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Month: January 2019
DEVELOPING STORY: Saudi Arabia Releases Mohammed Hussien Ali Al-amoudi
Mohammed Hussien Ali Al-amoudi (Sheikh) in Jeddah yesterday afternoon, right after his release, spending more than a year in Saudi prison. He was one of the many royal family members and billionaires arrested following a wide crackdown by Mohammed bin Salman al Saud, the Crown Prince of Saudi Arabia.
The EPRDFites, or whatever is left of them…
The EPRDFites, or whatever is left of them, had their regular meeting of the Executive Committee a week ago, where its leaders discussed a 70-page report tabled by their chairman, Abiy Ahmed (PhD), gossip disclosed. The report has a realistic assessment of the state of affairs in the republic, if not a grim take on the inter-party relationship between two senior members of the ruling coalition, claims gossip.
Mainly troubled by the ongoing recriminations between the leaders and mutual mistrust between the TPLF and the ADP – due primarily to disputes over administrative demarcations – the EPRDFites have said they have failed to achieve unity of purpose and action, gossip says. It is a long overdue admission to come from an organisation with a culture of complacency, claims gossip.
But the EPRDFites have also taken note of the security challenges recurrent in several parts of the country, where “anti-reform elements within and outside the administration” were blamed for undermining the reform efforts, according to gossip.
No less were issues of concern on the economic slowdown and deteriorating level of public service provisions that is a source of anxiety to the EPRDFites, gossip noted. Again, they were not short of groups to blame for what their leader believes is causing no more than hiccups, says gossip. Improvident political forces unable to see the type and scope of the reforms, as well as the lily-livered bureaucrats, have received their share of the onus for reforms that are not going as remarkably as was initially thought, according to gossip.
Gossip claims that it was ironically the TPLFites which were the forces in the EPRDF who demonstrated coherence and a sense of direction during the executive committee meeting. They have urged to refocus on the resolutions the ruling party had made during its meeting back in December 2017 and wanted to chart out a course and position for the EPRDF in the national elections in 2020, says gossip.
The chairman of the ruling party does not seem to have made up his mind whether to let the national elections conducted on schedule, says gossip. No less ambiguous was he on the issue during the executive committee meeting last week. However, he will face powerful political forces within and outside of his ruling coalition that is adamant to see the elections carried out on time, including the TPLF and the OLF. And there are no constitutional instruments that allow him or parliament to postpone the national polls that need to be conducted “every five years”.
Although the political stability in the country will determine whether or not the national elections happen in one and half years, Abiy appears to be little concerned if he will carry victory to the EPRDFites, gossip disclosed. He had seemed to be bullish before the executive committee meeting about the prospect of EPRDF’s landslide victory, revealed gossip.
His views of the opposition camp – whether it is those who returned from exile or those who were put up inside the country – is one highly fragmented and occupied by mutual squabbles to pose any threat to the incumbent, according to gossip. He tried to impress upon his follow EPRDFites that the leaders of the various political opposition groups despise each other much more than their issues with the ruling party, hence little worry about their capacity to challenge the ruling party on the electoral front, says gossip.
Interestingly, his own ruling coalition is more divided and polarised than any other time since its formation in the late 1980s, claims gossip. Abiy’s ability to restore unity within the EPRDF and perhaps persuade its coalition members to dissolve their independent existence to form a unified EPRDF will herald a new beginning for his long political career in evolving as a statesman who succeeded in redrawing Ethiopia’s political landscape, gossip foresees.
Moving Economic Policymaking Away from Short Termism
Ethiopia’s growth narrative, validated recently by that bastion of liberalism, the International Monetary Fund, is a story of contradictions.
Just wondering about these: why would an economy expanding by double digits for over 10 years suffer from stagnant exports; mounting external debt; a recurrent forex crunch; declining revenues; galloping inflation; ballooning unemployment; and a worrying slowdown in business transactions? What does the growth in GDP have to show for itself if the structure of the economy remains unchanged?
