their completion date.

The study, which was conducted in 61 institutions, revealed a lack of internal financial control mechanisms, purchased goods of low quality, and budget allocation for politically motivated activities outside educational institutions’ key responsibilities.

Most of those educational institutions were reluctant to provide the requested information to undertake the assessment, unable to obtain accurate information and due to the absence of leaders in their working places, according to the finding.

The Reporter’s endeavors to get comments from the Ministry of Education bore no fruit as some officials were unable to respond.

However, Ethiopia’s education and training authority communication director, Tarekegne Geresu, speaking about private colleges, said that despite there being certain issues that might be considered findings, the authority has clear criteria to uphold rules and regulations in private schools.

Tarkegne also mentioned the authority’s ongoing efforts to identify and take serious measures against over 200 institutions, reaching up to the revocation of licenses and closure of institutions.

“After graduation, we provide authentication for every single degree certificate, and unless the authority certifies this certificate, employers should not recruit those with unverified certificates from private colleges,” Tarkegne told The Reporter.

Only seven insurers meet the new threshold

The National Bank of Ethiopia (NBE) raised the minimum paid-up capital of insurance firms by six-fold. The revised ‘Minimum Paid-up Capital for Insurance Company’, which is effective as of September 15, 2022, replaced the existing threshold introduced in 2013.

The new capital requirement to obtain a general insurance license is 400 million birr, up from 60 million birr. The minimum capital for long-term insurance licenses was also raised from 15 million to 100 million birr. A company needs to deposit 500 million birr in a closed account to obtain a license for both, which was 75 million birr under the old directive.

Existing insurance companies whose paid-up capital is below the new threshold are given a five-year window period to meet the new minimum threshold by the end of June 30, 2027. However, these insurers are required to submit an action plan to the NBE by October 16, 2022.

“There is plenty of time to fulfill the requirement. The minimum requirement was very low from the outset,” said Zafu Eyessueswork, a veteran in the industry and founder of United Insurance and Hibret Bank.

Fikru Tsegaye, an insurance profession known for his commentaries in the sector, also welcomed the decision.

“The inflation has been eating the capital of insurers. If you compare capital of insurance companies against dollar, it was declining, so the amendment is a step in a right direction,” said Fikru.

Out of the 18 existing insurance companies in the country, only seven have capital of more than 500 million birr, according to NBE’s report. The insurance industry has been struggling with low market penetration and declining premiums in a stiff competition for the limited market niche.

However, the old directive remains active for new insurance firms in the pipeline until September 15, 2023. This means organizers of new insurance firms can attain a license under the existing directive in the next year. A discussion is underway to adjust license fee required to acquire new license and renew existing ones. The fee is expected to be adjusted by 2000 percent, though that is still under discussion.

The new directive states that insurance companies in the process of share subscription that successfully collect a minimum paid-up capital of 60 million birr for general insurance business, 15 million birr for long-term insurance business, or 75 million birr for both, and submit a final application to NBE within one year after the effective date of the new directive, shall get the license.

Industry players called the new directive “hair-raising,” as the insurance industry’s growth remains nascent.

“Raising the minimum capital from 75 million to 500 million birr at once is very difficult. The new directive is inconsiderable to the difficulties the industry is facing. The industry has achieved very little capital growth in the past 20 years due to the nascent environment. The NBE itself has contributed to the weakness of the industry,” said an insurance consultant speaking to The Reporter regarding the new directive.

“The NBE was never giving appropriate attention to insurance, as the central bank was primarily occupied with banks. We have been requesting the government for the insurance industry to be regulated by a commission, authority, or agency separate from the NBE. We believe this will help the insurance industry to get better support and better attention,” the consultant explained.

Yesuf Ibrahim is a founding member of the National Movement of Amhara (NaMA). He worked as the head of the strategic sector in the earlier stages of NaMA’s establishment. After its establishment, he worked as the head of the strategic sector for two years. After serving the organization as a vice chairman, he is currently working as the head of the party’s legal and ethical regulations and as a manager of the government’s property management authority. He received his LLM degree in law from Addis Ababa University and has worked as a law lecturer at a university. The Reporter’s Selamawit Mengesha sat down with Yesuf on issues concerning the party, region and the country at large.

The Reporter: How would you describe your participation from the time you first started working with the government as an opposition party, and the process until you became the manager of the government’s property management authority?

Yusuf Ibrahim: I have been heavily involved since the establishment of NaMA until its present stage. NaMA’s ideology is not an organization that paints itself as a liberator. It is synchronized with the people and the country.

Because the Amhara people have special problems and are being attacked by the constitution and narrative, protecting the people is one of the political targets. However, we have come to the historical notion that the attack on Amhara people is not something that has a special historical origin but an effort to destroy the country by making the community a victim.

The movement is one that could be traced back to colonialism. Weakening the beliefs, values, and social status of this community can be a way to destroy the country. Its origin is a colonial idea. Because of this ideology, a number of internal anarchist institutions were created.

By establishing such organizations, a political party based on identity has been established over time to save the Amhara people, who have suffered a lot. When the government moves into the phase of “change”, it is important to try because “change” has not yet been seen. When we look at the power alignment in Ethiopia, it is not a place where NaMA makes friends easily. In the course of time, after studying the intricate web of power, we analyzed the power that could become the friend of the enemy.

Compared to that, even if we can’t get along with everyone, we can work with anyone. As for figuring out to what extent and with whom, there are those who are known for backstabbing, so that’s a start. It was a timely analysis that was not particularly favorable to the Amhara. Therefore, it was established to fight anti-Amhara organizations.

Currently, even though it is an institution with many problems, we have an organizational position supported by a strategic document that we must work on together with the government. In general, it is necessary to work together with the government. When elections were planned to be held during COVID, there was pressure from many political organizations. Working together with the government was our own initiative.

We asked ourselves how we could safeguard the long-term interests of our country and people. We are a political organization and we take a position based on who we believe will betray us. We do this within the bounds of the law. It is necessary to work together with the government. They did not try to make it as big as NaMA, but there was pressure from other parties to make NaMA a part of the government, but the government did not want that. Regarding this, we explained to them that Prosperity is a traditional government.

This showed that the government was not proactive and did not identify its partners. As a party, it contributes greatly to the work of saving the country. We believe that we have especially united the people.

During this process, there was a conflict in the nature of misunderstandings between various issues, and because the problems of the parties and the government were not resolved quickly, it started to turn into a war.

With all of that happening, it was important to work with the government during that period. But keep in mind that working together with the government does not mean that we are the government but, in some cases, groundwork needs to be done. We had the idea that politics based on cooperation, not competition, was best suited for the landscape of the country.

Since the NaMA did not have a clear idea about working with the government (that is, we joined the government while the country was at war), we discussed it twice with the government when the issue was raised.

The matter has been tabled at the executive level. But it was fundamentally ignored by NaMA.

When the authority was given, I was called on the phone. I arrived in Gondar at 5 o’clock in the morning and was told that the appointment would be at 7:30. They have their own reasons for doing so. Since the appointment process was during the war, it was completed in secret until the end so as not to overwhelm the government.

On the side of the Prosperity Party, there was a bit of a misunderstanding because I received a call from the Addis Ababa city administration and then, on the same day, I received a call saying that they were looking for you for an appointment in the Amhara region; I made my own decision and chose Addis Ababa.

There is no problem with opposition parties working with the government. In Ethiopia, the process of democracy should gradually develop over time. Democracy needs to be improved by learning to work together.

In fact, it would be great if NaMA worked with the government. It would have been helpful if the lower level of government was more involved in areas such as kebeles and districts.

I made a proposal that if the government does not give us authority on the lower structure, we should give up big authority positions. But the party was not unified and could not consider the proposal.

NaMA is a party established to represent the people of Amhara. The Amhara people want you to be the voice of your party in any way. Working with the government means leading a multi-ethnic population, and haven’t you faced challenges in the middle?

This is also an issue of the reform process that the party intends to follow. The reform will work to clarify which level and which concept we are working on. There might be some changes in concept with the change of leadership.

