2019/20 budget year capital expenditure in Birr on water resources and energy.
Month: September 2019
“Unacceptable.”
Sileshi Bekele (PhD), Minister of Water, Irrigation & Electricity, referring to Egypt’s proposal for filling and operating the Grand Ethiopian Renaissance Dam.
BULLFIGHTING
This is not in Spain, and those are no matadors trying to fight the bull. It is in Mesqel Square right here in Addis Abeba in the middle of Mesqel celebrations. A stray bull ran right into the middle of the square and the celebrating crowd injuring a few and frightening many. The equally frightened bull finally ran back to the same street it came from.
Safeguarding Secularism from Faith Encroachment
The creeping of faith in public policymaking into the already fractious identity politics in Ethiopia calls for alarm. A diverse country where an overwhelming majority of citizens are devout followers of one religion or another, the political architecture in its legal and institutional setting has been built around linguistic-cultural fault lines.
Democratic institutions are weak, if not too frail, to enforce secular values engraved in the Constitution. In such a delicate environment, the introduction of faith into the mix of the state’s business amounts to adding fuel to the fire.
Ethiopia has come a long way toward undoing such convergence of the state and the church. One of the less noted but more fundamental changes the revolution in 1974 brought to Ethiopia’s governance system was the separation of the two institutions. Many may not remember that one of the first public demonstrations held in protest against Emperor Hailesellasie’s government was by Ethiopian Muslims demanding equality of faith in the eyes of the state.
Until then, the church had a share in the way the monarchy ran the affairs of the state. Of course, the Dergue, flirting with atheism born of Marxism, went further than the secularisation of the Ethiopian state. It devolved into persecution of people of faith in general and adherents of Protestant Christianity in particular.
Despite such a misguided overzealousness with considerable damage in violation of citizens’ fundamental rights – of faith, thought and speech – the secularisation of the state was one of the few positive contributions of the officers to the country’s governance.
Advances in human affairs have followed that pattern of the decoupling of religion from public life. Not without reasons.
The dominance of public life, whether by the Papacy or the Caliphate, had often been sources of conflict because of internal power struggle and external wars.
The atrocities brought against humanity during the times of Inquisition and the Crusades are fresh in the pages of human history to serve as unfading lessons. The 30-year war in Europe in the 17th Century was essentially a religious conflict that later evolved into a political and power struggle to rule the Roman Empire.
The fight between mainly Catholic and Protestant nations in one of the longest and brutal wars in history reconfigured the map of Europe. But not before causing an estimated eight million people to perish. Historians assert that the Peace of Westphalia that ended this war laid down the foundation that ushered in the modern nation-state as we know it today.
The lesson of history was that the earlier Crusades and the latter wars were caused in no small part due to the mingling of political and military power with religious dogma. The modern state, in contrast, was to be established on the premise that citizens of a state, irrespective of their allegiances to any faith, are under the laws of that state, which is supposed to deal with them according to the general will without regard to the affiliation of faith.
It came as a result of a sober realisation that no one has custody to absolute truth as revealed by a transcendent power.
Historical factors after the Reformation also proved to the church that close proximity to power and intimate involvement with temporal authorities coincide with periods of the church’s history where it has abandoned its mission and committed regrettable errors.
And courage to admit error and ignorance does not lay with people of dogma who fail to distinguish between truth and faith. The first is something that must be examined against evidence, and the latter is something that needs to be followed in absolutism.
“A society of courageous people willing to admit ignorance and raise difficult questions is usually not just more prosperous but also more peaceful than societies in which everyone must unquestioningly accept a single answer,” writes Yuval N. Harari, the author of the highly praised book “Sapiens,” in his latest book, “21 Lessons for the 21st Century.”
One of the founding fathers of the greatest experiment in self-government that has become the United States, Thomas Jefferson, coined the phrase “a wall of separation between the church and the state” as being the best possible system of governance for a democratic state. Neither favouring any religion nor interfering with the rights of citizens to freedom of religion, such a state seems to be the best answer to administer a modern, diverse and democratic state.