If searching for answers for these fundamental questions does not lead the administration of Prime Minister Abiy Ahmed to focus on charting out a macroeconomic policy roadmap, it will not be long before the country confronts unpleasant realities of political implosion. As the Chinese have long suspected, mere rhetoric of democracy, equality and justice hardly contain a restless citizenry. Without delivering on the economic front for the majority, successes in security, stability and political inclusivity will only be temporary.
It is a lesson history has illuminated repeatedly, both in democratically mature countries that stumble economically and in emerging markets that are improving the material wellbeing of citizens, which helps to excuse authoritarian rule. Abiy’s administration faces such a dilemma.
It finds itself presented with the demands of a growing population that cannot be made content merely by political reforms. The administration’s focus on the political front, albeit a necessity, is a crucial prerequisite for a more equitable and just state, but without delivering on economic premises, it is bound to remain a thankless effort.
The challenges faced by the country are manifest in the performance of the exports front. The external sector also lays bare the structural flaws that have been inherent to the current economic policies of the nation.
Revenues from exports have been stagnant for the past seven years and have been unable to top three billion dollars for the past three years. And despite arguably unearned enthusiasm from Bretton Woods institutions on Ethiopia’s economy, this fiscal year does not appear to signal a relief either.
Coffee, a commodity that usually makes up for a third of export revenues, earned the country 334 million dollars in foreign currency in the first half of the current fiscal year, 29pc below the government’s target and 48 million dollars short of the revenues from the same period the previous year.
This in particular can be attributed to the continuing political crisis in the country, but the general direction the economy has been moving in cannot be explained on similar grounds. The characteristics have been that of an economy that, despite increasing foreign and public investments and double-digit GDP growth, has been unable to impact what matters most, competitiveness on the global stage.
The lack of this crucial ingredient has given way to an economy that cannot keep its balance once the government’s heavy hand begins to slacken off. It is also a challenge that cannot be addressed by tweaking some fiscal policies here and monetary policies there but requires the introduction of an economic roadmap with the chief objective of creating an ecosystem for a thriving private sector. It is an economy of companies that compete among each other and not nations.
The basis for a new economic policy needs to be based on an understanding and careful reading of the achievements and flaws of what is currently in place, the developmental state model. While it is the EPRDFites less than enthusiastic notion of private enterprise that gets the most attention, and thus the acutest criticism, their insistence for state-led development was not without its merits. The problem arose only after political institutions failed to become inclusive as the economy grew and the state was unable to recognize its excesses.
The developmental state model had to increase the provision of critical services and infrastructure spending to stimulate the economy at its heart, a strategy that had had many successes. There has been a leap in the growth of the construction and service sectors, poverty reduction, access to education and healthcare and financial inclusion that cannot be dismissed out of hand. It was a pragmatic policy for a nation with an economy that needed to be jump started and a population that required infrastructure, capital, and know-how to meet its full potential.
Above all it was meant to jump start a structural transformation of the economy from a subsistant agricultural based to urban and industrial society. It was thought the massive public investments made in the expansion of infrastrcurure and the manufacturing sector would bear fruit fast enough to generate sufficient capital to finance the next stage of transformation.
Unfortunately, policymakers forgot to foresee the length of the transition before the private sector could take over the mantle. There was a scarcity of strategies to ready businesses for the responsibility they should assume, setting up an enabling legal, policy and institutional environment. This was incentivized by an ideological aversion that sidelined private capital as a potential ally for growth, if not due to an insatiable appetite to strengthen the hands of the state.
The initial objective of stimulating growth, primarily through infrastructure financing, which required access to capital, was only justifiable as long as it was carried out in moderation, and without crwoding out the private sector. Not surprisingly, what followed was the usual bottlenecks that await such policies down the road. Ethiopia did not have the competent and professional bureaucracy as almost a class unto itself that Singapore does. Suffice the feebleness evident in the central bank – in the case of monetary policies – and the finance ministry – in the case of fiscal policies.
