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Month: March 2019

Industry in Disagreement Over Paying For Premier’s Flagship Projects

Posted on by Web Master

Leaders in the Ethiopian financial industry are in sharp disagreement on how to raise fund to pay for Prime Minister Abiy Ahmed’s (PhD) pet projects in Addis Abeba. At the core of the dispute is whether bank presidents have the mandate to decide to give money expected of them.

Board directors of banks and leaders of the Ethiopian Bankers’ Association are at loggerheads over a 400 million Br contribution the banks are demanded to provide for riverside development, Ambo Stadium construction and internally displaced people.

The Association, led by Addisu Haba. sent letters three weeks ago to the banks requesting they provide 2.5pc of their net profit from last fiscal year as a contribution for the three projects, of which 1.5pc of the profit contribution is to be dedicated for the riverside revitalisation project, which Prime Minister Abiy Ahmed (PhD) has appeared to have developed a keen interest in.

The Association has also requested that the banks dedicate one percent of their net profit to assist internally displaced people as well as the construction of Ambo Stadium. Before sending the letters to the banks, the association had a meeting with bank presidents to discuss the issue.

At the beginning of last week, Solomon Desta, director of banking supervision at the National Bank of Ethiopia (NBE), followed it up with subsquent letters to the banks requesting that they deposit their contributions in a dedicated account that was opened for the purpose. The banks were also prodded by the central bank through phone calls.

The year-old Ethiopian Banks Board Directors Consultative Forum, which was formed by the board of directors of 12 banks and operates with 40 members,  strongly opposed the decision of the Association, stating that the Association is not the one that can make decisions about shareholders’ money.

The Forum also argues that the Association has to communicate with the board of directors before making the decision.

At the end of last week, the six-member executive board of the Forum held a meeting and decided to approach the Bankers Association to discuss the issue. A letter is expected to be sent this week, according to Eyesuswork Zafu, chairperson of the Forum.

The idea of contributing for the projects should have been tabled to the shareholders by calling an extraordinary meeting, according to Eyesuswork.

“Only shareholders can decide about their money,” Eyesuswork, who is also a board chairperson of United Bank, said.

However, Addisu, who is also the president Debub Global Bank, argues that the Association made no decision but rather forwarded a recommendation.

“The Association came up with a suggestion of the contribution and forwarded that to the president of the banks to table it for their board of directors’ approval,” Addisu told Fortune.

Established in 2002 by nine banks, the Association has as members all private and state banks. The Association provides training and lobbying on behalf of the banking industry.

The commercial banks, excluding the Development Bank of Ethiopia, earned over 16 billion Br in net profits during the last financial year.

In mid-January, Prime Minister Abiy Ahmed (PhD) called a meeting with the board directors and executives of the banking and insurance industries to discuss the financing of the 29-billion-Br riverside development project. During the meeting, no consensus was reached how the banks and insurance companies will make the contributions.

The president and board chairpersons of the banks are also invited to take part in a mid-May fundraising gala dinner, ‘Dine for Sheger,’ planned for the Riverside project. The event is hosted by the Prime Minister and costs five million Birr a plate.

IT WASN’T A DULL YEAR

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By the general public, academics, observers, detractors, supporters and media outlets, Prime Minister Abiy Ahmed (PhD) has been described as reformist, patriotic, populist, controversial, evasive, bullheaded, ambitious, narcissistic and even insensitive. Few have been able to argue, however, that his year-long premiership was dull.

He came on to the scene as a less known member of the EPRDF, largely under the shadow of the Oromo Democratic Party’s then chairperson, Lemma Megersa. This was until a leadership reshuffle and a majority vote by the party coalition’s council catapulted him to the Premiership. It only took the now famous inaugural speech, with its myriad promises of reform, on April 2, 2018, for him to be afforded public acceptance in the first months of his time in office.

His legacy is more pronounced in the political and diplomatic realm. He struck a historic peace deal with Eritrea’s President Issayas Afeworki after almost two decades of stalemate. He also extended an olive branch to opposition parties, pardoning and dropping charges brought by his government against dissedent politicians and journalists opened the political space up for any group or party willing to participate peacefully.

Abiy has been particularly proud of his gender-balanced ministerial cabinet appointments and the ongoing dialogue with opposition parties to reach a consensus on the institutionalisation of power.

His premiership though has been clouded by lawlessness and internal displacement in almost every region of the country. Ethiopia had the largest number of internally displaced people in the world last year. The compounding instability has led to the loss of lives and property and the postponement of an already belated national census.

If there was speculation last year shortly after the Prime Minister took office on whether Abiy would be a reformer true to his words and could address the nation’s mountainous challenges, no one has a clear answer yet.

