FORTUNE+ VIDEO SPONSORED CONTENTS ADVERTORIALS FORTUNE AUDIO Fortune Careers New TRADE AFRICA New

Fortune Logo

Month: March 2020

Heineken Commits 3m Br to Support COVID-19 Fight

Posted on by Web Master

Heineken Ethiopia donated three million Birr to the national resource mobilisation committee at a handover ceremony that took place at the Addis Abeba City Administration. External Communications & Sustainability Manager for Heineken, Fekadu Beshah, handed over the cheque to Deputy Mayor Takele Uma this afternoon.

See All Our Coronavirus Coverage in One Place

Heineken Ethiopia, which has three brewery plants in Ethiopia, located in Bedele, Harar and Qilinto, has allocated a total of over 4.5 million Br to efforts to contain the spread of the Novel Coronavirus (COVID-19) in the country. It spent 550,000 Br to set up handwashing stations around four high-traffic areas – Mercato, Asko, Akaki and Megenagna – which have been operational since March 24, 2020.

The company also distributed 50,000 packages of soap in the capital, Bedele and Harar, and gave a total of one million Birr to the Addis Abeba, Bedele and Harar feeding centres that will be used to feed 200 people a day.

Within a week, the Addis Abeba City Administration has mobilised 150 million Br.

 

Dashen Bank Chips in 10m Br for National Emergency Preparedness Fund

Posted on by Web Master

Dashen Bank is the latest in a long line of banks chipping in funds for the national mobilisation to ward off the potential spread of the Novel Coronavirus (COVID-19). Its board of directors donated 10 million Br this week, handing over the cheaque to Misganu Arega, state minister for Trade & Industry and the chairperson of the resource mobilising committee.

So far, Awash, Nib, Addis International and Enat banks, as well as the Ethiopian Insurance Company, have donated 30 million Br.

Dashen took the lead last week, waiving commission fees on ATM transactions to let its customers reduce physical visits to branches. It also removed commission fees customers pay to extend the validity of letters of credit (LC) and purchase orders aiming at easing the burden importers face due to the economic slowdown as a result of the fear of the spread of the virus.

See All Our Coronavirus Coverage in One Place

The Ethiopian Public Health Institute (EPHI) has conducted 1,013 laboratory tests on individuals, 25 of whom have tested positive. Two of them are in critical condition, while two others have been discharged after they fully recovered.

Two Japanese citizens have been transferred back to their country, and the remaining are undergoing medical treatment. A British diplomat who flew to Addis Abeba from Dubai has been treated inside the UK Embassy.

Abay Bank Joins Nation’s Effort to Avert Spread of COVID-19, Pitching in 3m Br

Posted on by Web Master

Abay Bank has joined the list of financial institutions that are giving financial assistance to the national committee that is mobilising resources to ward off the potential spread of the Novel Coronavirus (COVID-19).

Yehuala Gesesse, president of the Bank, handed over a cheque for three million Birr to Misganu Arega, state minister for Trade & Industry and the chairperson of the resource mobilising committee. The Committee was formed by Prime Minister Abiy Ahmed (PhD) and includes ministers and higher government officials as members.

See All Our Coronavirus Coverage in One Place

Earlier today, Dashen Bank donated 10 million Br, while six more financial institutions, namely, Awash, Nib, Addis International and Enat banks, as well as the Ethiopian Insurance Company and Nib Insurance, gave 30 million Br by the end of last week. As of yesterday, a total of 58,411 deaths were recorded out of the 639,224 people who have acquired the virus globally, according to WHO’s situation report. Ethiopia has reported 25 cases, of which over half of the cases are individuals with no recent history of overseas travel.

More Regional States Suspend Inland Road Transport Services

Posted on by Web Master

Three more regional states closed their doors for inland road transport services, joining the country’s effort in containing the spread of the Novel Coronavirus (COVID-19).

Oromia, Amhara and Southern regional states have suspended interregional and intraregional travel as of today, March 30, 2020. The authorities also ordered that no cross-country buses be dispatched from the regional states.

Buses that cross the Southern regional state are only allowed to drive through the state without dropping passengers off.

The Amhara Regional State has also stopped the movement of cross-country buses within its borders except for those that carry university students going back to their homes.

See All Our Coronavirus Coverage in One Place

The Oromia Regional State, in its latest announcement, banned movement from the rural to the urban parts of the state. Everyone entering the Regional State will be scanned at the gates, and the decree also prohibits any kind of public transportation services within towns or meetings by political parties and government officials.

In the Regional State, large marketplaces, religious institutions and bars will remain closed, according to Addisu Arega, head of social culture in the rank of deputy administrator.

The spread of the virus was initially limited to the capital city and the first cases were reported among those with a history of overseas travel. However, it spread to regional states and was reported among those with no travel history, beginning last week.