Neither does Ethiopia have the necessary checks and balances that keep political favouratism and partisan interests from becoming indistinguishable from the responsibilities of the state to society. The outcome was not only a waste to public resources through corruption and inefficiency but a policy that gave way to the misguided allocations of labour and capital in the economy. The incapacitation of a fair and equitable allocation of resources into sectors and businesses that are productive meant the inefficient distribution of wealth. This led to inequlity in society, hence resentment now felt by many.
Addressing this problem should be the primary objective of Abiy’s administration. There is a need for an economic policy formulation that tasks itself with the business of creating wealth and ensuring its redistributive mechanism in a just manner. It should be an effort to reorient the state towards what should be its core competence: creating the legal, institutional and policy environment within which businesses operate; the provisions of basic services; and the protection of the most disadvantaged in society.
The state’s resources should be geared toward protecting private property, enforcing contracts, mediating fairly and improving the professionalism of its bureaucracy. Political reform cannot be divorced from righting the economic policies either. The private sector can do the rest. If the ecosystem under which labor, capital and information can managed fairly well, competence would be left as the only judge of the destination of resources, opening the path towards productivity and global competitiveness.
However, without the inclusiveness of political institutions alongside that of the economic ones, thinking of economic policy reforms only through the prism of improving employment, reducing inflation and bolstering the foreign currency reserve will be short-termist at best.
Hope & Comfort
President Sahle-Work Zewde comfort one of the patients of Cure Ethiopia at children’s Orthopaedic Hospital in Addis Abeba. Joined by Rick Gardner (MD), medical director of Cure Ethiopia, the President comforted children undergoing corrective treatments at the hospital for bone and muscle deformities.
Sahle-Work’s visit on the morning of January 22, 2018, marked the 10th anniversary of Cure International’s office in Ethiopia. She toured the hospital, heard from parents and patients and met with Roger Spoelman, president of Cure International.
“The work you are doing is a huge contribution to a whole generation,” she said. “You are giving them hope.”
Cure Ethiopia, whose centre is located in Sidist Kilo area on Algeria Street, is a teaching hospital that served 8,737 outpatients and carried out 2,650 surgeries in the last fiscal year. Two years ago, it opened the Rees-Jones Foundation Ward, a rehabilitation facility.
Cure International’s first hospital was in Kenya, and it recently opened its newest centre in Zambia. Since its establishment in the mid-nineties, the organisation has served over three million outpatients and performed 200,000 surgical procedures.
CBE to Take Over Electronic Utility Billing from Kifiya
Electric utility bill payments services, which have been handled by Kifiya Financial Technologies, will be entirely moved to the Commercial Bank of Ethiopia (CBE) by the end of this fiscal year.
The services will be switched to the state-owned bank when the agreement between the Ethiopian Electric Utility (EEU) and Kifiya Financial Technologies expires at the end of June.
To use the service, subscribers will be need to register on CBE’s online banking system. Then, their monthly bills will be sent to CBE’s database, which the EEU will also access, and the bill amount will be automatically deducted from subscribers’ accounts. The users will be notified of the transfer via text message.
EEU, which has 2.9 million subscribers, is moving the service to the Bank in order to make delivery efficient and convenient for subscribers, according to Demeke Robi, deputy CEO of EEU.
“It will save the time and energy of our clients,” Demeke told Fortune.
Seven-year-old Kifiya was founded by five individuals, including CEO Munir Duri, and has been handling utility payments for electricity customers along with telecom and water supply through its electronic platform, Lehulu, a one-stop billing system. It currently handles close to a million transactions a month in 42 outlets.
If the agreement is not renewed, Kifiya will be aggressively moving to other business areas, according to Ahmed Mohamed, general manager of Lehulu.
“We’re working on e-commerce, ticketing services for mass transit and others payment systems,” Ahmed told Fortune.
CBE is also dealing with the city traffic police and water supply authority to receive fees for fines and utility payments, which also had been managed by Kifiya Technologies.
EEU has already moved the monthly bill of 27,000 subscribers to the Bank’s online system.
The agreement was signed early last week at EEU headquarters on Cunningham Street between its CEO, Shiferaw Telila, and Dereje Dufa, vice president of Banking Service at the state bank.