Eagle Hills Seeks to Bulldoze Two Buildings

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Eagle Hills’s new design for the La Gare Eagle Hills Project proposes to demolish the state shipping enterprise’s headquarters as well as a multi-purpose building.

Located on Ras Mekonnen Street, one of the building is owned by Ethiopian Shipping & Logistics Services Enterprise, while the other building is jointly owned by Varnero and the Federal Housing Corporation and is used as a residential apartment, office and commercial space.

The Abu Dhabi-based private real estate company submitted the design for the 50-billion-Br La Gare Eagle Hills Project to the Deputy Mayor last Wednesday, March 27, 2019, proposing to incorporate the plot on which the two buildings rest.

Launched in partnership with the City Administration, Eagle Hills has pledged to complete the project in seven years. While granting Eagle Hills the land free for a 99-year lease, the city administration retains a 27pc share in the project.

The project, which will rest on 36ha, was launched four months ago in the presence of Prime Minister Abiy Ahmed (PhD), Deputy Mayor Takele Uma and Eagle Hills Chairperson Mohammed Alabar. Alabar, the eldest of 12 siblings, is the developer of Dubai’s Burj Kalifa skyscraper through his company, Emaar.

The project encompasses three hotels, a mall, 4,000 apartments and entertainment complexes. It is also expected to provide employment opportunities to 25,000 people. The developer of the project, Eagle Hills, was established four years ago and has been engaged in major international real estate construction in Africa, the Middle East and Eastern Europe.

Receiving the design of the project, the Deputy Mayor’s Office has formed a committee that will be reviewing the request of the company. Representatives from the city’s Water & Sewerage Authority, Roads Authority, Housing Corporation, Planning Commission and Construction Permit & Control Authority constitute the members of the committee.

The committee will review the new design in line with the structure made by Planning Commission, according to sources close to the case.

Even though Eagle Hills came up with the plan to demolish the two buildings, the Abu Dhabi-based firm was given a clear guideline about conservation of heritage and properties, according to a source close to the case.

Located in the heart of the city, the place has an emotional attachment to the residents Addis Abeba. The oldest and the first train line in the country, Addis Abeba – Djibouti, was headquartered at La Gare. The train station, completed in 1917, has been used as the hub that links the south and east with the central highlands.

Part of the 36ha of land is already cleared, while another, approximately 10ha of land, is occupied by 1,600 households who reside in the area. The agreement between the city and Eagle Hills calls for these residents to get housing units at the site after the completion of the first phase.

Though the project was launched four months ago, Eagle Hills, which is working on 12 city construction projects, including a waterfront project in Serbia and residential apartments in Jordan, did not submit a work schedule or start clearing the area.

CEO of Shipping Enterprise, Roba Megersa, confirms to Fortunethat he is not formally aware of the issue.

Shipping Enterprise, which is planning to move the newly built building that is located nearby the current headquarters, which was built two decades ago for 31 million Br.

The local construction firm Tekleberhan Ambaye Construction (TACON) is working on Shipping’s head office – a double basement, 18-storey building with a revolving restaurant at its apex. TACON was supposed to deliver the building, which rests on 3,200Sqm of land, this April but is unlikely to finish on time.

The first two floors of the nine-story building are owned by Geom Luigi Varnero, a well-known locally registered construction company, while the Federal Housing Corporation owns the ground and remaining floors, which it rents out to residents and businesses such as restaurant, supermarket, boutiques and cafes.

The communications office of Eagle Hills did not respond to the email inquiries from Fortunebefore the paper was sent to print.

 

It is not normal for the good old Ethiopian state…

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It is not normal for the good old Ethiopian state to leave one of its crucial cabinet portfolios vacant for weeks now. Worqneh Gebeyehu (PhD), the minister of Foreign Affairs since 2016, surfaced in New York last week, according to gossip. He was there perhaps processing his employment contract with the United Nations (UN), after his resignation from the foreign office almost a month ago.

Back home, his office on Menelik II Avenue is still waiting for a new appointment, which will most likely go to someone from the Amhara Democratic Party (ADP), one of the coalition members in the ruling EPRDF. Demeke Mekonnen, deputy prime minister; Yohannes Buayalew, head of the party`s organizational affairs; and Yinager Dessie (PhD), governor of the central bank, have been mentioned now and then as prospective candidates for the job, says gossip. The least interested in the post could be Demeke, gossip claims.

Though nothing has been cemented yet, the wave appears to be in favour of Yinager, at least up until recently, claims gossip. Educated in the UK in environmental economics, he had served as a state minister in the foreign office before he was moved to the National Planning Commission as a minister. Yinager’s likely placement at the foreign office may open the way at the central bank for Eyob Tekalegn, a young and pro-private sector official, who recently completed his doctoral studies, to be the governor, departing the Ministry of Finance where he is serving as a state minister now, heard gossip.