It can be argued that this is a utopian ideal that is hard to attain. That there is always some level of interactions between the two may sound a valid argument. However, it is equally true that whenever that principle has been disregarded, conflicts invariably followed.
Indeed, many of the intractable conflicts around the world – from the Irish conflict to the Middle East, and from Kashmir to the Bosnian War – involve the intermixing of religion, ethnicity and politics. They were all fueled by divine guidelines, provocative slogans and inspiring battle cries.
The architects of Ethiopia`s Constitution were cognizant of such carnage when composing the article on the separation of the state and religion. It reads: “State and religion are separate. There shall be no state religion. The state shall not interfere in religious matters and religion shall not interfere in state affairs.”
They are to be commended for their insight in instituting such a secular code as a safeguard from dogmas of “eternity, purity and redemption.” It has served the country well in spite of its imperfect application in practice.
Staying the course on that ideal is the wise course of action.
There might be an understandable temptation to get dragged into some peacemaking role by those in the highest offices to correct perceived historical wrongs. However, in the long term, the right approach would have been to follow the constitutional rule of non-interference.
Worrisome signs are emerging, too. There is an increased presence of religious figures at public policy events where heads of state and government are present. A blurring of political and religious discourse in state functions is creeping. There is at least a perception of the disproportionate influence of religious groups in public policy.
These are concerns that should not be easily dismissed. If a certain segment of the population feels excluded or perceives others as being given more access and proximity to power, it creates an unhealthy political environment.
It is important that those entrusted with public office pay heed to these early warning signs and make the necessary corrections.
However, even though the main onus is on officeholders, this responsibility is not limited to them only. Politicians in the opposition and activists of all stripes should also refrain from trying to use religion as a mobilising tool for political ends. It may be an easy and powerful means of public mobilisation, but they should resist the temptation to use it, because it does more harm than good in the long term.
SHARING A LAUGH
On Sunday, September 15, 2019, Prime Minister Abiy Ahmed (PhD) with his spouse Zinash Tayachew and Deputy Prime Minister Demeke Mekonnen were sharing a laugh at a light moment during a trip to Bonga, Keffa Zone. Abiy, who does far more travelling than his predecessors, has crisscrossed the length and width of the country in the little over a year that he has been in office. This time he pulled a rare surprise on the press corps. Unlike his predecessors who only take a few journalists from the public and party media departments on such trips, he had over 40 journalists from different local and international outlets join him on this outing. He walked the aisle of the plane on the flight to Jimma, greeting each of them.
The purpose of the trip was to have a town hall meeting with restless residents and their leaders who have been asking for more infrastructure projects in their area as well as expressing their desire to form their own regional state, breaking away from the Southern Nations, Nationalities & Peoples’ Regional State, whose new Deputy President Restu Yirdaw and Defence Minister Lemma Megersa were part of the visiting dignitaries. The Prime Minister held discussions with the public that had been gathered since early morning waiting for him. It was a sort of homecoming trip for Abiy, who grew up in the nearby small town of Beshehsa, a few kilometres from Jimma. He was warmly received by the crowd that was listening carefully to his argument that regional reconfiguration is not going to solve all their problems. Whether they were convinced remains to be seen.
City’s Move on Taxi Hailing Services Faces Strong Backlash
Our subscribers to the print edition are entitled to get a bonus in a form of early access to our digital edition.Use the bank detail below or call our office at +251-011-416-3020 to subscribe – only 657.00 Br for 52 editions – and enjoy access to www.addisfortune.news beginning on SUNDAYS as early as 6:00am!
Bill Unlocks Mobile Money Service
Non-financial institutions, including Ethio telecom, will soon be able to engage in mobile money services if the central bank approves an amended directive.