Subscribers already moved to the Bank’s online service are commercial customers, non-governmental organisations, governmental institutions and businesses that consume high level of electric power.
“This is the initial step, and we will include all our customers in the new system gradually,” Shiferaw told Fortune.
EEU serves 2.9 million subscribers across the country and collected five billion Birr during the last fiscal year. The utility is still negotiating with the Bank on how to move the entire bill payment service of its subscribers, according to Demeke.
“Client and EEU will not be charged for the service. We will just use it as a strategy to widen our customer base,” said Derege.
The service shift will have positive impacts on customers, the service provider and the Bank, according to Habtamu Berhanu (PhD), a lecturer at Addis Abeba University’s College of Business & Economics for more than a decade and a half.
“It will simplify the life of the customer,” he said.
Currently, less than a third of the population has access to electricity, although the Second Edition of the Growth & Transformation Plan projected to reach 90pc by 2020. This makes the country one of the largest populations that have no access to electricity in Sub-Saharan Africa, next to Nigeria.
To increase access to electricity, the government has been subsidising electric power tariffs until the recent adjustment of December 2018, which shocked users when it was put into force.
Recently, Ethiopian Electric Power, responsible for power generation in the country, removed high-consumption customers that use more than 132Kv and those paying a minimum of five million Birr a month in electric bills from the EEU list of subscribers and proceeded to bill them directly. The move that has created acrimony between the two state enterprises.
Firms Vie to Supply Analytical Technology to Investment Agencies
Three international companies are vying to supply technologies to analyse customers’ interactions and to integrate management systems of the nation’s two federal investment agencies.
The offers placed by the bidding companies are far higher than the budget allocation prepared by the International Development Association (IDA) of the World Bank.
IDA allocated one million dollars to hire a company that will supply customer relations management (CRM) for the Ethiopian Investment Commission (EIC) and enterprise resource planning (ERP) for the Industrial Parks Development Corporation (IPDC). However, the allocated budget is 150pc lower than what was offered by the three bidding companies.
The tender was announced last year as a restrictive bid after the World Bank pledged to fund the project. The Competitiveness & Job Creation Project, which was formed under the IPDC, has oversight authority over the project and has approached four international firms – Techno Brain Global FZE, Twenty Third Century Systems Limited, Soft Pro International Inc and Oracle Corporation – to take part in the bidding process.
The first three companies have passed to the financial stage of the tender process, while Oracle fell short of qualifying for the technical evaluation phase. Techno Brain scored the highest point in the technical assessment, albeit the difference was marginal compared to the two other companies.
During the financial bid opening held on January 19, 2019, Twenty Third Century offered 154.28 million Br in local currency, including all taxes; Techno Brain offered 83.3 million Br, excluding all taxes; and Soft Pro offered 73.7 million Br, excluding 15pc withholding tax. The latter two bidders placed their tender in dollars.
“We’re still reading the offers of the bidding companies,” said Tessema Geda, project coordinator of the Competitiveness & Job Creation Project. He also explained that the process would go on after the World Bank approves the results of both the financial and technical evaluations.
Last year the project office hired an individual consultant who estimated that IPDC and EIC could pay one million dollars a year added to the implementation cost as a subscription fee. The payment will be made as a license fee for cloud storage, which could push the total investment for the project up to 6.5 million dollars, exceeding the initial estimate by six and a half fold.
CRM intends to help EIC staff to provide efficient services to investors in marketing, information, assistance and advocacy. The ERP system will be implemented to address 75pc of IPDC’s technical and functional requirements and will enable the Corporation to manage ongoing projects.
Additionally, the system is also supposed to support high availability for database clusters, mirroring, data replication or any other advanced technologies, according to the requirements.
A lecturer of information Systems at Addis Abeba University finds these requirements to be improper.
The Corporation can hire professionals, with specialised skills in software engineering, to customise programs to develop the ERP and CMS solutions using open source software, according to the expert.
“The open source software would only cost up to 100,000 dollars,” he said.
He also sees the plan of putting the data in cloud-storage to be unnecessary.
“The agencies don’t need such a sophisticated ERP and CMS system,” he said.