The nation’s army of shepherd-less diplomats is now under the stewardship of Hirut Zemene, one of the state ministers in the foreign office in charge of African affairs. She may have been doing well in taking up additional responsibilities moonlighting in the ministerial role; however, the need to participate in the National Security Council meeting will require the administration of Prime Minister Abiy Ahmed (PhD) to appoint Hirut as acting foreign minister, until the power gamble with the ADP guys comes to a conclusion, claims gossip.

Acting, Hirut is already doing it, judging by her latest appearance before heads of mission of the foreign diplomatic corps, says gossip. Almost all the 120 or so envoys stationed in Addis Abeba did congregate inside a conference hall of a newly completed complex on Ras Mekonnen St. (the road to Filwoha) last week, gossip disclosed. Called to bring the diplomatic community up to speed on the current state of affairs of the nation, it was used to mark the one year journey of the administration at the meeting was chaired by Hirut along with Billene Seyoum, the communications aide of the Prime Minister, who some of the diplomats grumbled about for her fast talking, gossip claims.

Many of the diplomats were not impressed by the meeting, for it revealed not much in the way of either new developments or courses of action, gossip disclosed. Neither were the two ladies challenged by those they recognized to speak; they were only four, gossip revealed.

The head of the EU mission spoke about how remarkable the Prime Minister has been, while the Ambassador to South Sudan reminded the audience how great Abiy is, claims gossip. The Ambassador to Poland raised issues in relation to the internally displaced people, whose numbers were undercut by the chairwomen from what international aid agencies reported, according to gossip.

If at all, both Hirut and Billene have reassured the diplomatic community based in Addis Abeba on the administration’s commitment to ensuring the next national elections will be held on schedule and in a manner that will be free, fair and credible, gossip disclosed.

Premier to Host Fundraising Feast at Menelik’s Hall

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Last week marked the second time that Prime Minister Abiy Ahmed (PhD) faced question time from members of the media since his rise to political power. In a few days, the week will usher in the end of his first year in office, a time that was anything but dull.

Members of the media accredited to the Prime Minister’s Office were shuffled on Thursday into a small, if not stifling, conference room where the inhibiting gaze of the Prime Minister’s security detail was on them. They met him seven months after his first press conference, during which time Abiy has taken the nation through a breathtaking journey consequential to many.

Speaking for close to two hours, the Prime Minister addressed several issues but was preoccupied with controversies concerning the status of Addis Abeba and the absence of law and order in many parts of the country, as well as the straining interparty relationship among members of the ruling coalition. Abiy took credit for what he believed are accomplishments on the diplomatic front and no less success in “arresting economic recession”.

Agreeably, Abiy’s first year has been consequential in many aspects ever since he pledged to make political reforms when he was sworn in before parliament on April 2, 2018. True to his promise, he took bold measures in opening up the political space, earning acclaim near and far.

His administration pursued the policy of freeing dissidents from jail, including prominent personalities such as Andargachew Tsegie, Eskinder Nega, Bekele Gerba, Andualem Aragie and Merera Gudina (Prof). He pushed parliament to lift a state of emergency and delist political parties in exile from being considered terrorist groups, eventually seeing them return home. Insurgencies such as Ginbot 7, the OLF and the ONLF have returned and joined close to 107 parties in signing a party code of conduct.

Abiy’s administration took initiative in forming a legal reform advisory council where laws blamed for constraining the political space were reviewed. An amended law on civil society organisations has already passed the floor of parliament, while laws on media and fighting terrorism remain in the legislative grill.

The Prime Minister’s decision in bringing gender parity after filling half of his cabinet with women was hailed as a beacon of equality across the world. Equally, his diplomatic overture in mending the “no-war and no-peace” deadlock with Eritrea tempted many Ethiopians to collect petitions to nominate him for the Noble Peace Prize.

Indeed, Abiy’s unprecedented popularity peaked when meeting a massive crowd inside the Millennium Hall during a historic visit by Eritrea’s President, Issayas Afeworqi, in July 2018. A month earlier, hundreds of thousands of his supporters rallied behind him in Mesqel Square, where an attempt on his life was foiled, ending the rally abruptly.

It was a solemn moment indicating the challenge his administration was to face in running a highly divided and polarised nation. Holding the centre and ensuring law and order remains to date one of his daunting tasks.

During last week’s press briefing, however, the Prime Minister defended his administration’s record in keeping the country at peace, disclosing the arrest of thousands of suspects allegedly involved in violence in Hawassa, Burayu, Shashemane, Gedio, Benishangul and Addis Abeba. He cited the containment of what he said was “a major crisis” in Somali Regional State where there was a 30,000-member armed militia. The region’s president at the time, Abdi (Illey) Mohamed Omar, has been arrested and charged with gross human rights violations.