It is about continuing to explore our strengths and solving our problems. The government does not exist only through the executive branch. The government has three branches and includes Parliament in the constitution.

We have representatives in the federal parliament in the state. The relationship between the party and its members at the top should be defined. As a party leader, when we work with the government, it must be based on the party’s principles. If I am going to move in that way, we should either leave the party or leave the leadership of the government.

There should be a strict procedure. In the current state of affairs, the federal structure that our party and the country are led by all is based on ethnic lines.

The constitution itself rarely even uses the word “citizen.” We want this to be liberal over time. We follow the philosophy that individual citizens should be the foundation of democracy. We want our organization to be a center for correcting the many mistakes made by extremists.

It should not be restricted only to Amhara. It should also be connected with other communities. Once this is fixed, the Ethiopian status will be announced. We believe that when we work as a party and as Amhara, we are operating as Ethiopia.

The Amhara community is the Ethiopian community. It has been pushed by many things. We are not saying it should be paid by revenge. We only remember the past to be able to fix the future. We do not believe that our people would be harmed if equality and freedom prevailed in Ethiopia. This is a modern principle. I do not believe that I am an advocate for the politics of a community at any time. As a company, we believe that we work for all Ethiopians.

It is one of the pillars of our society that it should not be affected by special circumstances. We want to be seen from the Ethiopian perspective. We do not want to separate Amhara. We want it to be governed by justice along with its fellow citizens. Amhara is affected in the same way that the rest of society is, but the incorrect narrative that has developed over time must be corrected. The question of who is the representative of political philosophy is bound to arise. Since NaMA is of Amhara origin, it is organized accordingly.

It is necessary to adapt to solve this problem for the time being. I think NaMA can adapt to all the parties. While working here, I am color-blind. I have neither the capacity nor the desire to take sides by saying who belongs to which nation. I also do not share such political views. We think that the perceptions created on us by the TPLF is in conflict with the people of Tigray. This is because the TPLF has been equating itself with the people of Tigray. But we still see their segregation. We believe that the TPLF is a criminal group. During the century, narcissistic institutions were created to hold back society and live for profit.

A while ago, it was tiring to find the issues that separate the people of Tigray and the people of Amhara. It was bound by various social, geographic, religious, and economic ties. We have to solve the existing problems with different justifiable methods. As it is known in Ethiopia, we do not accept ethnic politics. Therefore, I am running the people’s question in alignment with the government’s work.

Is there a division between the leadership of the government and other members of the party? What kind of situation is NaMA in right now?

Currently, changes are made every time political dynamism changes. The struggle is that when more energy is needed, society needs change. We have gone through many problems in our struggle for organization and society.

As the country’s problems continue to expand, members of the family are always at war. Therefore, leaders and members do not meet regularly. NaMA’s children are dying on the war fronts.

Don’t ask me how a peaceful party can fight with weapons. Since the declaration of seclusion, there has been a call to participate in the war. War has been waged on the Amhara people directly.

There are NaMA members in Raya, Wolkait, and in all the districts where there were members that were killed while in command of the brigade. There are several fighters in the structure. Therefore, the central one, the one at the top of each leadership, and the one at the bottom are not formally connected; we are connected informally.

During the second round of fighting, the party did not have a central committee or executive meeting for four months. Many gaps were created during that time, and it is not possible to update regularly. Politics brings the change of opinion closer to you when you meet and update regularly.

However, the more it is separated, the more the case is defined. So far, we’ve been supporting the idea that had majority support in debates. I have never seen a decision made without the approval of NaMA members.

Because we do not meet regularly, we have lost the opportunity to make decisions through debate and consensus. There were talks of NaMA coming into government appointments without the party’s consent, but in the process, although there were violations of discipline, the matter was adopted at the central committee level and this concept of working together will hopefully continue in the future.

The forces that wanted change were created in NaMA. First, there was a question that you should not lead the party part-time while in government, as the party requires a full-time dedication.

We will restructure. The party is a movement, and a movement needs to open up. It is not just a random party in power. Until the struggle reaches a certain level, the movement will open its doors and attract new talents, and it is not feasible to say that I will remain on the throne of the establishment once it is over. It is not correct, and it is not the principle of our struggle either.

People feel worried if there is no open discussion. There will be people who want to make the party a powerhouse. But in the end, the contradictions could not be easily reconciled.

On the other hand, it has shown differences in the way we see politics. But it is only in the top management that the difference should be noted. A certain difference was created between the Central Committee and the Executive Committee with only 10 to 20 people. There is no difference in the bottom structure of the broad members.

Due to Bahir Dar’s protest, I resigned on my own accord and changed from the position of vice chairman to the law department. What the party wants is not the change of one person or two. They say the movement wants to change from top to bottom. And this is their right.

An inquiring generation should be encouraged. There were misunderstandings with the top management. It deviated from NaMA and the general concept of democracy, which did not accept the reform and were going through a process that did not encourage internal democracy.

It is not a question of whether we like or hate individuals; it is a matter of history. It is the struggle of our people. It doesn’t define division for me. It is fundamentally settled by law. The structure is not split.

The main foundation is structure. I don’t think that the creation of division in the leadership of two or three people will divide the structure. We intend to hold a general assembly by October, which will hopefully restore NaMA.

Will the party become more organized by resolving the controversy within NaMA?

NaMA will come prepared. This happens at any party because it is a massive collection. The party needs time. The fight will then go into negotiations. The negotiation will be based on the concept of transitional justice from our point of view. There are a lot of processes that go through both material and human life. All of that should be resolved.

Politically, where are we going? Where are we going as a country and what is our collective ambition? NaMA must be prepared for this soon.

There are those who have applied what we brought as an idea to Ethiopian politics, which shows NaMa’s power to exert great pressure. After many pushes, debating and explaining to the people of Ethiopia, if politics is about to bear fruit, it will not happen unless the party exists.

There may be individuals with egos within the party leaders. They should be dealt with on the inside first. We were hoping that it wouldn’t show on the outside.

Most of the leadership and central committee members have petitioned the General Assembly’s request. A petition has been filed for reform. Yet undisciplined work is being done against the will of the people and the structure of the organization. That should be corrected. They are all being looked at from every angle.

Let us come to the current national issues. We have been at war for the past two years. Various efforts have been made to resolve the war peacefully, but another war broke out. Can you explain to us the whole political process and what Ethiopia’s politics should be in the future?

NaMA wants Ethiopian politics to be based on citizenship. Ethnic politics means a gathering of extremists where everyone who is offended hides. The TPLF and ONG should be held accountable for the Ethiopian-ism they attacked. It is a country known for caring and living together. Politicians must engage in a certain strategy. The structure should not be manipulated as intended.

NaMA will always cooperate with forces that can weaken the TPLF. As the TPLF has been in politics for a long time and has led the country, it must correct the mistakes of the past by deciding which is the most viable path for the future. They could not think of a way that would benefit the people of Tigray, whom they think they represent.

I do not think that the separation of the Amhara and Tigray peoples, a society that has lived together for many centuries and is bound by religion and culture, will achieve the goal. The people of Tigray must show that they are not enemies to the Amhara community.

During the war process, NaMA has been doing many other things by standing with the defense force, delivering food and coordinating with the diaspora. When the Amhara region was in battle, it gave studies on why they should fight for a purpose. It was heavily involved throughout the war.

How and under what conditions do you think the negotiations should be conducted?

Conflict always ends in negotiation. Even if the TPLF itself thinks that we should be divided, it knows that they will lack both resources and manpower. The TPLF should not go any further on the path of brutality and revenge. Ethiopia should follow the liberal approach and solve its problems. The war against the TPLF was not for revenge but was brought on by themselves.

In my view, I want transitional justice to happen. It is not because I believe transitional justice would calm everything down, but because it is an option. Justice is being served now, not for revenge but to bring harmony and move forward.

Negotiations should be conducted for the sake of peace and justice, with the decision that it will not happen again in the future and that what happened in the past was not right.

But in Ethiopia, it is seen that negotiations are used as a plot resource. It has been observed that only if the power to be negotiated is dangerous and one party wants to survive, is the proposal submitted for negotiation.