“They can do fine with basic technologies. They don’t need high-end solutions.”
Even though the project needs to get a no objection from the World Bank, the project owners still need to decide on the source of discrepancies in the budget estimates.
IPDC, which is a public enterprise formed to develop and administer industrial parks, is an implementing agency of the project. IPDC currently administers six industrial parks in Hawassa, Adama, Komolcha, Jimma, Dire Dawa and Meqelle and is in the process of developing five additional parks.
The project office will hold a meeting with the new Commissioner of the Ethiopian Investment Commission, Abebe Abebayehu, early this week to discuss the issue, according to Tessema.
“We would be eyeing options to source additional funds from the World Bank, or else we may cancel the bid, ” said Tessema.
Agency Swaps Outdated Base Year in Inflation Measurements
The Central Statistical Agency (CSA) has revised the Consumer Price Index (CPI) for a basket of goods and services, prices set as the basis for inflation rate measurements.
The update was made on the major weighted index – major indicators – replacing a base year that is used for comparison in the measure of the economic index. The new base year replaced the one that was in use for the past eight years.
The Agency conducts the Consumption & Expenditure Survey every five years throughout the country in order to obtain the base year weight that identifies the expenditure weights of major household goods and services. The last assessment was done in 2016, but not used until last month.
The Agency has been using a rate adopted in 2011, which is too old and outdated, according to Alemayehu Teferi, director of Household Studies & Cost Statistics at the Agency.
“The 2011 base year doesn’t show the current market price,” Alemayehu told Fortune. “The newly selected base year is more diversified, up-to-date and includes additional goods that were excluded before.”
The new change has led the Agency to amend the inflation rate it reported in November. The initial report shows that the headline inflation was 10.6pc, which was later revised to 9.3pc with the new base year, spanning a 1.3pc difference.
“The change of base year creates weight discrepancies,” said Alemayehu.
One economist applauds the revision and he asserts that the discrepancy is understandable.
“The 1.3pc discrepancy is expected,” said Ali Yibrie (PhD), a lecturer at Bahir Dar University College of Business & Economics.
Ali also recommends the government take measures to lower the inflationary pressures and to keep it in single digits.
“The rate should be under control to stabilise the economy,” he said.
The first report with the new baseline shows that the inflation rate for December was 10.4pc, one percentage point higher than the previous month.
December’s consumer price index, a measurement of the average change in the price paid by consumers for a fixed basket of goods and services, shows that food inflation reached 11.4pc in December, while non-food inflation was recorded at 9.1pc, a respective two and 0.1 percentage point increase compared to November.
“Since December is a festive period,” reads the report, “prices usually rise differently from other periods.”
From food items, price for vegetables, meat, milk, cheese, eggs, butter, and spices showed an increase. Prices rose for non-food items such as clothing, footwear, housing repair and maintenance, energy, household goods and furnishings, transport, health care and food and drinks contributed as well to the growth of headline inflation.
December’s inflationary pressure was higher than neighbouring Kenya that had a single digit headline inflation rate of 5.7pc in the same period.
However, the Agency estimates that this month’s inflation rate would remain in single digits at nine percent. The officials mention the current Meherharvest season when the supply of food items will be high as a reason for the decline.
“We expect the price of food items and other goods to remain constant,” Alemayehu told Fortune.
Belgian, Local Firm Venture into Chemical Manufacturing
In a franchise arrangement, an Ethiopian businessperson and a Belgian firm are setting up a chemical manufacturing plant in Debre Berhan, Amhara Regional State, to supply the food and beverage industry.
Formed after the merger of Ayalew Addis and Sopura NV Belgium, the new venture will operate as BeligoEth Plc, and will invest 100 million Br in the construction and outfitting of the plant. The project will occupy 30,000sqm in Chacha Kebele, one of the 16 kebeles of Angolelana Tara wereda, located 110Km north of Addis Abeba. The company secured the land through the investment office of the regional state after a 1.6 million Br compensation payment to six farmers.