The 20-page bill, which has been in the making over the past year, proposes allowing non-financial institutions to engage with electronic payment and money transfer services, which were prviously only reserved for banks and micro-financial institutions. The directive also opens doors of investment for private commercial companies and government institutions to operate as Payment Instrument Issuers.
In drafting the directive, the National Bank of Ethiopia, which has been rolling out a couple of reforms in the financial industry over the past year and a half, aims at improving financial inclusion for a more significant proportion of society, which is currently outside the reach of financial services.
Partnering with banks, insurance companies, micro-finance institutions and social security agencies, Payment Instrument Issuers would be allowed to give savings and credit services, sell insurance products and pay out pensions, according to the new directive.
“Innovative payment instruments are important to increase the use of financial services,” reads the draft directive, “thus the inclusion of Payment Instrument Issuers is key to mitigate associated risks and maintain the reliability of payment instruments.”
In Ethiopia, a country with a population above 100 million, only 20pc of the population is banked. The population living in rural areas are largely unbanked.
While mobile money is at the infant stage in the country, neighbouring Kenya has gone far in the service. M-PESA, the well-known mobile banking brand with over 17 million Kenyans as customers, allows Kenyans to even pay for taxis using the system.
“Since Ethio telecom already has a large number of subscribers,” said Cherer Aklilu, executive director at Ethio telecom, “it will play a significant role in improving financial inclusion by allowing our clients to use the service.”
As of the end of the last fiscal year, Ethio telecom has 41.9 million mobile voice subscribers and 22.3 million data and internet users.
The company, which is going to be partially privatised in the next few years, plans to provide the service through a dedicated unit that will be a subsidiary of the parent company, according to Cherer.
Mobile banking was introduced in Ethiopia along with agent banking seven years ago, and currently about half of the commercial banks provide the service.
In bringing many operators onboard, the directive, drafted by the central bank following a request from Ethio telecom, allows share companies to venture into the service. Registered business companies that are wholly owned by Ethiopians and non-nationals with Ethiopian origin can apply for a license from the central bank.
The directive requires companies to have a minimum capital of 50 million Br to apply for a mobile money service license. The majority shareholder of these companies should not hold more than five percent of the total capital, according to the draft directive.
“To ensure maximum protection on electronic transactions,” reads the directive, “payment instrument issuers shall apply two-factor authentication for transaction amounts greater than 1,000 Br.”
The draft directive allows three levels of transactions. Under the first level, the maximum permitted account balance is 3,000 Br, with an aggregate daily and monthly transaction limit of 300 Br 6,000 Br, respectively.
In the second level accounts, the maximum account balance allowed is 15,000 Br. The aggregate daily transaction limit is 2,000 Br, while the total monthly transaction limit stands at 25,000 Br. The maximum account balance in the third level is 25,000 Br, while daily and monthly transaction limits stand at 5,000 Br and 50,000 Br, respectively.
Even though it is late, the directive is an excellent move by the central bank, according to a financial expert with decades of experience in the banking industry, who pointed out the successful experience of Kenya with mobile money.
The expert adds that the only way to achieve financial inclusion and going to a cashless society is with innovative approaches and not sticking with old and conventional methods.
“Yet, in a bid to attract many users,” said the expert, “the central bank still needs to relax the restrictions on daily and monthly transactions as well as limits on the account balance.”
Ministry Procures Wheat to Stabilise Shortage
The government has started the process of procuring four million quintals of wheat worth an estimated 3.4 billion Br to curb the sharp shortage of milling wheat in the market.
On behalf of the Ministry of Trade & Industry, the Public Procurement & Property Disposal Services announced a tender two weeks ago inviting companies to supply wheat that will be used for market stabilisation. The financial opening of the bidders is scheduled to take place on October 23, 2019.
The first wheat procurement of the current fiscal year aims at stabilising the shortage of wheat in the local milling and bakery industries. A total of 1,650 bakeries and 44 wheat flour factories are registered in the capital. Ethiopian Business Corporation will be responsible for the distribution of the wheat.