First reported on March 13, 2020, 23 people are so far confirmed to have acquired the virus. Five of the cases were reported in Oromia and Amhara regional states, showing that the spread of the virus has reached a turning point. To date, two people have fully recovered and have been discharged, two Japanese citizens have returned to their country and a British diplomat is recovering in a facility inside the British Embassy.

Tech Teams Join Hands to Fight COVID-19 Threat

Posted on by Web Master

Virtual meetings are taking place across the globe as well as in Ethiopia’s most decisive office – the Office of the Prime Minister.

Usually accompanied by ministers and high-level officials, on Thursday, March 27, 2020, Prime Minister Abiy Ahmed (PhD) sat by himself in his renovated office and held a virtual meeting with the COVID-19 Ministerial Committee on the necessary next steps.

One of the calls was for medical professionals to be on standby should the country demand their services. But volunteers inside and outside the country have started working on awareness-raising and fundraising campaigns some time ago.

Medical professionals, communication experts, tech whizzes and students alike are coming up with solutions to the problems the country expects to face soon. Where data is lacking, the country’s tech hubs are stepping in to fill in the gap.

Following the call-to-action by the Prime Minister’s office in early March, the Information & Communication Technology Association Ethiopia (ICT-ET) started mobilising and reaching out to companies and tech professionals. Within three days hundreds of volunteers and more than 100 companies were unified as the COVID-19 Response Team under coordinators Mike Endale from the United States and Yilkal Abate from Ethiopia.

The response team has many different divisions. Part of the team works on gathering information, ranging from where the country’s 3D printers are located to the latest guidelines by the government. A second team is working on a platform for tracking the number of people affected and under quarantine.

The team works remotely and also on the ground with the Ministry of Health, the Ministry of Innovation & Technology and the Prime Minister’s Office.

Another example is Ewenet Communications. Established five months ago by two engineering students and one marketing expert, this company is ready to roll out its newest trademark software named Corona. The new application was conceptualised long before the first confirmed case in Ethiopia and the layout is simple.

Filled with mostly static information about the Coronavirus, it gives the user information on symptoms, prevention and transmission methods and presents announcements obtained from the Ethiopian Public Health Institute (EPHI), the Ministry of Health, Centres for Disease Control (CDC) and the World Health Organization (WHO).

The application includes a Frequently Asked Questions section for information specific to Ethiopia’s context and proposes to be managed by Ewenet Communications and EPHI. The team works from their respective homes, only communicating by telephone.

Communication methods are no different at the 317Sqm compound that serves as Afritech Development’s office behind DH Geda Tower, which is mostly vacant these days. Communication takes place over Skype or by phone.

 

See All Our Coronavirus Coverage in One Place

 

Established with a capital of 30,000 Br over two years ago, the enterprise has built a website that provides information on the Coronavirus and boasts over 4,000 views so far.

A team of 20 has finalised the development of the portal that will be directly linking customers with small businesses and different farmers with customers in Addis Abeba without collecting a service charge or a delivery fee.

Samuel Mekonnen, founder and CEO of the company, says this is done to avoid price inflation, provide products at government-set prices and keep small businesses afloat should the country go into lockdown.

Currently, they are negotiating to engage businesses and sign them onto the application. The application is in Amharic and English, while Tigrigna and Afan Oromo are being added.

Delivery is free, and while partners are welcome to assist in the initiative, Afritech is determined to cover all the costs if need be.

Not far away from Afritech on Namibia Street, Samuel Fekade, project lead at BlueMoon gets a team of 50 innovators together to make face masks. The goal, he says, is to produce 1,000 face masks every day. The tech hub works on 3D printing, website design and mobilising volunteers. Still, the shortage of masks in the country has demanded their full attention momentarily.

The innovators plan to make a total of 500,000 face masks. Spending close to 8,000 Br from their own pockets for every 1,000 masks, the team is looking for support to reach this goal. The masks are produced by the local garment manufacturers and are sanitized before distribution.

Initially targeting clinics and hospitals with shortages, the team will move to busy streets like Mercato where individuals exhibiting flu-like symptoms are likely to travel through. They gave out a total of 1,000 masks to Yekatit and Menelik hospitals on March 25, 2020.

Wubrest Tesfaye (MD), junior programme staff member at the Center for Reproductive Health & Training Center, says that there are benefits to wearing the masks.

Though the N95 respirators and surgical masks are the ones recommended explicitly for health professionals as they’re primarily designed to protect the wearer from airborne particles, other types of masks can protect the wearer as well, especially in a country where social distancing is hard to implement.

It is important to know that using masks and gloves comes with its own standards and discipline. If touched by hands and put back on they may cause more damage than help, according to her.

“However, unless the Ethiopian Food & Drug Authority approves the masks,” said Wubrest, “health professionals in close contact with patients shouldn’t be using them.”