That is why I am afraid that the proposal presented by the TPLF might be some sort of treason. The deal requires a genuine broker. Since the war will inevitably end in negotiations, it all depends on who comes up with the better negotiating package. There is a risk that the negotiator who believes in violence may resort to violence at the negotiating table.

The TPLF should not exist as a political force. It is difficult to say that the TPLF is deceiving all these people with mobilization. I think most of them believe it. While the party was scattered, the individuals in the party lined up, reorganized, and attacked the defense force.

Such regeneration should not be ignored. The security guarantees should be adjusted and then they can enter into negotiations. A ceasefire is one way it can be done. But beyond that, there must be other stakeholders. The negotiations that should have been entered into after the collapse of the Derg left us in the situation we are in now. I believe that the Amhara region should have a negotiator on their behalf.

In the end, it should be known what level our politics should be at. Any person should be able to go and live in the area they want without being displaced from place to place because of ethnicity.

The TPLF has the capacity to rebel, not organize and re-enter. War itself should not be based on ethnicity. Who will benefit from this war?

There is no need to pretend like there is a war between two different countries. Both must work together. The negotiations must be conducted in moderation. Negotiations range from a ceasefire to a new proposal.

Although the African Union has little experience, it must mediate. They should all enter into the negotiation with good intentions. The very idea of secession is unethical.

Olufunso Somorin (PhD)

Olufunso Somorin (PhD), regional principal officer of climate change and green growth for the eastern Africa region at the African Development Bank (AfDB), was in Addis Ababa to participate in a high-level technical conference on climate change aimed at summarizing takeaways for the upcoming COP27 conference. He presented his research titled “Adaptation Agenda: Beyond COP27” during the meeting on September 13 at the Hyatt Regency in Addis Ababa. Ashenafi Endale of The Reporter sat down with the expert to learn more about initiatives underway to lessen the effects of climate change on the global south and the rest of the world.

The Reporter: Africa emits only four percent of the global Greenhouse Gas emmisions (GHG), so why should Africa bear the burden of climate damage caused by the rest of the world?

Olufunso Somorin: Africa’s total GHG emissions are 3.8 percent. Compared to countries such as the US, a region like Europe, or even a country like China, this is very low for a continent of over one billion people. Africa is not responsible for climate damage.

However, when it comes to the impact of climate change, Africa is the most vulnerable. That is why more conversation is crucial to changing the global climate change discourse.

The region that is the least responsible is the region that is the most affected.

How much of their GDP are African countries losing to climate change?

The impact is already affecting the African population, economies, infrastructure, etc. The development we have achieved so far is under enormous threat due to climate change.

Every African country spends anywhere between two percent to 10 percent of its annual GDP dealing with the effects of climate change. This is an enormous resource that could be used to build more infrastructure, train more teachers, invest in energy and other development projects. The magnitude of climate change in African economies is hugely affecting development.

A large chunk of the available climate resources in Africa goes to mitigation. Currently, you are advocating shifting that resource from mitigation to adaptation. What exactly do we mean by climate adaptation projects?

There is a paradox that the region that needs the most global climate finance to respond to climate change is also the region getting the least.

Africa receives only three percent of global finance. This is despite the fact that Africa is the least contributor to the climate crisis but the most affected. This is what we need to change. Between 80 and 90 percent of the money that comes to Africa is used to mitigate climate change. Of course, mitigation is also good for development. When you use renewable energy, you are increasing access to power.

But adaptation, which is implemented across many sectors, is much more rewarding. Our economies in Africa are very dependent on weather systems. Agrarian societies account for up to 80 percent of the population. The moment there is a change in weather, for instance, a five percent change in rainfall, can lead to a significant impact in crops, and instant impact on food security. If the rain is delayed just by a season, it has a direct impact on food security.

So adaptation entails doing agriculture correctly, using water resources appropriately, refraining from activities that affect rain, and changing one’s mindset in order to achieve a stable climate. Adaptation is not for one sector, it is for every sector. There is a possibility in every sector for adaptation.

How much is Africa spending on climate change, and how much of it is coming from local financial sources?

There is a data accuracy problem. There is a lot of funding and finance that many countries are undertaking to handle climate change. They are not reporting it. Keep in mind that African countries spend between two and 10 percent of their GDP to respond to climate change disasters. So the data is not perfect because they are not reporting it precisely.

Domestic resources for adaptation are still low. Of course, it is very much under-reported. Nobody wants a climate-resilient modern Africa. Nobody desires a prosperous and modern Africa. So it should be our desire and our job to be climate resilient. We already paid for it. Our responses must be structured, coordinated, and lasting.

Is humanitarian assistance mitigation or adaptation?

Humanitarian assistance is a short-term coping mechanism; hence, it is a mechanism. Adaptation is a continuous, long-term solution. You do not move from zero to a hundred at once. The greater the risk, the more we need adaptation.

So adaptation is always in relation to the risks at hand, so you cannot achieve the highest level of adaptation. People affected by climate change on the ground are coping every day. But those are short-term solutions. They cannot respond to larger pressures.

A humanitarian response, if it is to respond to a climate crisis, is an adaptation measure.

How can we shift from mitigation to adaptation?

We do not shift in a way that ignores mitigation. We allocate more values, resources, responses, institutional systems, and capacity for adaptation.

Have African countries approved the National Adaptation Finance Framework (NAFF) so far?

NAFF is an idea we are testing. In many countries, including Ethiopia right now, we have developed a number of policy documents on adaptation. We have a national adaptation program of actions (NAPA), national adaptation plans (NAPs), and an adaptation component in our NDCs. Ethiopia has a climate resilient green economy (CRGE) strategy. Apart from the NDC, there are a lot of adaptation plans in various sectors.

However, none of these plans specify where the money will come from. All countries, including Ethiopia, have the plans but lack the financing. That is why we are developing the framework.

For instance, if Ethiopia introduces a strategy that charges an additional two dollars per every tourist or traveler coming to Ethiopia, which the airline collects per ticket, and that two dollars goes to a climate resilient fund, that is an innovative way of raising money to finance adaptation. Ethiopia can also levy a 0.5 percent tax on every business operating in the agricultural sector, and we call it the ecological or agricultural productivity fund.

We can also formulate legal frameworks in which every private sector operator reports what they are doing on climate change. You give them a template for how they report. Then the finance is aggregated and channeled to adaptation. We are ultimately thinking of a national level adaptation approach.

There is no such thing as a climate change project. What we have is a “climate-informed development project.” That is very important. If we mainstream adaptation into all our development projects, that is how adaptation works.

Do you recommend mandatory finance contributions for the private sector and other institutions?

Consider it a business strategy. The financial framework in Ethiopia may be different from that in Kenya, Nigeria, or others. Adaptation is very local. Adaptation does not operate in a vacuum. Adaptation is nested in an institutional structure in place, social relations in a country, and state-society interactions. It is crucial to capture that and craft a financial strategy around it.

We must start thinking of adaptation as something critical for development. We have to find an innovative way of funding it.

How can the private sector turn the climate change crisis into a business opportunity?

The private sector itself depends on climate change. Climate change is a risk for the private sector too. By investing in adaptation, it is also a way for the private sector to guard its own investments and do sustainable business. Businesses are not completely insulated from the climate crisis. When they see that as a threat to their business and start to respond, businesses start to adapt.

The private sector is not exonerated. There are opportunities and advantages for the private sector to channel private capital into adaptability.

Do you think Africa is exploiting carbon trading?

The good thing about the carbon market is that even though it focuses on mitigation, it exists largely in sectors that are adaptability-oriented. Whether it is forestry, as in the African case, conservation, nature-based solutions, carbon trading can be an adaptation intervention. Reducing emissions is the core target of all NDCs, including Ethiopia.

Carbon trading is a good opportunity. The financial flow from the carbon market and investment can also trigger adaptation finance.

What do we expect from COP27?

Cop27 is very important for Africa, because we need to be able to make progress on the financial commitments that the developed countries have made. There is also something about capital that is additional and predictable.