In the last fiscal year, the Services procured 1.7 million tonnes of wheat from four international companies on behalf of Ethiopian Business Corporation, the National Disaster Risk Management Commission and the Ministry of Agriculture. For the procured wheat, the government spent 11.1 billion Br.
Gem Corp Commodities Trading and Agro Corp International PTE supplied 1.6 million tonnes of wheat at a cost of 9.6 billion Br. The wheat was distributed by Ethiopian Business Corporation and the National Disaster Risk Management Commission. The Ministry of Agriculture distributed the 155,000tn of wheat supplied by Promising International Trading and Hakan Agro DMCC for 1.4 billion.
This wheat was imported into the country that is identified as the largest wheat producer in Sub-Saharan Africa. In the 2017/18 harvest year, Ethiopia produced 4.5 million tonnes of wheat. Arsi, Bale and Shewa are the major areas known for wheat production. The grain was cultivated by 4.7 million smallholder farmers who occupy 1.7 million hectares of land.
Out of the total production, 95pc of the wheat comes from smallholder farmers who are dependent on rain, whereas the remaining five percent is from large commercial farms.
Studies show that 59pc of the wheat produced in the country is for consumption by the farmers, while 20pc goes to the market, and the rest is used for seed production. From the total, annual consumption of wheat amounted to 6.3 million tonnes, with 30 to 35pc of the demand covered by imported wheat.
The shortage of wheat has a more significant impact on the life of households in the developing nation, according to Mohammed Aman, assistant professor at the School of Agriculture Economics & Agribusiness under Haromaya University.
“Wheat-based foods hold the major share of household diets,” he said, “thus, increases in wheat prices and market destabilisation will have noticeable effects on the cost of food.”
The government has to work on increasing the number of suppliers when there is a shortage of wheat, he recommended.
Star Business Group Co-founder Dies Suddenly
A prominent businessperson, Menwyelet Atnafu, died yesterday morning, September 21, 2019, due to what close friends suspect was a stroke.
The co-founder and shareholder of Star Business Group (SBG), Menwyelet was at the Hilton hotel early yesterday morning where the incident happened that led to his death. The day before the incident, he had arrived from Bahir Dar City, Amhara Regional State, where he attended the launching ceremony of new road projects.
On Saturday, Menwyelet woke up early at 5:00am to head to the gym at Hilton Addis Abeba Hotel where he was a regular customer and member. At the Hotel he met with Abebaw Desta, his long-time friend and business partner. Menwyelet was complaining of minor pain in his leg and had difficulty walking.
He wanted to get a body massage but was told the service was not available before 7:00am, according to shift workers of Hilton Addis Hotel during the incident. He then decided to swim but was momentarily found drowning by the on-duty lifeguard.
He was taken immediately to Betezata General Hospital, off Ras Mekonnen Avenue in Stadium area, where he was pronounced dead on arrival, according to family members.
The prominent businessperson was born and raised in Gojjam, Amhara Regional State. He got married in 1972 and later moved to the capital in 1982 where he began his life long career in business.
Menwyelet founded SBG in 1997 together with Abebaw, while another prominent businessman, Worku Merga, became a shareholder.
SBG was a major trading house in the 1990s before the trio was arrested a number of times due to alleged involvement in grand corruption. They were all acquitted from many of these allegations subsequently.
The court battles that lasted for around a decade began in the early 2000s following a series of crackdowns by the then Federal Ethics & Anti-Corruption Commission.
The former suspects, together with other defendants, were accused of receiving loans for SBG and its affiliates, Meskel Flower Plc, Abeba Gidey Plc, Legeta Trading Plc, Ethio-Investment Group, Nile International Plc, Brehan Assefa Coffee Exporters, and Ab-Mar International Plc, in violation of the bank policies and manuals.
The business people remained in jail fighting charges brought against them. The companies the defendants owned were put under a caretaker management committee chaired by the then secretary-general of the Ethiopian Chamber of Commerce & Sectoral Association.