The administration’s Achilles Heal remains on the macro-economic front, although Abiy characterised it last week as a front for success. An economy exposed to growing external debt and suffering from a painful forex crunch, Abiy told the media the worst was behind. Despite strong austerity measures mainly criticised by experts as untimely, he claimed the economy is now out of the swamp.

As the backdrop for such mega moves in the political and economic fronts, there have been a couple of projects showing the passion the Prime Minister has for symbolic significance. Sourced from off-budget expenditures, renovating the Prime Minister’s Office, restoring the Menelik Palace and rehabilitating rivers and their banks across Addis Abeba were the most visible. Before the press briefing began, members of the media were given a tour of the palace in an attempt to dazzle them on the quality of the restoration work.

One of the landmarks given a significant facelift is a dining hall built a century ago during the reign of Emperor Menelik. It is now expected to host a fundraising gala dinner, dubbed ‘Dine for Sheger,’ where close to 1,000 people are expected to attend in mid-May. They will have to pay five million Birr for a plate, helping the Prime Minister raise five billion Birr to finance the riverside development work.

The Prime Minister is planning to host the dinner in Emperor Menelik’s ‘Enqulala Bet,’ literally translated as egg house, where royal feasts were once held, attended by the nobility, dignitaries, officials and members of the public. It has a capacity of hosting up to 3,000 guests and will be open for public events in the future.

“The first event the hall will host is the fundraising dinner,” Abiy told the media. “This project has energised me, as it is moving fast with very good project management.”

Construction work has been in high gear over the past couple of months, and the 40,000Sqm palace has been undergoing a massive renovation with an investment of over two billion Birr. Its progress has reached 70pc, with a plan to finalise it early next Ethiopian year, according to people familiar with the project. When completed, it is expected to incorporate a zoo, a children’s playground, a museum, cultural villages and a public reading area.

Much of the money raised from the dinner is planned to be used to revitalise and develop banks and riversides on two rivers in Addis Abeba. They run from Mount Entoto to the plains of Akaki and the reservoir of Aba Samuel, where a new wastewater treatment plant is to be located.

With a target of making the city a metropolitan centre, the primary aim of the project – estimated to cost 29 billion Br and take three years to complete – is to clean the river bed and riverbanks. It incorporates the installations of water treatment plants, tunnel developments and stormwater facilities. It will also include roads, playgrounds, sports fields, shops, bicycle paths, walkways and entertainment sections.

As a pilot project, the City Administration has kicked off a one-kilometre development of the area that extends from Basha Wolde Chilot to Orma Garage near the Sheraton Addis Hotel. A well-established construction firm behind the building of several landmarks in Addis Abeba including the National Bank of Ethiopia, Geom Luigi Varnero was awarded the project two months ago, winning the bid for 2.5 billion Br.

Varnero, which has already completed clearing 49ha of land in the area, was awarded the project after being selected in a restrictive bid against four other Chinese companies. It placed an offer that was 1.4 billion Br lower than the second-lowest bidder. Although it has received a letter of acceptance and was told to start work immediately after Deputy Mayor Takele Uma laid a cornerstone, Varnero has yet to sign a contract agreement with the River Basins & Green Areas Agency of the City Administration overseeing the project.

However, Prime Minister Abiy has disclosed to the media that China has shown interest in financing 12.5Km of the full project, including the area awarded to Varnero. He also said the agreement with the Chinese company would be signed soon.

“The Chinese have agreed to provide us with the initial concept, design and financing for the project,” Abiy said. “The project will be started in four weeks and be completed next year in June.”

Like many things about the modus operandi of his administration, several people within and outside of the government keenly following the progress of the project were dumbfounded in hearing him say that. Meskerem Tamru, president of the Association of Ethiopian Architects, is a professional advising the Deputy Mayor on the technical matters. She was not aware of the development with the Chinese, and her team was informed of the decision to sign the project over to the Chinese from the media.

“We don’t know about the deal with the Chinese,” Meskerem told Fortune. “Varnero is undertaking the project.”

Representatives from Varnero were not available for comment.

These projects may serve the Prime Minister as a needed break from what is expected of him concerning the state of affairs of the nation. Lencho Letta, a veteran politician since the 1960s, believes Abiy needs to put his focus on three issues: restoring law and order; reviewing legislation and reforming democratic institutions, and holding national elections.

“Bigger issues with structural ramifications will have to be dealt with after the elections,” Lencho told the Amharic weekly, Bole Times.

Nonetheless, the ambiguity in the handling of those involved in the rehabilitation project and the unpredictability and uncertainty it created, appears to be the hallmarks of Prime Minister Abiy’s administration in many areas over the past year.