We need capital in quantity and quality. We need a lot of money. Somebody can pledge a trillion dollars and put too many conditions on the table, so you may not get even five percent of it. In such cases, the money has the quantity side, but the quality side is very difficult.

Africa needs a climate adaptability roadmap. Climate action is just a basket containing mitigation and adaptability. The truth is that mitigation and adaptation are different. The approaches, strategies, implementation modalities, design, and projects are different.

What we need is an adaptation strategy cognizant of the African context that is structured and practical.

So in global climate finance, a specific resource for the adaptability finance segment is crucial.

One of the agendas expected at the COP27 is the issue of banning the extraction of fossil fuels. What is your reflection on this, as Africa is just beginning to extract its fuel resources?

It is still a conversation at this early stage. The global conversation at the climate conference is very cognizant of Africa’s concerns. When we say green energy, it is a gradual transition. You do not go from fossil fuel to green energy in one day. There has to be a gradual transition. Substitution for fossil fuel is in the long run. This plan must also capitalize on technology.

Do not forget that fossil fuel is a natural endowment for these countries. How do you tell countries like Angola, Nigeria, or others to go from burning fuel to 100 percent green? We need to clarify that. I do not think the global system is going to put a gun to your head. It is about placing attractive incentives in place, and support mechanisms, to make that gradual transition.

For African countries, they are not under any legal obligation to make that transition. There has to be an incentive and encouragement for it.

The decision made 13 years ago to commit USD 100 billion to Africa’s climate response remains a pledge. Now we expect more pledges at the conference. Why do we always believe in pledges that will not materialize?

The way global diplomacy works is that we must always agree to move forward. So there is an agreement in principle that USD 100 billion a year comes from developed countries. That is one side of the coin. The other question is, do they really actually deliver? Some countries did, and many did not. COP27 is expected to urge these countries to push for these pledges to be met.

Is there any mandatory legal framework or convention to make countries fulfill their financial obligations as per their contribution to GHG emissions?

Climate diplomacy does not work as expected. Probably global trade and other sectors based on international laws. But for climate issues, you need to reach consensus. Most of the time, you are not going to find a situation where there is a legal penalty. It is not an annual contribution and “if you do not pay, you go to jail.” There is no climate court. Countries must understand the value of those resources and their contribution to climate value.

Do you think the world needs green politics like in the 1980s and 1990s, or do you think the current climate crisis can be solved under the conventional mainstream political systems?

First, to be honest, we have made progress since. It might not be on the scale we anticipate. But we have made enormous progress by bringing people around the table. The fact that we are having conferences for parties to discuss climate is a good sign. Maybe developed countries might say “we pledged USD 100 billion for Africa annually. We managed 80 billion,” and they might promise to improve it.

That is why I call it a fragile win. It is not a complete win. But it is still a win.

Do we need something radical? The answer is no. We would not get that. Because global diplomacy does not work around radicalism, it works around building consensus on the solution and the way forward. Then some countries may be part of the solution. The bigger part of diplomacy is that the further you talk about problems, the more you can talk about solutions.

But for many African countries, that is not enough and you want to see results on the ground. That is still a work in progress. So we expect a progressive step forward at COP27.

You recommended in your research that “debt for climate swap” as an alternative climate financing method. Do you think that can work, as many African countries, including Ethiopia, have piled up external debt?

These are the innovative climate financing schemes we are talking about. During the 2008/9 financial crisis, a country not far from here, Seychelles, was affected, as a service-based industry was severely affected at the time by the crisis. The Seychelles was able to negotiate “a debt for nature” swap. So a certain portion of its external debt was swapped for natural protection.

Basically, instead of paying the external debts back, you are allowed to use the money to do projects and investments that sustain the environment. We can do that as well. There is also a resilient bond, which is doable.

African countries need to come up with different innovative financing schemes because the one that works in one might not work in the other.

The fundamental departure is, let’s go beyond concessional loans and grants. Let us bring in equities, risk-sharing facilities, and all the types of financial instruments. Debt for nature swaps are just one instrument. I really like this scheme, and I would love to see it work in other parts of Africa.

Currently, the Horn of Africa is being rocked by an elongated climate crisis.

The Horn of Africa issue is a very special case. This is a region where some of the scariest challenges of climate impacts are unfolding. This is also one of the most resilient regions. In the past, regions had to deal with drought every decade or so. But this time, the frequency has been very high. Yet, many governments, institutions, and even the private sector are rising to the task of dealing with the crisis.

But we must start planning for the long term. Our actions in the Horn region are always reactive. We always start doing things after a drought has struck. Early warning systems, productivity optimization, water harvesting systems, and other readiness are very important ahead of the next drought. Proactive adaptation investment is very important instead of the reactionary type of investment.

In the Horn, resources are mobilized every time drought comes around. Why is it that a lasting solution remains difficult? What kinds of projects are needed?

Some drought resilience programs and projects are underway. The AfDB is one of the largest donors of drought-resilient programs in the Horn region. What is important is that we must coordinate projects at different levels.

Many initiatives are done at scattered levels, and they are not coordinated. Most importantly, we must push for proactive investments. We need more focus and investment on development spending so we can reduce our humanitarian spending.

Governments keep saying “we do not have money” and suddenly, when a crisis happens, they find money. Why do not we find the money before the drought strikes? That could have saved a lot of lives and damage.

Drought can happen, but it must not leave a humanitarian crisis behind. There are countries that face drought all year round. But we have to find different ways to change things.

Most importantly, we need partnerships at different levels.

Sewagegn Chane is director of the Public Financial Institutions supervisory department at the Public Enterprise Holding and Administration (PEHA), which regulates state-owned enterprises. Sewagegn is currently responsible for directly supervising the Development Bank of Ethiopia (DBE) and the Liability and Asset Management Corporation (LAMC). The Commercial Bank of Ethiopia (CBE), Ethiopian Insurance Corporation (EIC), and the National Lottery were also under his supervision, until they are transferred to Ethiopian Investment Holding (EIH) past May.

Working in public financial institutions for 30 years, Sewagegn initiated the establishment of the stock market in Ethiopia, which is bearing fruit eleven years after the first feasibility study. He was also vocal and key in rescuing the DBE, initiating Ethiopia’s first reinsurance company, Takaful (Islamic insurance), among others.

Sewagegn is also researcher at i-Capital Institute and organizer of the East African Finance Summit. Currently, he is leading two teams formed at the institute, studying the establishment of an investment and agricultural development banks in Ethiopia. Although he has been advocating ending state protection over the financial sector for years, he has currently changed his mind, just as Prime Minister Abiy Ahmed (PhD) authorized a policy that envisages opening up Ethiopia’s financial sector to foreign competition. Sewagegn believes the banking sector should remain closed at least for the next few years. The Reporter’s Ashenafi Endale sat down with the public finance guru. The excerpts, does not necessarily reflect PEHA’s position.

The Reporter: What is the progress in reforming public financial institutions, which commenced after Abiy came to power?

Sewagegn Chane: The biggest reform we undertook is in the DBE. In 2018/19, the House of Peoples’ Representatives (HPR) decided DBE cannot continue as a financial institution and debated on how to dismantle it. That year, the bank reported 765 million birr loss so the HPR decided that the bank is not supporting itself, let alone the economy.

Myself, Haileyesus Bekele, the president at the time, and Yohannes Ayalew (PhD) DBE board president at the time, were called by the HPR to explain the issue. At that time, Public Finance Institutions Agency was a separate entity outside PEHA. The agency was led by Sintayehu Hailemichael (PhD) and I was the deputy director for operations. When some 36 SOEs were put under PEHA in 2018/19, the agency was included under PEHA, as a directorate.

The Budget and Finance Standing Committee at the Parliament insisted the DBE must be dismantled, because it was reporting a loss consecutively. The three of us were called to give our final comments on the committee’s decision. The committee was told that the fundamental problem of the bank was the lack of institutional independence.