The plant, to be constructed in two phases, will produce chemicals used by food processing companies, water bottlers, breweries, dairy farms and flower farms. The first phase will cost 40 million Br and will employ a total of 30 employees.
The factory requires a small labour force as it will be semi-automated, according to Ayalew.
BeligoEth, which is expected to be operational after a year and a half, will have a production capacity of 1,300tn of chemicals a year. Phase two will raise the factory’s production capacity to 1,600tn to between 1,800tn a year.
In the first phase, the factory will process chemicals for food and beverages, and phase two will enable the factory to process chemicals for the dairy industry and disinfectants for hospitals and clinics.
Geretta Consulting Architects & Engineers, a local company that designed the buildings of Marathon Motor Assembly Plant, Haile Resorts in Hawasa, Arbaminch and Ziway and United Insurance’s head office prepared the architectural design of the new plant.
“The design was sent to our European partners for review,” Ayalew told Fortune. “We will be floating a tender next month to hire a construction company.”
Ethiopia will be the third African destination for Sopura, a company established in 1946 that provides chemicals for cleaning and sanitation in the food and beverage industry and for water treatment plants. Apart from Ethiopia, the company has invested in Algeria and South Africa and has 19 subsidiaries across the world.
Ayalew, who founded Eureka Industrial Supplies two decades ago, has been importing cleaning and sanitisation chemicals for the beverage and food factories. Before opening his trading company Eureka, Ayalew, a chemist by profession, has worked at different breweries.
Upon being fully operational in three years, the company plans to substitute its own products for imports and export its products to other East African countries, according to Ayalew.
On a yearly basis, Ethiopia spends three Billion Birr to import chemicals used for different industries and purposes. These chemicals are imported by 465 companies engaged in importing, wholesaling and retailing chemical supplies.
There are also an additional 14 companies, which produce chemical products locally. Seven breweries and over 70 water bottling companies consume much of the chemicals.
The company chose Debre Berhan for the investment after considering the weather of Chacha wereda, one of the 24 rural weredasin North Shoa, according to Ayalew. Chacha has around 100 investors who have taken land and started developing the area.
“The chemicals and the products need to be stored at a cold temperature,” Ayalew said.
The area is getting more investment these days, according to Tadele Minda, the director of the wereda’sland use and management office.
“Besides, the area is preferable for agro-processing, Tadele told Fortune.
Experts commend the establishment of a company that will produce chemical products locally. Yet fears remain that the company will face stiff competition from hundreds of chemical importers.
“The chemical industry is at its infant stage,” said Beteley Tekola (PhD), who has been working as a consultant and academic in chemical engineering for a decade. “Therefore, investors should get support from the government.”
(TEMESGEN MULUGETA, FORTUNE STAFF WRITER, has contributed to this story)
Judges Rule to Continue Trial of Ex-Tiret Executives
Judges at the Regional High Court in Bahir Dar, the seat of Amhara Regional State, ruled to continue presiding over the cases of Berket Simon and Tadesse Kassa, former executives of Tiret Corporate, who were arrested under suspected acts of corruption.
Apprehended last Wednesday in Addis Abeba at their homes by the regional police and with the assistance of the Federal Police, both were transported to Bahir Dar on the same day and detained at one of the police stations.
Berket is being held as a suspect for allegedly misusing 35 million Br of public money while he worked as board chairperson of Tiret, the business conglomerate that has affiliation with the Amhara Democratic Party. Tadesse is also accused of the same charge that he allegedly committed while running the business as a CEO.
Investigators of the Amhara Regional State Anti-Corruption Commission brought the suspects before the regional court last Friday morning. The investigators accused the suspects of allegedly misusing and squandering public treasure operating through five subsidiaries and two wings of the corporation – Tiret Social Development and Tiret Investment.
Headquartered in Bahir Dar, Tiret was established with seed money supplied by the former Amhara National Democratic Movement (ANDM) and 25 of its founding members. These individuals were prominent members of EPRDF during the armed struggle against the Marxist military government. Following the downfall of the Dergue, the assets under ANDM’s control were transferred to Tiret, which now runs subsidiary companies involved in the transport, brewery, agriculture, trading, communications and logistics businesses.