Investigators Wind Down Probe of Ex-Tiret Execs

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Investigators have wound down probes into Bereket Simon and Tadesse Kassa, former executives of Tiret Corporate, and handed over the case to prosecutors.

The two former executives were arrested two months ago on suspicion of high profile corruption, and investigators of the Amhara Regional State Anti-Corruption Commission have been conducting the probes ever since. During the latest court session held last Friday, March 29, 2019, investigators reported that they were done with the probes and transferred the case to prosecutors to press charges.

The suspects have appeared before the Regional High Court eight times and could only manage to get legal representation once, as many lawyers refused to represent them due to harassment and threats they faced from a group that attended the court sessions.

The prosecutors, who received a 613-page audit report, 35-page expert opinion and a list of witnesses from the investigators, have requested the Court grant a 15-day extension to file charges. The bench, which has been reviewing the case for the past two months, has closed the case so that it can be transferred to another bench that will review cases after charges are filed.

The two suspects opposed the prosecutors’ extension request, stating that since prosecutors have been working closely with the investigators they do not need any additional time to file the charges. They have also appealed for bail rights and to have their case transferred to another court by citing their safety and the need to obtain legal representation.

After hearing both sides, the judges ruled that the suspects can request to be granted bail rights and legal representation as both requests are constitutional. The judges also ruled that their appeal to have their cases transferred to another court would be reviewed once charges are filed.

The Court passed over making any ruling on the 15-day extension requested by prosecutors, which confused their families and the public in the courtroom.

Article 109 of the criminal procedure code states that prosecutors shall frame, file and service charges within 15 days of the receipt of a police report.

“If charges are not pressed within two weeks, the suspects can appeal to have their cases dismissed and be released claiming wrongful imprisonment [when someone is detained against his will, without authority and/or cause],” said Adonay Teweldeberehan, an independent lawyer who was once a prosecutor.

Families of the suspects said that they will start to process bail rights for the suspects this week.

Arrested on January 23, 2019, at their homes in Addis Abeba, both suspects were transferred to Bahir Dar on the same day and detained at one of the police stations and appeared before the court two days after their arrests. Even though the families of the two suspects have hired lawyers, the first two lawyers declined to represent them after facing threats by a group of youth.

The families again hired two other lawyers, who could only represent them at the court once, according to Asefu Fente, spouse of Bereket.

“One of them has resigned, and we are searching for another to replace him,” Asefu told Fortune, adding that most of the lawyers they approached were willing to handle the case at first but later on changed their minds due to safety concerns stemming from a menacing group of youth in the city.

The suspects and their families have also faced harassment and intimidation by the group, and the suspects have appealed the issues to the court.

In the latest session, Bereket mentioned his security concerns, saying that both suspects’ families are facing threats and attacks.

The families have filed appeals to different offices including the Office of the Prime Minister, the Attorney General, the Federal Supreme Court and the Human Rights Commission calling for intervention.

Meaza Ashenafi, the chief justice of the Supreme Court, confirmed that the letter was filed at her office.

“I’ve discussed the matter with Yeneneh [Simegne], head of the region’s supreme court, and he has told me that they are working to maintain due process and a fair trial,” she told Fortune.

Asaminew Tsige (Ben. Gen), head of Peace Building & Public Security Affairs Bureau of the regional state, did not respond to phone calls and a text message from Fortune.

During the court session held two weeks ago, Tadesse Kassa, former CEO Tiret, and the owners of companies were charged with eight counts. He was charged for allegedly ordering illegal procurements that did not follow proper bidding procedures, purchasing shares for inflated values and granting loans to non-member companies of the Corporation.

Bereket, former and founding board chairperson, and Tadesse are suspected of alleged corruption related to a process by which Duet, a foreign company, acquired shares of Dashen Breweries.

Ethiopia Seeks $6b to Electrify Entire Population

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Ethiopia is looking for six billion dollars in financing to bring universal electric access to the entire population in the coming six years.

With the recently launched second phase of the National Electrification Program, the government has set its eyes on completing universal electricity access by 2025.

The Program was launched at the East Africa Energy & Infrastructure Summit on March 27, 2019, at the Sheraton Addis Hotel. The event was attended by Seleshi Bekele (PhD), minister of Water, Irrigation & Electricity, and Shifarew Telila, CEO of Ethiopian Electric Utility.

A total of 3.2 billion dollars will be allocated for on-grid infrastructure, and over half of the financing is expected to be pooled from development partners and loans, according to Seleshi.

“Their budget will also be used for building the capacity of institutions,” he said.

The National Electrification Program focuses on integrated grid and off-grid electricity access. It provides an implementation framework for 35pc of off-grid access by 2025.

The Program was originally launched in 2017. The World Bank provided loans and grants worth 375 million dollars for the first phase of the program.

“We’re closely working on the distribution of power,” said Shifarew.