The companies remained in business, and the profits they made were ordered kept in blocked accounts. Nonetheless, they continued to owe a huge debt to banks, including the Commercial Bank of Ethiopia and Bank of Abyssinia, as well as Wegagen and Dashen banks.
After four and a half years in jail, they had all been acquitted from their charges and were released from prison in 2005 to claim their companies, cash and piles of debts due to unpaid interest and penalties.
However, the trio was again put in jail together with other prominent business people, former executives of Nile Insurance and Bank of Abyssinia, in 2009.
But again, with the defendants lingering four months in jail and the case being dragged for four more years, the charges were dropped after the then Ministry of Justice ordered the withdrawal of criminal proceedings against the defendants in 2013.
“Menwyelet was a hardworking man who wanted the people around him to grow with him,” said Wondu Beze, a long time friend.
The body is expected to be put to rest on Sunday, September 22, 2019, at St. Rufeal Church. Aged 65 at the time of his departure, Menwyelet is survived by six children.
Abay Industrial Ventures into Mining
An economic wing of the Amhara Regional State has secured three mining licenses to extract red soil, limestone and gypsum for an investment of 140.7 million Br.
Abay Industrial Development SC secured a 20-year license from the Ministry of Mines & Petroleum, to source raw materials for its cement plant that is under construction in Eastern Gojam Zone, Dejen Wereda, Amhara Regional State. The construction of the 8.8-billion-Br cement plant was begun in March 2019.
Expected to take two years to be constructed, the plant is expected to create 2,200 jobs and will have the capacity to produce 7,500tn of cement a day. It is also expected to start trial production in 28 months.
The agreement was signed between Samuel Urkato (PhD), minister of Mines & Petroleum and Demes Teshager, manager of Abay Industrial Development, at the premises of the Ministry last week. For the concession, Abay will pay 25pc income tax, a four percent royalty and five percent to the federal government as a shareholder.
Abay, a public-private partnership formed with four billion Birr in registered capital raised from about 516 investors and state-owned enterprises in the Amhara Regional State, has been conducting a feasibility study since 2016 and submitted the findings of the survey to the Ministry, according to Demes.
For the red soil extraction, which will be undertaken at a cost of 17.4 million Br, Abay secured about 1.4 square kilometres of land in Eastern Gojam Zone, Dejen Wereda, Sasa Braye. In the first decade of the license period, the company is expected to extract 5.8 million tonnes of red soil. This project will create jobs for 24 people.
Investing 32.1 million Br in 0.75 square kilometres of land in Dejen Wereda, Minej area, Abay plans to extract 1.2 million tonnes of gypsum in 10 years. Thirty-one people will operate the mining site.
The limestone extraction will be undertaken at a cost of 90.6 million Br and will operate with 59 employees. Covering 3.74 square kilometres of land in Dejen Wereda, Menej and Kurar areas, the site is expected to produce 21.1 million tonnes of limestone in the first decade of the concession.
Abay is expected to start development work within 60 days and extraction in two years, according to Beamlak Alemayehu, director of legal affairs at the Ministry, which operates with 370 employees.
So far, the Ministry has issued a total of 13 licenses in this new fiscal year. In the last fiscal year, it had issued 24 mining licenses out of the requested 60, a record high. Out of the total licenses, 19 were for exploration, while the remaining five were for extraction. The concessionaires will invest a total of 4.9 billion Br and create 1,200 jobs when they become fully operational.
Mining is one of the areas that has received special attention by the administration of Prime Minister Abiy Ahmed (PhD). The current economic reform agenda of the administration identified mining as one of the pillar sectors to generate foreign currency and create jobs.
However, the sector has been suffering for the past couple of years. Export revenue has been significantly falling. Six years ago, the export of mineral products generated 650 million dollars; however, it dropped to 49 million dollars in the last fiscal year.