Some tech movements do not have a physical presence, but their impact is just as substantial. When the Hakim Facebook page was started two years ago by Abraham Araya (MD), it was to create a platform where health professionals could share their day-to-day experiences. The page is used to gather opinions and questions from different professionals and non-professionals in the health sector and is guided by an editorial standard.

Now, this online platform has more than 130,000 followers and shares verified information about the Coronavirus, as well as opinions from people in the healthcare sector. Administered by medical doctors, the information on the page is verified and sometimes translated from different languages when it is necessary.

It does not end there. WhatsApp groups, Facebook live sessions and Twitter accounts are also chipping in. Selam Mussie, a media and communications professional, is in one such group.

Composed of professionals from the health to the education sectors, the group is primarily helping in verifying information, changing it into a more palatable form for the general public and translating it into different languages.

Their work includes monitoring call centres and making sure that they are functional and updated according to guidelines. Their Telegram page, Covid-19 Ethiopia, is the platform they use to share different informational posts related to the virus in different languages. The group is made up of 18 people, each using their different contacts to create a comprehensive source of information and support in disseminating information coming directly from the Ministry of Health.

YetenaWeg, a twitter page run by two Ethiopians, Ermias Kacha (MD) and Fitsum Tilahun (MD), talks about different issues related to the virus. Alongside a bi-monthly podcast, the medical doctors also run a website where they translate academic writings into Amharic.

Your Ethiopian Professionals Network (YEP), a group based in the United States that features inspirational speakers, hosts educational sessions and provides networking opportunities for Ethiopian professionals, has also shifted its platform to creating different digital events on the subject of the Coronavirus by working with health professionals in the Ethiopian community.

Even social media influencers in the city, like Abyssinia Vines, the famous trio behind the music “Dehna Nesh, Endet Nesh,” a Youtube video with nearly three million views, have jumped in. They have created short videos busting Coronavirus myths and other similar topics.

The internet and globalisation have been both a blessing and a curse says Marqos Lemma, founder of one of the first innovation and tech hubs in Ethiopia, Iceaddis.

“The virus spread so rapidly, because we’re very interconnected,” he said. “But it’ll also be the reason why we have a better chance to beat it than ever.”

If there is new information, everyone can access it within seconds. People can still work from home at a time like this, and society does not have to stop.

Azeb Asaminew (MD), psychiatrist and editor on the Hakim page, advises that people keep their sources of information limited to a few trustworthy outlets and limit their physical interactions even more.

It is not just the tech sector that is banding together at this time of crisis. Groups and individuals are popping up all over social media with call-to-action campaigns.

Hadra Ahmed and her friend started to put handwashing stations across the city, especially around taxi stops where a lot of people gather. Nubia Communications and Setaweet Ethiopia, a feminist research and training company in Ethiopia, is giving them institutional support, and the volunteers are placing handwashing stations along with banners and stickers around taxi stations.

They have started talking to different hotels to get sponsors for the handwashing stations and also plan to approach gulit owners, streetside vegetable vendors, to deliver their produce to the condominiums near where they work while making sure that the vendors have sanitizer, gloves and masks to protect themselves.

A simple Facebook post by Fikir Getachew attracted a group of 65 composed of university students, health officers and teachers to encourage people to stay home by running errands for them free of charge. They pay electric and water bills, buy groceries and drop them off.

In his latest piece for The Financial Times, Prime Minister Abiy Ahmed has asked the global community to band together and help Africa in this time of need for a lasting solution to eradicate the Coronavirus. While that is yet to be seen, Ethiopians are stepping up in the meantime.

Ethiopia Reports First Coronavirus Case 

Posted on by Web Master

Ethiopia discovered its first Novel Coronavirus (COVID-19) case in a 48-year-old Japanese citizen, Minister of Health Lia Tadesse (MD) announced today at a press conference.

The individual arrived in Ethiopia on March 4, 2020, from Burkina Faso. On March 9, he developed a fever.

He was quarantined on March 11 and remains in quarantine following medical treatment, according to Lia.

INSA Launches COVID-19 Monitoring Platform

Posted on by Web Master

The Information Network Security Agency (INSA) has launched an integrated Novel Coronavirus (COVID-19) monitoring platform. The estimated commercial value of the platform would have been as high as 1.5 million Br if not developed in house.

Launched on March 23, 2020, the web-based platform provides information such as directions to the nearest pharmacies, hospitals, and police stations in the country. Individuals who develop symptoms or were in contact with people with confirmed cases can also give information to the Ministry of Health via the platform.

The system also enables users to report illegal or unauthorized activities, such as large public gatherings. People who are confirmed to be sick with the virus can also follow up on their cases and status through the platform.