By the end of the second edition of the Growth & Transformation Plan, Ethiopia had planned to increase its electric power generation capability to 17,000MW from its current capacity of 4,300MW.

Hydropower plants produce the largest share of electricity in the country currently, and studies show the nation could one day produce 45,000MW of power from this source, although less than nine percent has been utilised so far.

Private players in the energy sector are supportive of the program, including the two-decade-old Lydetco Plc, an engineering company engaged in the design, import and installation of commercial solar photovoltaic and solar thermal systems, as well as solar home systems.

“We have to create a good business environment if we want private companies to contribute to the off-grid projects,” says Dereje Walelign, managing director of Lydetco.

By 2025, the Program plans to create 8.2 million new grid connections and bring power to six million new households through off-grid solar systems.

An expert applauds the priorities the Program has put in place for non-hydro sources of power.

Ethiopian Electric Power depends on hydro power, which is relatively costly compared with other alternatives, according to Tamiru Debela, a lecturer at Haramaya University’s School of Electrical Engineering.

“We have to focus on other alternatives such as wind, solar and geothermal,” Tamiru said.

Formation of Judge Vetting Commission Faces Opposition

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A proposal for the formation of a vetting commission for judges is facing strong opposition from some legal circles.

The vetting commission was proposed to check on the background of judges, investigate judges that have a history of complaints lodged against them and forward its recommendations to the Federal Judicial Administration Council for final action.

Proposed by the Office of the Chief Justice, Meaza Ashenafi, the commission is intended as a vehicle to restore public trust to the courts and justice system of the country and was presented at a stakeholder discussion on Saturday, March 23, 2019, at Capital Hotel on Haile G. Selassie Avenue.

Abeba Mulat, an outside consultant, hired by the Office of the President of the Supreme Court to advise on the reform process came up with the idea to solve issues related to human resource administration in the court system.

“Different complaints have been lodged accusing some judges of bias, corruption and for having affiliations with political parties,” said Solomon Ejigu, communications director at the Federal Supreme Court.

The plan for the commission is to be temporary, with a life span of half a year, with the possibility of extension for two months.

It will have nine members of which two-thirds will be lawyers with at least 15 years of experience.

Chaired by Meaza and her deputy, Solomon Areda, the discussion was attended by lawyers, academics and judges who strongly opposed the formation of the commission.

The complaints against the formation of the commission ranged from accusations of contradiction with the law; overlapping of duty with the Judges Administration Council; being a tool for political purposes; a counterproductive process that erodes confidence among judges; and a means that will result in a high turnover of judges.

Tilahun Teshome (Prof.), a lecturer at Addis Abeba University School of Law, strongly opposed the formation of the commission.

“The recommendation doesn’t look like a legal document,” Tilahun said. “It looks more like a political document.”

Tilahun said that the Dergueand the current ruling party have made similar attempts previously using the process as a tool to target some judges.

Attendants also argued that the drafting process has excluded certain stakeholders, such as the Law & Justice Advisory Council. The Council has 17 members and three subcommittees to recommend reforms in the legal system to the Prime Minister and is chaired by Webeshet Ayele.

During the same session, the Advisory Council presented a bill for the re-establishment of the Federal Judicial Administration Council for discussion. The amendment focuses on the powers of the Council, its membership composition and representation.

Making the courts independent, impartial, accountable and trustworthy are the major reasons for the amendment of the proclamation, according to Mandefrot Belay, chairperson of the subcommittee under the Advisory Council.

 

United Insurance Settles 24m Br Claim

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East African Tiger Brand Industries, a manufacturer of personal care and food products, received 24.1 million Br in claims from United Insurance Bank on March 28, 2019.

The compensation was paid for fire damages incurred by East African at its Bishoftu warehouse on January 31, 2019.

East African Tiger Brand has been a client of United Insurance since September 2017 and had renewed its policy. The policy covers 13 different areas that range from automobiles to workers’ safety.

The Insurance Company paid the claim at the head office of East African Holdings S.C on Ethio-China Street. The company, which has 1,000 employees, has four units, which produce personal care, home care, packaging and food products. Since the company lost raw material it had imported in the warehouse fire, it had to continue production using local supplies, albeit at a slower pace.

The company was formed as a joint venture by East African Holdings and South African Tiger Brands almost a decade ago and was announced dissolved in 2016. East African Holdings EAG made an offer to buy Tiger Brand’s shares, and the divorce was completed last year.

Now that private companies are allowed to construct and rent out industrial parks, East Africa is planning to develop its land with sheds that can be used for industrial purposes, according to Ahmed Nuru, chairperson of East African.

“United should be commended because it finished its assessments as quickly as possible and settled our claim,” he said. “The fact that we were able to receive the compensation this quickly will help us get back to producing at our previous capacity as soon as possible.”