To rescue the ever declining revenues from the sector, the Ministry formed a National Steering Committee recently. The 12-member committee is composed of experts from the Ethiopian Geological Survey, Mining, Oil & Biofuel Corporation and the Ministry and is tasked with assessing the problems of the sector and suggesting policy reforms to the industry.
“We’re also working aggressively to attract foreign investors,” said Samuel.
Last month the Ministry digitised the license issuance process that enables companies in the mining sector to communicate and interface directly with the Ministry. The Prime Minister also allowed foreign oil and gas exploration and development companies to open an offshore or a foreign bank account.
Currently, there are a total of 208 businesses with licenses to engage in the mining sector, while the industry provides livelihoods for 177,000 people who are involved in artisanal mining and 2,000 people employed formally by mining companies.
Ayenachew Alemayhou, department head of geology under the School of Earth Sciences at Bahir Dar University, recommends the company rehabilitate the area after the concession has expired.
“It has to rehabilitate the site to conserve the environment,” said Ayenachew.
Ayenachew also says the mining sector of the country is struggling against the backdrop of the contraband trade and a lack of trained human resources.
“The industry operators should use appropriate technology,” he said, “to reap the fruit of their investment properly.”
Authority Commences Two Mega Road Projects
The Ethiopian Roads Authority kicked off the construction of two mega road projects in the Amhara Regional State for 2.2 billion Br.
The projects were launched at the end of last week with the presence of Deputy Prime Minister Demeke Mekonnen, Minister of Transport Dagmawit Moges and Deputy President of Amhara Regional State Temesgen Tiruneh. Expected to be completed in three years, one of the projects is a road that connects Bahir Dar to Tis Esat, while the second one is a bridge over the Abay River.
Bahir Dar – Tis Esat Road, made of asphalt and concrete, extends 22.3Km and costs 767 million Br. Melcon Construction Plc, a local construction company, was hired for the project in July 2019.
Melcon, which was founded 18 years ago, constructed the Yeka-Ayat and the Melka Jebdu-Dire Dawa road projects at a cost of 130 million Br and 63.5 million Br, respectively. Melcon is also constructing a 4.5Km road that extends from Haile Garment to Jemo Square in the capital that costs 536 million Br.
The Authority is in the process of hiring a consulting firm that will supervise and consult Melcon on the project.
The road is expected to boost tourism as the new road will create better connecting routes from Bahir Dar to the Blue Nile falls, a prominent tourist destination. The road will also connect the area with Bahir Dar Industrial Park.
CCCC was awarded for the second project that involves the construction of a 380-metre-long bridge that connects Bahir Dar with Gonder at a cost of 1.4 billion Br. The bridge will be 43 metres in width and will have the capacity to accommodate a six-lane motorway, a bicycle path and a walkway.
CCCC, a company which has constructed Kombolcha Industrial Park, Addis-Adama Expressway, Africa Avenue (Bole Road), Measo-to-Djibouti railway and the expansion of the Addis Abeba Bole International Airport, secured the project after vying against three other Chinese firms.
The Chinese company has four other ongoing road projects with the Authority — Hawassa Airport-Bishan Guracha (Tikur Weha); Jijiga-Gelesh; Cherereti-Hagermekor; and Arsi Negele-Hawassa road projects.
Botek Bosporus Technical Consulting, a Turkish company, jointly with the local firm Stadia Engineering Works Consultant Plc, will supervise and consult on the construction of the bridge, which will replace the existing 60-year-old bridge.
“Due to long years of service,” said Habtamu Tegegn, director general of ERA, “the bridge has deteriorated.”
The existing bridge has been creating traffic congestion and fails to accommodate bicycles and pedestrians due to its 10-metre width, according to Habtamu.
In the same week the two projects were kicked off, the Authority inaugurated Bahir Dar-Zema Wonze-Feleg Birhan concrete asphalt road that was built at a cost of 2.5 billion Br. The road that decreases the traveling distance between Bahir Dar and Addis Abeba by 80Km is 175Km long and took five years for completion.