Everybody was intervening in the bank, and it was unable to operate as a bank. The PM, other ministers, sectorial institutions, and even individuals have been meddling in DBE’s operation. Secondly, the bank gives loans but does not collect. Those who took DBE loans view it as the government’s budget, not as a client. Most of them had the “developmental investors” plate.

They take a loan and divert it to other businesses. Commercial farming in Gambella and Benishangul are good examples. I was in Gambllea for a year and half, to study why DBE’s loans failed there. There are so many rain-fed projects there. Particularly, six of those that took loans completely diverted the money to other businesses, instead of the commercial farming.

I stood before the standing committee, and pledged to give the DBE additional time. I told them if institutional freedom is restored, relationships with clients will be straightforward, and the bank’s loan collection capacity rebuilt, bringing DBE on track. So I asked the standing committee to give us just one year, and if we fail to rescue the bank in that year, then the committee can dismantle it.

Yohannes on his behalf explained how the IMF and the World Bank are happy to see the DBE dismantled because they do not want development banks in developing economies. He also elaborated how important a development bank is for Ethiopia. After a brief tea brake discussions, the standing committee announced it granted the one year time.

Immediately, we embarked on the reform agenda, introducing seven reform pillars. One of the biggest reform pillars was reducing DBE’s Non Performing Loans, which was over 40 percent at the time. If the bank cannot collect the loans, it cannot disburse loans the next time.

DBE’s NPL at the time was weighed in rain-fed agriculture and textile. So, we stopped any further loans for rain-fed agriculture. In textile, many foreign investors took loans in billions but did not pay, so we decided to take over all the projects that are not paying back their loans, and transferred them to other investors.

We also took the contract management of non-performing projects. For instance, the DBE took over the management of Elsi Addis, Etur and other textile factories, for the time being. Except Etur, most of these projects have been transferred to new investors, without reaching the foreclosure stage.

The major project left on our hands to date is Ayka Addis.

The other serious measurements we took were barring any officials from intervening in any loan appraisals and disbursement processes. Before the reform, orders for some loan approvals were given from the Office of the PM. Officials from the Industry, trade, agriculture, and many other ministries used to give such informal orders to the bank. Now, even the DBE board cannot involve in loan disbursement cases, except on strategic issues.

We managed to reduce DBE’s NPL to 30 percent this year, including Tigray loans. It is actually 17 percent, if loans in Tigray are excluded, which are affected by the war in northern Ethiopia. Profit comes from loan interest. If the loan is not collected, there can be no profit.

We managed to generate 1.2 million in 2019/20; just a year after the reform was launched. This year, the bank generated 3.9 billion birr in profit. If we did not put aside 4.1 billion birr provision for the Tigray loans, DBE’s profit this year could have been 7.8 billion birr. The DBE is rescued now and everybody is acting as a client now.

DBE’s source of finance is the guarantees from the Ministry of Finance and the National Bank of Ethiopia (NBE). The capital has increased from five million to one billion. The macroeconomic committee approved a study to allow new DBE bond, effective since January. This is apart from the GERD bond, which is the DBEs source of finance.

Before the reform, all the financial indicators of the bank were negative, and unhealthy. We completely reversed all of that, except for the NPL. Before the reform, there were only expenses and disbursement, but now there is income.

Out of the 31 strategic measurements we stipulated under the seven reform pillars, 21 are aggressively implemented and ten are in the process. Only one measurement has not started, which is the digital technology and modernization initiative.

The PEHA and DBE’s board has contributed for the success of DBEs management. One of the positive factors is the steel-serious discipline of Tegegnework Getu (PhD), the board chair of DBE. As a board chair, he is opaque to any external influence or favor. He never took stipends and incentives allocated for board chairs annually. Even he uses his own car for DBE activities.

Yohannes was the chief economist at the NBE for a long time. How did you believe in him, that he could rescue the bank?

Under past presidents, the bank had many deviations and exceptions. Instead of going through loan approval and disbursement procedures, loan seekers directly contact the president and get the loans, informally.

For instance, after we banned DBE loans for rain-fed agriculture in 2018/19, the bank gave 120 million for rain-fed agriculture project. The president at the time said he was forced because certain officials at the Ministry of Agriculture managed to give the order via the Office of the PM.

Surprisingly, the board chair does not know about the loan. The bank was bleeding. We had to be brutal to stop the bleeding. Most of the bad loans were given during Isayas Bahre’s time. Both Haileyesus and Getahun Nana were unable to save the bank. Our biggest worry was that Yohannes might decline the role to lead the DBE.

Over 200 large scale agricultural projects, and a number of foreign textile investors took loans from the bank and failed to pay. Are you pursuing them legally?

We are trying to acquire the lands currently. Our biggest problem now is with the regional governments of Benishangul and Gambella. The land is the key asset the investors provide as collateral to take the loan from the bank.

After the investors fled without paying the loans they took, the DBE has to acquire the lands, since it is the collateral. Once we finalize acquiring the lands, we will transfer it to other investors. Then we will recover the previous loans.

I heard the Benishangul and Gambella regional governments are demanding it pays taxes on the lands?

We reached agreements on some of the lands in Benishangul. There are ongoing debates on the amount. The bank agreed to pay the tax, if it agreed on the amount. The regional governments usually give one plot for multiple investors, so one certificate is given to multiple investors. The regional agriculture bureau has been reporting to us that the lands were being cultivated by the investors, which was false.

In general, rain-fed agriculture and textile investments have bled DBE.

For instance, Ayka Addis’s investor used informal channels to get the loans, instead of going directly through the bank. It either goes through the PMO or other officials. Solving all this was not simple.

Most of DBE’s clients were unruly. They had the right to take the loan, and the right not to pay. So we disciplined the clients first, and reversed the bank’s practice of negligence. All this was done in three years.

How much is the land leased for the rain-fed projects?

The rate depends on the regions. Basically, tax, lease and anything related to the land is handled by the investors. But since the investors went bankrupt, and the DBE took the lands, now the bank has to pay them. This is the reason why the regional states are asking DBE for the taxes, because it is under the bank now.

The investors who took the land in regional states for commercial farming, left, and the tax holiday period is over. So regional states are now claiming the taxes and the DBE agreed to pay. This is the game.

Did the Gambella commercial farms failed by design?

The loan was supported by policy. The policy of initiating commercial farming and modernizing the agriculture was not wrong. So the DBE prepared policy and procedures.

The major factor for the failure at that point, was the decision to give loans for rain-fed agriculture. This was a mistake because the investors knew the loopholes and abused the loans and failed to return it.

The DBE is on the right track now but business continuity is more critical.

What are DBE’s sources of funds, after the NBE’s 27 percent T-bill is replenished?

The NBE introduced another bond this year, in which banks channel one percent of their loan portfolio to the DBE. In the past six months, a bit more than 10 billion birr has been channeled to the bank from this new scheme. Once we start from insurances, these two schemes will become our biggest source of funds.

The GERD bond and loans from international banks also generate finance. It also accesses external funds like SME loans, through the MoF. DBE’s T-bill is almost zero currently.

How much is the loan interest the DBE is paying currently, when will the rest mature?

The DBE pays interests by adding two percent on the saving interest, which means nine percent. On the other hand, DBE’s interest rate is between 11 percent and 12 percent, the least being for import substituting projects. The margin covers its administrative cost. So the bank is able to pay all its interests duly.

DBE requested to put Tigray NPL’s off its balance sheet. But NBE officials told The Reporter that it is not going to take it off its balance sheet.

If Tigray’s NPL is put-off DBE’s balance sheet, DBE’s NPL could be 12.5 percent. But including the Tigray NPL, which is 10 billion birr, the NPL stands at 30.4 percent. What we are saying is this 10 billion birr in NPL happened by factors out of DBE’s control. We are not asking the NBE to cancel the Tigray loan.

We undertook a detailed study on how the NPLs could be taken off the balance sheet, and presented to the NBE. We do not know why NBE is silent on the issue. The CBE also requested the NBE to take off two billion birr off CBE’s balance sheet. This was also studied and presented to the NBE.