The Commission accused the suspects of allegedly ordering illegal procurements that did not follow proper bidding procedures, purchasing shares with inflated values and granting loans to non-member companies of the Corporation.
The investigators, who based their allegations on audit reports that were concluded on January 10, 2018, assert that the suspects allegedly compelled the company to enter into partnerships with five other companies and individuals without commissioning proper feasibility studies and conducting due diligence.
During the tenure of the two suspects, Tiret paid 13.9 million Br to acquire shares in LA Palma Plc; 16 million Br for Bahir Dar Motors Assembly S.C; 1.4 million Br for Beyida Sustainable Chemicals Plc; made a 70 percent payment for Jari Water Plc; and 3.4 million Br for Istanbul Gazmanove, according to the investigators.
“Even though the Corporation made payments and expenditures, none of the five companies became operational,” claim the investigators.
The investigators also stated that they are probing Dashen Breweries and Juventus, which is still pending.
After reading their suspicions against the suspects, investigators requested an additional 14-day extension to keep the suspects in custody for their probes into the matter, collect and organise documents, gather further evidence and await the outcome of audit reports on two other subsidiary companies of the Corporation.
The investigators also requested that the judges deny bail to the suspects, stating that they could potentially tamper with evidence, coerce witnesses and destroy documents before prosecutors file charges against them.
The suspects appealed that the court reject the additional detention request made by the investigators, stating that they have enough documents and evidence in hand to file charges. They also appealed to the court that their case be reviewed by a federal court, mentioning that they suffer from serious health problems, which necessitated close assistance from their family members who are in Addis Abeba.
In their first appearance before the court, both had no legal representation. Tadesse, who has served as chairperson at Dashen Brewery and Abay Bank, said that he would be representing himself.
Berket, who was a communication minister, an adviser to the Prime Minister and who later served as a director at the Policy Studies & Research Centre, stated that he needs to consult with his family to hire lawyers due to his financial condition. Bereket, the founding CEO of Tiret, resigned from his post two years ago after serving the Corporation for over two decades.
After hearing both sides, the judges at the regional court rejected the request to transfer the case to a federal court, asserting that the company is located in the Amhara Regional State. The judges granted the 14-day extension requested by investigators to keep the accused in custody and adjourned the case to February 8, 2019.
An independent legal practitioner with 17 years of expriance agrees with the judges’ ruling in deciding to retain jurisdiction over the case at the regional level.
“Even if the alleged crime is a federal issue but committed at regional states, the courts in the regions have the power to keep it under their prerogatives,” said Gemechu Gutemma.
Whenever federal officials are suspected of crimes, their case will be reviewed in the high courts, as the former precedence of hearing cases at the Federal Supreme Court level was reversed by the House of Federation following Melaku Fanta’s case, according to Gemechu.
“When federal officials accused of crimes are brought before high courts,” said Gemechu, “so, the regional court can retain jurisdiction over the case. “
Furious Tenants at Loggerheads with Corporation
Tenants of state-owned commercial units vow to take their case to the Prime Minister’s Office if they do not get a response from the executives of the Federal Housing Corporation. They requested that the Corporation reconsider its decision after rental fees were amended upwards late last year.
Around 3,000 tenants held a meeting at Global Hotel on Sierra Leone Street on January 23, 2019. After opening remarks by Semehal Mekonnen, chairperson of the tenant’s committee, the ”lawfulness” and procedures of the rental increases were discussed.
Two months ago the Corporation announced rental fee hikes by an average of 2,090pc for the first time in the Corporation’s 43 years history. The rental fee amendment was applied on 6,128 commercial units, though it was subsequently revised.
Rental fees levied on non-governmental organisations (NGO), embassies, government offices and civil society tenants were lowered. The corporation reduced a square meter rental fee for these agencies from 339 to 140 Br. It has also lowered the 92 dollars a square meter fee imposed on embassies to 50 dollars.
The increases on commercial units were applied progressively over three years, rising yearly by 35pc, 70pc and 100pc. After delivering the announcement, the Corporation warned tenants to vacate the units if they disagree with the revised fees.