The construction of the road was undertaken in two phases. The first segment of the road, which is 92.5Km long, extends from Bahir Dar to Zema Wonze and was built by Sino Hydro Corporation, a Chinese company, while the local consulting firm Nate Consulting Energies supervised the project.
The second segment that connects Zema Wonze with Feleg Birhan covers 82.8Km. It was built at a cost of 1.2 billion Br. China Railway Construction Group (CRCG) built the road with the supervision of Icon Engineering Plc, a local consulting firm.
Being one of the nation’s largest capital expenditures, road maintenance and construction cost the country 33.1 billion Br in the last fiscal year. The spending has shown a 2.4pc decline from the preceding year, which stood at 33.9 billion Br.
In the last fiscal year, the total road network at the national level reached 126,773Km, a 5.5pc annual expansion. Road density per 1,000 square kilometres also increased to 115.2Km from 109.2Km a year ago, a 5.5pc improvement.
Experts in the area point to the significance of the road projects citing the low road density of the area.
“These road projects have been avoided for long due to the high cost they entail because of the topography of the areas,” said Melese Haile (PhD), a civil engineering lecturer at the Addis Abeba Institute of Technology’s School of Civil & Environmental Engineering.
The country so far had focused on building roads that have a relatively low price tag, such as roads across plains, according to Melese.
“Many of the new roads to be constructed in the future will have very high costs, as they will be in the most difficult areas,” he added.
Habesha Opens Exclusive Brand Shop
As a move to push its presence in the market, Habesha Breweries S.C. opened an exclusive brand shop that retails souvenirs with traditional Ethiopian touches.
Inaugurated on September 18, 2019, the brand shop is located at the head office building of the company at Bole Medhanialem off Cameroon Street. To run the shop, Habesha partnered with Ke-Ha-Iske-Pe Advertising by entering a five-year agreement.
The shop sells apparel, hand watches, leather bags, t-shirts, scarfs, wallets, glasses, make-up mirrors and coasters. The price of the items starts from a minimum of 200 Br and rises depending on the type of items. It is open from Monday through Saturday.
The shop is intended to reach consumers using branded merchandise to increase brand equity and awareness by creating connection and brand association, according to Door Plantenga, commercial director of Habesha.
“We’ve got a plan to open a network of brand shops across the country, after assessing the progress and need of items,” Plantenga said.
Ke-Ha-Iske-Pe Advertising, a local company that engages with printing, public relations, marketing campaigns and creative designs, will print the materials. The two companies will decide the types of items that will be sold in the brand shop.
The shop is not opened to make a profit. Instead, it aims to reach brand lovers, according to Zewdu Nigate, CEO of Habesha Breweries, a company that was founded in 2009 by 8,000 shareholders and started brewing in 2015. After three years of market experience, the company added Negus, a non-alcoholic beer.
“We’re promoting our brand in the international market through the items,” said Zewdu.
The new marketing strategy of Habesha came onto the scene a couple of months after the country entirely banned the advertisement of breweries in the broadcast media. Habesha was one of the major advertisers on television and radio shows.
Drafted jointly by the Federal Food & Drug Authority and the Ministry of Health, the proclamation took three years to take shape and puts various restrictions and limitations on the advertisement as well as the sale and use of alcoholic beverages. Brewery advertisement used to involve an average of half a billion Birr in transactions a year.
Beyond not advertising the products in the broadcast media, the brewers are required to feature warnings on their labels that declare consuming alcohol is hazardous to health. Advertisement of alcoholic products must contain a message that says it is illegal to sell it to a person under the age of 18.
Getie Andualem (PhD), a lecturer at Addis Abeba University’s College of Business & Economics, appreciates Habesha’s new brand advertising strategy.
“Promotion is one of the key pillars in marketing,” said Getie.
He also advises the company to be cautious about the content and structure of the message, demonstrating social responsibility when the company tries to promote its brand on easily accessible items.
“Some messages have ambiguous meanings, and they should consider this,” he said.
Loading your updates...