The NBE first said the request should be processed by the Bankers Association but the issue is still in the process. It is illogical to keep inactive numbers on banks’ balance sheet. When unrest occurred in Oromia over the past few years, the NBE allowed loans of affected investors in the region to stay off banks’ balance sheet. The same can be done for Tigray. It is not a big deal. It is NBE’s decision but I do not know why it is reluctant when it comes to Tigray NPLs. Tigray NPL does not represent DBE’s actual performance, which is outstanding.

DBE’s outstanding loan is 63.4 billion birr. Total NPLs stood at 19 billion, of which 10.1 billion birr is created in Tigray since the war. The president of DBE requested to exclude the Tigray NPL but PEHA does not agree, unless the NBE approves it.

Another investor is negotiating to buy Ayka Addis. Will this be the last negotiation?

A number of potential buyers have been trying to buy Ayka Addis in the past but failed. Especially a Chinese investor was very eager to acquire Ayka Addis. Any potential buyer is expected to contribute 50 percent of Ayka Addis’s portfolio. For instance, the initial investment loan was USD 1.7 billion so the buyer is expected to contribute half of it. But the Chinese lacked capital so it requested to contribute only 10 percent of it, which means around USD 200 million, so we refused because we cannot breach the 50 percent law.

If Ayka Addis is sold, DBE’s NPL will drop to around 15 percent, from the current 30.4 percent. Ayka Addis is holding a huge loan. The principal loan is 1.7 billion, a decade ago. Including the interest, probably it is around USD three billion by now. The value of the machines, factory building, raw materials when the DBE received Ayka Addis, is valued at USD 1.79 billion.

By the way, we are still paying the salary of 4,500 employees of Ayka Addis, though it has not operated for years now. It is between 13 million birr and 14 million birr every month. We cannot abandon the employees, after the Turkish investor left. We are carrying all this cost.

There were also other alternatives for Ayka Addis, other than selling it.

There were three major options tabled. The first is selling to a capable investor or buyer. The second is operating Ayka Addis under a management contract, just like Elsi Addis and the third was repurposing Ayka Addis into an Industrial Park. Some three potential investors have been negotiating. The Chinese came last.

Currently, another negotiation is underway. We hope this will be the last one. It is a consortium of local and foreign investors. We will disclose it when it materializes. Ayka Addis’s operation ranges from cultivating cotton to sewing the clothes. It pins the cotton, dyes it, and makes the clothes. It is an end-to-end project. So the potential buyer is expected to specialize in all these value chains.

Will the new buyer pay Ayka Addis’s accumulated tax?

Under Ethiopia’s law, a company does not pay taxes if it declares bankruptcy. After the DBE took over Ayka Addis, the tax authorities are saying Ayka Addis must pay tax, since it did not undergo liquidation. Ayka Addis was not operating for the past eleven years. So, the tax authority is asking for back-taxes for all these years, stating the project did not declare liquidation. So we are arguing with the tax authority.

But the DBE declared foreclosure?

When the Turkish investors left and the DBE started managing Ayka Addis, the tax authority started asking for tax.

Amazingly, Bmet cables, one of the Turkish investments abandoned after taking huge loan from the bank is a good example of how much Turkish investor’s exploited us. Under the Turkish investor, Bmet cables utilized 40 percent of operational capacity but they were not paying their loan.

Now, the local buyer, Tadesse Admasu of Red Star Trading, is operating at 12 percent of its capacity due to different reasons. The buyer acquired Bmet paying 890 million birr. Now, it has paid all the loans owed to Bmet.

How much has Ethiopia lost because Turkish investors left the country without paying DBE loans?

Before, their equity contribution was 30 percent. This means the DBE contributes 70 percent of the investment. Under the previous ratio, a Foreign Direct Investment comes with USD 30 million, and takes 70 million. The foreign investors left without paying the 70 percent loan they took from the DBE. But now, we adjusted the equity contribution to fifty percent, for foreign investors. Local investors pay 20 percent.

FDI is needed to bring technology, capital, forex, and create jobs. It did not meet any of these targets.

One of the other loopholes FDIs has been exploiting is that they highly under invoice export price. They usually have subsidiaries or a mother company operating abroad. So they export the clothes to them, with fake price documents. These investors also import raw materials only from those mother companies or subsidiaries abroad. The FDIs operating in Ethiopia do not want to use local inputs. They export t-shirts with USD 60 cents from Ethiopia. But the buyer abroad, which is affiliated to the FDI, resells it at a much higher price. So the FDIs generate meager forex for Ethiopia. Their bank statements also indicate loss, always. Especially the expats brought by FDI are highly abusive. Bmet’s former CEO has been paid 500,000 birr in salary monthly. This is excluding housing, vehicle and other accommodations. Now we decided to reduce expats inflow.

That is why, just when we started being strict on Ayka Addis that the Turkish investor’s fled Ethiopia immediately, without handing over the project’s properly. I think they left for Burkina Faso.

Are there new public financial institutions planned to be established, particularly to finance long term development projects?

Four years ago when the bank was in deep trouble, we conducted a study to determine its fate. One of our alternative recommendations in the study was to breakdown DBE into three different policy banks; into an industry bank, agricultural bank and an SME bank. Finally, a decision to reorganize and reform DBE as it is was made. In the meantime, we conducted a study to renovate the bank; the ATA was also making moves to initiate the establishment of an agricultural bank.

The initiative to establish a stock market was also conducted by us. We have been trying to convince the government to establish a stock market for the past eight years. It is only realized under Abiy.

Now, the importance of an independent agricultural bank and investment banks is imperative for Ethiopia. In line with the agricultural bank, agricultural insurance and micro-insurance firms are necessitated equally. These firms protect the loans provided by the agricultural bank to farmers.

We conducted the “Proposal of restructuring public banks” in 2014. The proposal included the recommendation to determine the fate of the former Construction and Business bank (CBB). We did not just demolish CBB without a proper study.

The same studies have later been modified for the DBE. The modified study also recommended the vitality of Agricultural Development Bank, and mortgage bank (construction bank). The plan is for the CBE to stop mortgage financing, and transfer the role to the new Construction Bank (CB). In fact, the proposed CB partly takes on the role of the now defunct CBB.

Currently, we have established two working groups at i-Capital Institute, studying on investment bank and the agricultural development bank each. PEHA has the mandate to give birth to new public enterprises, apart from managing the existing ones. It can also decide on mergers, and dismantling of SOEs.

As long as Ethiopia is progressing from an agrarian economy to manufacturing, a stock market is very essential. If we need more robust manufacturing companies, we must build a robust stock market, where the companies are listed, float shares, and mobilize capital. A manufacturing industry cannot grow without a stock market.

The banking sector fears to give loans to manufacturing industries because the banks fear losing their saving capital. Once the stock market is active, the interest in banks will drop. But the stock market will grow faster, hand in hand with manufacturing.

I hope the establishment of an agricultural bank is realized soon. Ethiopia has an agrarian economy. But the economy is currently distorted, as the service sector constitutes the largest portion of the GDP. In a bid to transform Ethiopia’s economy from an agricultural to a manufacturing industry, agricultural development bank cannot be an alternative. Agriculture is not developing due to lack of finance, fundamentally.

The agricultural bank also needs an insurance firm, to cover the risks of the loans. The bank finances tractors for the farmer, and then the insurance firm insures the machines as well as the harvest. It is highly imperative that agricultural development bank and investment banks are essential for this country.

A secondary market cannot operate without an investment bank. Since we are nearing the establishment of a stock market, we also need to establish an investment bank.

For instance, banks are planned to be listed on the stock market. The investment banks will study the banks, as well as other IPOs, inside out. So, the investment banks determine the exact value of shares, and securities. This means IPOs, including commercial banks, cannot determine the price of their shares by themselves, unlike now.

The underwriter preserves the interest of every stakeholder, investor, IPOs, and others. It sets standard but the investment bank cannot be listed on the stock market itself.

Once the two working groups wrap up their studies, the documents will be reviewed by stakeholders. Then, we will present the final documents to the government to decide on whether to drop or implement the study’s recommendations.

A few years back, we travelled to Nigeria to visit their central bank and development bank and took three months of training. I was amazed by their Islamic insurance. We extracted lessons and brought it to Ethiopia.