United Insurance is one of the oldest insurance companies in Ethiopia. Established a quarter of a century ago with 25 million Br in paid-up capital, it paid 216 million Br in claims in the last fiscal year, an 18.6pc increase from the previous year.

The highest claim United paid was 52 million Br, and it was settled with the Ethiopian Roads Authority (ERA) six years ago. United was a guarantor for advance payments extended by ERA to Tibebe Construction and for the due performance of the contractor. The contract was later terminated by ERA.

Fire accidents are commonplace at factories, which is why almost every factory has fire insurance, according to Sewale Abate (PhD), assistant professor of finance and investment at Addis Abeba University’s College of Business & Economics.

“In a country where it’s usual for insurance companies to drag their clients through lengthy court battles, what United did could help it gain more clients,” said Sewale.

Charity Services Arrive at Abay Bank

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Abay Bank has launched a service specifically designated for charities, the first of its kind in the country.

The Charities Savings Account Service was launched at the Intercontinental Addis Hotel in the presence of representatives from governmental and non-governmental donor organisations on March 19, 2019.

The savings account could be opened by individuals or entities, or for children and the sick by donors, which would be managed by their parents or legal representatives. The Bank provides an eight percent interest rate for charities’ savings accounts, a percentage point higher than the Bank’s normal deposit rate.

“The bank aims to expand its customer base and serve humanitarian organisations and individuals,” said Belete Dagnew, vice president of corporate service at the Bank, which has 185 branches all over the country and serves over a million account holders.

The savings account requires a minimum deposit of 60,000 Br for donor individuals and 100,000 Br for organisations, which will be held as a block account. After a year, customers can start donating from the account to an organisation or individual of their choice.

The Bank has also arranged an option that enables donors to increase interest rates based on the amount of deposits they are willing to make.

Donor organisations have raised their concerns on the implementation of the service, arguing that they run project-based donation programs and that they may find it hard to open block accounts.

But Adugna Abebe, branch operation director of the almost decade-old Bank, which had 4,080 shareholders and a paid-up capital of 1.3 billion Br at the end of last fiscal year, says that the assessment conducted by the bank shows that most organisations have enough working capital to gain from the service.

“But we are flexible and willing to adjust based on the feedback we get from the customers,” he said.

Currently, Abay, which reported a 66pc rise in its net profits to 317 million Br during the last fiscal year, is providing five basic products that incorporate more than 17 services within them.

Banking experts appreciate the new product, arguing that this shows the financial institutions’ competitiveness and creativity to attract more customers and increase their profitability.

The service would encourage people who wish to help others but do not have access to the organisations or information concerning where the people in need of the aid are, according to Habib Mohammed, a financial expert with a decade and a half of experience in the sector.

“As most of the charity organisations are generating hard currency, it could also be a good source for the Bank and the nation,” he said.

Two Firms Team up to Provide Ag Info

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Two companies have partnered to provide digital insights to smallholder farmers in Arsi Zone using Internet of Things (IoT) technology, artificial intelligence and analytics in a bid to fill a missing gap in the agricultural sector.

Techno Brain and Green Agro Solutions Plc signed a partnership agreement to provide digital insights to more than 100,000 farmers in Arsi Zone who produce malting barley. The information includes weather forecasts, pest detection, advisory service and mechanisation equipment that will help farmers increase their productivity.

Farmers will receive information about the best crops to plant, optimal sowing weeks, pest infestation alerts, adverse weather notices, preferred harvesting times, market information and farming tips through mobile devices via text messages and voice platforms. The companies will also provide information to the development agents that assist the farmers via a mobile application.

“The platform will create insights that help farmers in Ethiopia make better farming decisions,” said Abraham Endrias, managing director of Green Agro Solution.

To get the service, the farmers will pay 58 Br a hectare annually once they subscribe to the service by paying 117 Br.

As part of the partnership, Techno Brain offers its platform, Digital Agriculture, that collates data from farm locations using crop life cycles, seed details, land types, soil nutrition, global positioning system (GPS) coordinates, expected rainfall and weather patterns and processes the information using artificial intelligence. Techno Brain will also provide support and training.

For its part, Green Agro Solutions, which has been working in the Arsi region for over five years, will be responsible for creating digital farmer profiles, conducting farmer outreach, feeding data to the platform, advising farmers and communicating with government partners on the progress of the project.

Green Agro Solutions has a farm service centre in Sagure town of Arsi Zone that offers farm inputs, vetrinarian drugs, animal feed, mechanisation services, training and credit services.

A pilot project on the digital platform with over 5,000 smallholder farmers who grow barley and faba beans is underway, while the full project is expected to be launched at the end of May.