Unsatisfied, the tenants held a meeting mid-last week and agreed on five declarations that they intend to submit to the management of the Corporation.
The committee proposed a rental fee of 71.50 Br a square metre until a new rental fee is agreed upon. They also called for the extension of the deadline to their rental agreement, and for the Corporation to cease and desist from asserting that the tenants are paying very low rents.
Additionally, they called for a new directive to be drafted that will govern the relationships between the tenants and the Corporation; and for the suspension of the rental adjustment until another assessment is conducted.
The tenant committee submitted these requests to the Corporation the next day following a meeting held on January 24, 2019.
“We aren’t afraid of the decision made by the Corporation,” said Dereje Belay, deputy chairperson of the committee.
“We will continue our appeal up to the upper most level of the government body.”
The committee has also decided to bring the matter to the Grievance Hearing Committee of the Prime Minister’s Office on January 28, 2018.
“The Corporation didn’t know of the meeting and neither will it have any effect on the decision that has already been made,” Reshad Kemal, CEO of the Corporation, responded to Fortune.
On Friday, the final deadline for renewal of the contract for new rental rate agreements was announced to be on Saturday, February 02, 2019. Contracts that are not renewed by that date will be transferred to other tenants.
Administering a total of 17,000 residential and business units, the Corporation has started constructing 3,200 housing units for the first time in its history with a total cost of one billion Birr. The construction is part of a 16,000-unit housing development planned in the coming three years.
Two Local Airports to be Equipped with Weather Systems
The National Meteorology Agency is set to install weather systems that will provide real-time information and reports on weather conditions at Hawassa and Kombolcha airports.
The Agency will cover the seven million Birr cost of the Automated Weather Observing System, the tender it announced last week.
This will be the Agency’s second attempt to procure the system after originally floating a tender on October 19, 2018, which was cancelled after only one firm submitted a bid.
“We also had a budget deficit at the time that forced us to cancel the tender,” said the director of Kassa Fekadu, Aviation Meteorology Service at the Agency.
Out of the 22 airports that are currently operational and four that are under construction in Ethiopia, only the Addis Abeba, Meqelle, Bahir Dar, Dire Dawa and Gonder airports currently use the system, which provides real-time information and reports on air temperature, atmospheric pressure, humidity, wind direction and speed.
The Hawassa and Kombolcha airports, among the 22 operational domestic airports, were chosen as the next to receive the system, which is expected to become operational in July, because of the large number of passengers they host, according to Kassa.
The Semera and Bale Robe airports will get the automated weather system next year, according to him.
“Thus far, the weather system of each hour is registered manually,” Kassa said. “The system, beyond minimising human intervention, will increase accuracy and timeliness of the forecasts.”
The Ethiopian Civil Aviation Authority uses two types of weather information gathering systems, the Automatic Weather System, which is used to provide information on speed and direction, while the Automatic Weather Observing System is used for landing and take off by feeding weather information to the pilots, according to Animut Lemma, communications director at the Civil Aviation Authority.
Jimma, Jigjiga, Arbaminch, Gambella, Assosa and Lalibela airports use the Automatic Weather System. Dire Dawa, Addis Abeba, Meqelle, Bahir Dar and Gonder use automatic weather observing system. The remaining airports operate manually.
After the installation, the Agency’s Aviation Meteorology Service will be responsible for operating and maintaining the system. Established almost four decades ago, the Agency has more than 1,200 conventional stations, 25 automatic stations and upper-air observations. It also receives satellite images every fifteen minutes from the MSG2 satellite launched by the EU.
An expert applauds the installation of the system.
“The system, besides collecting real-time weather conditions, helps to make air transport safer,” said Woldeamlak Bewket (Prof.), a lecturer at Addis Abeba University’s Department of Geography & Environmental Studies. “Airports that do not have the system should be able to follow suit.”
Nonetheless, in Ethiopia, changes in weather conditions are not as intense as they are in other countries, except in the rainy season, which can make takeoff and landing difficult, according to Woldeamlak.
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