The government is saying the banking industry will be opened for foreign competition very soon. What is your take on this?

Before, we have been asking the government to open the banking industry. But recently, we have changed our perspective. We prefer the government to delay the opening up for now. I precisely know the exact capacity of each local banking institution.

Before, our assumption was that local banks will merge, at the face of an open up. So we have been advocating for it to open, at each meeting and financial summits.

Basically, banking and insurance businesses in Ethiopia is a captive business. The banks are formed either under religious, ethnic, political sentiments or other bands. So, Ethiopian banks and insurance companies lack the business mentality. If they had a business mentality, they will work with anyone who has a viable business idea. So I believe the government must delay the sectors opening up.

The NBE recently said mandatory merger and acquisitions will be forced on local banks, when the sector is opened up.

That is inevitable once the industry is opened up. Of course mergers can happen even before the opening up. For instance, the NBE raised the paid up capital to five billion. Those who failed to meet will have no option but merge. The NBE can also raise the reserve let’s say to 25 percent, from the 10 percent currently. Many banks could have merged. This way, competitive banks could be created.

Western banks, especially Europeans, strongly pushed Malaysia, Korea, South Korea, and Thailand to open up their financial sector. Once these Asian countries opened their financial industries, the western banks withdrew after joining the sector. The Asian economies were hit by financial crisis as a result.

But eventually the Asian tigers avenged the western banks. The 2007 financial crisis hit western banks, because the Asian tigers suddenly raised their banking capital. They intentionally gave more loans to American banks. Then the American and European banks disbursed those loans to mortgage, and small businesses. The western banks failed to pay their loans to the Asian tigers, taking revenge twenty years after the western banks played foul.

We do not need such turf wars.

The only reason Ethiopia’s economy is doing well after the war in the past two years, is because our financial industry is closed off. Our economy survived because the banking sector is not open.

If banking was opened to foreign competition, the economy could collapse, under this war. And had it been opened before the war, the economy would have collapsed by now. Foreign banks simply close and leave, when there is a war.

Many people say the banking industry should be opened. That is wrong. They do not know the exact capacity of local banks in surviving foreign competition. I have no confidence even in the CBE.

The CBE has a huge NPL owed by the government. The government owes over half a trillion birr. Unless it is fully paid, CBE will face many challenges.

So, I insist the banking industry should not be opened at least in the next three to four years. Local banks need up to four years to prepare. Mandatory merger is simple.

When the Home Grown Economic Reform was launched in 2019, the government promised to reduce the states hand in the economy, and reduce the pressure on CBE and domestic credit. Is there any progress?

The CBE is not giving loans to the government now. State pressure is reduced. The CBE has studied new organizational structure, and is implementing new business strategies. Before, especially during the previous regime, state banks give loans as if it is a budget. They do not collect the loan.

Do you follow up on CBE’s branches abroad?

We evaluate them during reporting. The bank has branches in Juba and Djibouti. The Juba branch is performing very well but the Khartoum branch was suspended while in the pipeline.

Did the CBE move from PEHA’s supervision, after it is placed under the EIH?

Currently, the CBE is in transition process, from PEHA to the EIH.

I heard SOEs will be categorized under three supervisory institutions according to their performance. These are the EIH, PEHA, and the LAMC. Is that true?

What I know is that there are SOEs going to the EIH, and the rest will remain under PEHA. The LAMC by itself is an SOE and is under PEHA’s supervisory. LAMC is under my supervision. The CBE, DBE, EIH, LAMC and national lottery, are under my directorate.

The EIH has recently on-boarded 27 SOEs, out of the 36 SOEs under PEHA. Does that mean they are completely out of PEHA?

The investment part of SOEs goes to the EIH, while the enterprise management aspect remains under PEHA. But so far, there is no definite decision on whether the selected SOEs completely move to the EIH, or partially. This is decided by the macroeconomic team of the PM.

Will all SOEs be listed on the stock market?

The plan was for the SOEs to list a certain percent of their value on the stock market. If SOEs like ET, ethio telecom and others trade 10 percent of their portion on the stock market, it builds the public’s confidence. But SOEs must meet stringent financial reporting systems.

I also hear that five percent of ethio telecom’s share will be sold on the stock market. SOEs that meet the right financial reporting system will be able to float shares on the stock market.

People are facing difficulties acquiring houses because real estate companies collect money from house seekers and disappear. The stock market will also solve this. Everything will take shape under the secondary market.

The government is allowing the establishment of new banks in the last two years. But lately it confirmed the opening up of the banking sector for foreigners. Isn’t this sending mixed signal?

Mergers can be done at any time. Then local banks can consolidate and ready for competition. PEHA is exemplary in merging CBB with the CBE six years ago. Private Banks must follow suit.

Local banks are in a comfort zone, registering lump profit, not because they are providing a class service. They are profiting because they are protected. Under state protection, they do not have to improve service. They survive at the expense of the client. Millions are saving in bank but only a few thousand get loans. All of this will change, once foreign banks come.

To allow foreign banks, the banking proclamation, banking service code and the investment regulations must be revised. Especially, the code must allow banking for foreigners. The existing commercial code allows banking and insurance only for Ethiopians. Non Ethiopians cannot be investors, or operators.

Do you think the financial sector will be opened before five years?

I think so but I prefer it being delayed. All banks are giving loans to the service sector. Manufacturing and agriculture cannot grow unless we have banks that can give loans for long term projects. There are no consumer loans too.

Insurance companies complained over NBE’s order to direct 15 percent of their profit to DBE bond.

The rate has been reduced lately and the insurance companies agreed.

ሪፖርተር ዜና

Media and Communication Center (MCC) a private limited media company established in 1995. Headquartered in Addis Ababa, Ethiopia MCC is the publisher of “Reporter” a bi-weekly Amharic, “The Reporter” a weekly English newspaper, a monthly Amharic and English magazines in both print and electronic versions.

Mission and Vision

The Reporter’s motto “Free Press, Free Speech, Free Spirit” expresses the ideal of freedom that, journalists and editors, hope to enjoy and promote professional journalism.

MCC believes that it has responsibility to readers, the public, and the people in and outside Ethiopia who rely on Reporter for news.

Each week we bring to the public critical stories without fear or favor and guarantee that our editorial choices about what to print are based on the importance and relevance of the topic to our country along with journalistic qualities. We refrain from any political, economic, or other unethical motivations.

We dedicate ourselves to help our readers in their effort to become an informed citizenry by giving as much information as possible.

We serve as a platform for the public’s thoughts, opinions and ideas by soliciting, accepting, reviewing and publishing letters and comments.

We intend to make our newspaper a model for those in our profession, a guide for novices.

Circulations and Reach

MCC distributes the newspapers and magazines to all business companies, governmental offices and non-governmental offices in Addis Ababa and all regional cities through subscription as well as street vendors.

Readers can access our news on our websites ethiopianreporter and www.thereporterethiopia.com

Amare Aragawi Ethiopian Reporter, The Reporter (Ethiopia), also known Amare Aragawi, The Ethiopian Reporter (Amharic: ሪፖርተር), is a private newspaper ሪፖርተር published in Addis Ababa, Ethiopia. It appears in both English and Amharic, and is owned by the Media Communications Centre.

The editor in chief and founder of the newspaper is Amare Aragawi. ሪፖርተር amharic news

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Addis Zemen (Amharic), The Ethiopian Herald (English) and the Monitor (English). Key changes and developments in the newspaper marketplace in the past five years

According to the Ministry of Information, there were 68 newspapers and magazines published and distributed in July 2006. This is an increase from five years ago (though figures for 2000 could not be found). There are 56 newspapers and 12 magazines. Most papers are weeklies, bi-weeklies and monthlies, with only three dailies, all national, in existence. Many of the new papers in recent years have been tabloid weeklies responding to news events, such as the 2005 elections. However, some of these papers disappear when there are no strong news events to cover.