Out of the 5.4 million farmers in the Oromia Regional State, over 520,000 are in Arsi Zone cultivating 620,000ha of land mainly cropping wheat and malt barley.

Even though the country has 73 million hectares of arable land, the agricultural productivity at the national level remains low, accounting for 21.5ql a hectare for barley and 27.4ql a hectare for wheat.

The platform will help the farmers improve crop yields and quality, provide better access to market prices and increase income, according to Mekonnen Tesfaye, country director for Techno Brain Ethiopia, one of the 23 companies operating under Techno Brain.

“If we increase productivity by 25pc using such technologies, not only does the country feed its population, but also it saves hundreds of millions of dollars in foreign currency from the importation of grains,” said Mekonnen.

Malting barley was chosen for the project as there is a huge demand by malt factories, according to Abraham.

Currently, Ethiopia imports 70pc of its malt to satisfy demand. Two international malt companies, Bootmalt and Soufflet, are in the pipeline to join the two operational malt processing plants in Assela and Gonder, which source barley locally.

Starting from next year, the project will expand to East and West Gojjam, Bale and East Shoa zones, according to Abraham.

A similar information systems project was started nine years ago by Nyala Insurance, which then launched a Weather Index Insurance Policy, according to Mohammed Adem, an agricultural economist and an assistant professor at Haremaya University.

“For the service, the insurance firm has collected and analysed two decades of productivity data,” said Mohammed.

Since then, the system has been expanding. Now the Ethiopian Commodity Exchange (ECX) operates a farmer information system that focuses on traceability, while the Ethiopian Agricultural Agency (ATA) has also designed a farming advisory services division.

Recently, the Ministry of Trade & Industry invested four million dollars in setting up the National Market Information System that will provide market price information on teff, wheat, sesame, haricot beans and corn to farmers, traders and consumers through text messages or interactive voice response (IVR) calls.

Mohammed views the new project positively in principle, especially because it has the perspective of the private sector in the service.

“It is a good move, as the government is also considering private sector participation in every sector,” Mohammed said.

Hence, he recommends the project to be well organised, comprehensive and to be transparent in the contractual agreement between the farmers.

“Fulfilling all these, the project can empower the farmers,” Mohammed said.

City Hires Overseas Firms to Supervise Transport Master Plan

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The City Road & Transport Bureau has hired three companies that will supervise the design of an Intelligent Transport System Master Plan, an integrated program for traffic management and pedestrian safety.

Expected to cost 600 million Br and financed by the World Bank, the project will integrate traffic management and pedestrian safety throughout Addis Abeba by way of corridor and intersection improvements using traffic management technologies.

The system also provides real-time traffic information to commuters, which enhances their safety and comfort by reducing traffic congestion and longer trip times.

The lead German consultancy firm, H.P. Gauf Ingeieure Gmbh & Co, will jointly undertake the project with PTV Transport Consultant Gmbh and WYG International B.V.

Gauf secured the project after vying against 36 other international companies that expressed interest, with six finalists making the cut.

The Bureau will be installing the system to improve five main corridors, 132 road junctions, 22 existing signalised locations and 27 other on-going intersections. The six-year project comprises of detailed study and design of construction corridors, road junctions and traffic management centre.

The project is intended to regulate traffic management in the city in order to reduce traffic, according to Behailu G. Eyesus, head of the Transport System Improvement Program Implementation Unit.

The development of the master plan will optimise the existing system by using efficient design, according to Behailu.

Corridors that extend from the British Embassy to Africa Avenue; from Arat Kilo to Atikilt Tera; St. George Church to Gojam Berenda; Arat Kilo to Bras Hospital; and Dej Omer Semeter School to the Grand Palace are the five corridors selected for the project.

Implemented in two phases, the first phase includes a study and design, while phase two comprises supervision work and capacity building. Installation of CCTV cameras and traffic lights,  will also be included in the project.

The roads in the city are becoming more congested, according to Tamene Belle, communications director for the City Traffic Management Agency.

“More than 20,000 additional vehicles join the roads every year, fueling the traffic congestion in the city,” he said.

The total number of registerd vehicles during 2017/18 was 553,938.

At the same time accidents are increasing in the city. Reports show that more than 456 people, mostly pedestrians, die by car accidents every year. A year ago the city recorded 478 deaths, 3,133 injuries and 28,289 road accidents.

Fekadu Gurmessa (PhD), a lecturer on transport geography at the Addis Abeba University for more than a decade, commends the project.

He says that the city is growing in size faster than the infrastructure development in the capital. Therefore, more people cause more road congestion and accidents.

To solve the problem sustainably, he suggests the implementation of a motorisation policy, which promotes more use of public transport for controlling traffic congestion.

“For the best implementation of the new system, the city needs additional ring roads to create alternative road connections,” Fekadu said.