Newspaper in Ethiopia

Daily

Twice a week Weekly

Every two weeks Monthly

Source: Ministry of Information, personal communication, August 2006

The newspaper sector is limited by the country’s low literacy rates, and most titles are said to have small print runs of only about 3,000 copies. At the time of writing this report, no data could be sourced on the percentage of the adult population that reads a newspaper.

At national level, there are three daily newspapers The three national dailies are Addis Zemen (Amharic), The Ethiopian Herald (English) and the Monitor (English). The Monitor is the only private-owned daily. There is no information available to distinguish whether the remaining 53 newspapers are national or regional papers.

There are 12 national magazines; 10 published monthly, two published every two months, and two published quarterly. Ten of these magazines are in the Amharic language, and two are published in English, a monthly and a bi-monthly (Ministry of Information, personal communication, August 2006).

Investment and growth in newspapers in the past five years

There has been a significant increase in the number of papers in the past five years, with new privately-owned papers leading this growth.

However it is difficult to comment on the exact size of the newspaper market, as there is no research available in this area. Anecdotally, however, there was evidence of high demand for private papers during the May 2005 election period, but with a contraction in the number of private papers after the election.

Only a few of the newspapers, such as The Reporter (with Amharic and English editions, owned by the Media Communication Centre) and Addis Admass (in Amharic) are backed by strong private investment. Some papers have folded after not being strong enough to withstand challenges pertaining to legal or other matters. Some complain about delays in getting permits due to delay in finalisation of the provisions of the new Press Law. Another barrier to newspaper sector growth, according to the International Press Institute (IPI, 2005), has been the banning of some newspapers and the detention of journalists following the unrest after the May 2005 elections.

There is a state-owned news agency, Ethiopian News Agency, and a private local one, Walta Information Centre, both of which mainly serve the state media. Walta Information Centre is owned by the ruling party (EPRDF), so is categorized as state-owned in Figure 9. The private media do not have arrangements with these news agencies to provide them with the content they require, and this remains a major challenge for the private media. The other five news agencies operating in the country, such as Reuters and AFP, are all international.

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Amare Aragawi Ethiopian Reporter, also known Amare Aragawi as The Ethiopian Reporter (Amharic: ), is a private newspaper published in Addis Ababa, Ethiopia. It appears in both English and Amharic, and is owned by the Media Communications Centre. The editor in chief and founder of the newspaper is Amare Aragawi. the reporter amharic news

Only a few of the newspapers, such as The Reporter (with Amharic and English editions, owned by the Media Communication Centre) and Addis Admass (in Amharic) are backed by strong private investment. Some papers have folded after not being strong enough to withstand challenges pertaining to legal or other matters. Some complain about delays in getting permits due to delay in finalization of the provisions of the new Press Law. Another barrier to newspaper sector growth, according to the International Press Institute (IPI, 2005), has been the banning of some newspapers and the detention of journalists following the unrest after the May 2005 elections.

There is a state-owned news agency, Ethiopian News Agency, and a private local one, Walta Information Centre, both of which mainly serve the state media. Walta Information Centre is owned by the ruling party (EPRDF), so is The Reporter (with Amharic and English editions, owned by the Media Communication Centre) and Addis Admass (in Amharic) categorized as state-owned in Figure 9. The private media do not have arrangements with these news agencies to provide them with the content they require, and this remains a major challenge for the private media. The other five news agencies operating in the country, such as Reuters and AFP, are all international.

amharic news Addis Zemen (Amharic), The Ethiopian Herald (English) and the Monitor (English).

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Ethiopian Reporter Amharic news

NaMA will always cooperate with forces that can weaken the TPLF. As the TPLF has been in politics for a long time and has led the country, it must correct the mistakes of the past by deciding which is the most viable path for the future. They could not think of a way that would benefit the people of Tigray, whom they think they represent.

I do not think that the separation of the Amhara and Tigray peoples, a society that has lived together for many centuries and is bound by religion and culture, will achieve the goal. The people of Tigray must show that they are not enemies to the Amhara community.

During the war process, NaMA has been doing many other things by standing with the defense force, delivering food and coordinating with the diaspora. When the Amhara region was in battle, it gave studies on why they should fight for a purpose. It was heavily involved throughout the war.

How and under what conditions do you think the negotiations should be conducted?

Conflict always ends in negotiation. Even if the TPLF itself thinks that we should be divided, it knows that they will lack both resources and manpower. The TPLF should not go any further on the path of brutality and revenge. Ethiopia should follow the liberal approach and solve its problems. The war against the TPLF was not for revenge but was brought on by themselves.

In my view, I want transitional justice to happen. It is not because I believe transitional justice would calm everything down, but because it is an option. Justice is being served now, not for revenge but to bring harmony and move forward.

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Ethiopia Country Report Context

Key changes and developments in the newspaper marketplace in the past five years

According to the Ministry of Information, there were 68 newspapers and magazines published and distributed in July 2006. This is an increase from five years ago (though figures for 2000 could not be found). There are 56 newspapers and 12 magazines. Most papers are weeklies, bi-weeklies and monthlies, with only three dailies, all national, in existence. Many of the new papers in recent years have been tabloid weeklies responding to news events, such as the 2005 elections. However, some of these papers disappear when there are no strong news events to cover.

The newspaper sector is limited by the country’s low literacy rates, and most titles are said to have small print runs of only about 3,000 copies. At the time of writing this report, no data could be sourced on the percentage of the adult population that reads a newspaper.

At national level, there are three daily newspapers (see Figure 8). The three national dailies are Addis Zemen (Amharic), The Ethiopian Herald (English) and the Monitor (English). The Monitor is the only private-owned daily. There is no information available to distinguish whether the remaining 53 newspapers are national or regional papers.

There are 12 national magazines; 10 published monthly, two published every two months, and two published quarterly. Ten of these magazines are in the Amharic language, and two are published in English, a monthly and a bi-monthly (Ministry of Information, personal communication, August 2006).

Investment and growth in newspapers in the past five years

There has been a significant increase in the number of papers in the past five years, with new privately-owned papers leading this growth.

However it is difficult to comment on the exact size of the newspaper market, as there is no research available in this area. Anecdotally, however, there was evidence of high demand for private papers during the May 2005 election period, but with a contraction in the number of private papers after the election.

amharic news

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The Ethiopian Reporter

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Reporter Amharic ethiopian news live

Negotiations should be conducted for the sake of peace and justice, with the decision that it will not happen again in the future and that what happened in the past was not right.

But in Ethiopia, it is seen that negotiations are used as a plot resource. It has been observed that only if the power to be negotiated is dangerous and one party wants to survive, is the proposal submitted for negotiation.

That is why I am afraid that the proposal presented by the TPLF might be some sort of treason. The deal requires a genuine broker. Since the war will inevitably end in negotiations, it all depends on who comes up with the better negotiating package. There is a risk that the negotiator who believes in violence may resort to violence at the negotiating table.

The TPLF should not exist as a political force. It is difficult to say that the TPLF is deceiving all these people with mobilization. I think most of them believe it. While the party was scattered, the individuals in the party lined up, reorganized, and attacked the defense force.

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Such regeneration should not be ignored. The security guarantees should be adjusted and then they can enter into negotiations. A ceasefire is one way it can be done. But beyond that, there must be other stakeholders. The negotiations that should have been entered into after the collapse of the Derg left us in the situation we are in now. I believe that the Amhara region should have a negotiator on their behalf.

In the end, it should be known what level our politics should be at. Any person should be able to go and live in the area they want without being displaced from place to place because of ethnicity.

The TPLF has the capacity to rebel, not organize and re-enter. War itself should not be based on ethnicity. Who will benefit from this war?

There is no need to pretend like there is a war between two different countries. Both must work together. The negotiations must be conducted in moderation. Negotiations range from a ceasefire to a new proposal.

Although the African Union has little experience, it must mediate. They should all enter into the negotiation with good intentions. The very idea of secession is unethical.

To allow foreign banks, the banking proclamation, banking service code and the investment regulations must be revised. Especially, the code must allow banking for foreigners. The existing commercial code allows banking and insurance only for Ethiopians. Non Ethiopians cannot be investors, or operators.

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