The Agency developed the platform to contribute to the fight against the Coronavirus, according to Shumete Gizaw (PhD), director-general at INSA, who dedicated six staff members to developing the platform.

See All Our Coronavirus Coverage in One Place

As a start, the website, which is accessed through the internet and uses GPS, has been launched in Amharic and English.

“We’re going to add more languages in the coming days,” said Shumete.

The platform was also made to be used for epidemics that might erupt in the future, according to Biniyam Abebaw, software developer at INSA, which started the process of designing the platform after the first Coronavirus case was reported in Ethiopia on March 13, 2020. As of Friday, March 27, 2020, Ethiopia has 16 confirmed Coronavirus cases.

“During the process of web development, we faced several challenges including getting accurate information from different offices,” Biniyam said.

Thirteen individuals, six from INSA and seven from the Ministry of Health, were deployed to maintain the platform and take the necessary actions once reports are received in addition to their current responsibilities.

The platform can help the effort to contain the virus by providing information on the health status of the country, according to Lia Tadesse (MD), minister of Health.

“Technology can play a key role in controlling such epidemics and improving other healthcare activities,” she said.

In the event of a rapid outbreak of the virus, the country has prepared two hospitals in the capital to isolate and treat people with confirmed cases. Bole Chefe is being used as a treatment centre for suspected individuals, and Yeka Kotebe is reserved for severe and critical cases.

Ethiopian Sky Light and Ghion hotels are also designated to serve as a quarantine location for travelers arriving in the country. All travelers who enter the country are required to stay in quarantine for 14 days at their own expense.

Yenebeb Abebe, general manager of Info World Link, says the system will play a significant role in the nation’s fight against the Coronavirus and also for other healthcare services.

“But I have seen some gaps in the system,” he said. “It primarily focuses on gathering data, and it needs to take the next step and make virtual treatment possible for those who isolate themselves.”

The platform also has some limitations. For example, it cannot be reached by individuals with phones that do not access the internet, so it would be better to prepare a messaging system for those users, according to Yenebeb.

 

UPDATE: This story is edited to clarify that the platform was developed by volunteer employees of the Information Network Security Agency (INSA).

 

 

 

NIPPED IN THE BUD

Posted on by Web Master

For the past five years, Adanech Kumela (left) and Werqe Girma have cut roses at the Yassin Legesse Johnson Flower Farm for export to mainly European and North American markets. The roses not only fetch revenue for the company but much-needed foreign currency for the country.

This has not been the case lately. They have continued to cut the flowers but only to dispose of them as demand has frozen in prime export destinations when they went into lockdown following the Novel Coronavirus (COVID-19) pandemic. The company has been hemorrhaging money as a result, and one of the major sources of foreign currency for the country has been disrupted.

An industry employing over 150,000 and generating hundreds of millions of dollars every year, it has been one of the first to feel the economic consequences of the pandemic. Unsettled by the sudden loss of income, the Ethiopian Horticulture Producers & Exporters Association has appealed to the Prime Minister’s Office.

Requesting a capital injection, loan rescheduling and reclaiming of VAT paid in advance, the flower exporters have reached a deal with the government. The minimum selling prices in international markets have been removed, and they will have access to chemicals and fertilisers at reduced prices from the government. The National Bank of Ethiopia (NBE) is also availing 15 billion Br to private banks for use in debt retrench and additional loans to businesses feeling the pinch across the country.

For the time being, employees of the flower farms are secure after discussions with the Ministry of Agriculture led to the conclusion that the alternative is too dire to consider. Growing the flowers will continue, even if it means that they would have to be dumped after harvest.

Horticulture is estimated to be only one of the first industries to be hit by the Coronavirus pandemic. If the current lockdowns across the world continue, workers like Adanech, Werqe and 30 million other Africans working in the private sector stand to lose their livelihoods, according to Vera Songwe, executive secretary of the Economic Commission for Africa (ECA).

Ethiopian Airlines Reroutes to Cargo Flights

Posted on by Web Master

Ethiopian Airlines, which grounded 60pc of its international passenger fleet, is set to use all of its passenger planes for cargo shipments.

The airline came up with the new strategy as a coping mechanism in response to the latest business slowdown following the outbreak of Novel Coronavirus (COVID-19). The company decided to use all of its passenger fleets either with their seats using the traditional cabin loading or by taking out all the seats and loading cargo in the main cabin floor of the aircraft on top of the belly-hold capacity.

Despite the disruption of the passenger business, COVID-19 has caused a sudden and significant demand in global air cargo transport, according to Tewolde GebreMariam, Chief Executive Officer of the Ethiopian Airlines Group. The Airline lost 190 million dollars in revenues in February and March due to the flight disruptions after the outbreak of COVID-19 throughout the world.

“Hence, the air cargo business is booming, and it’s operating at its peak capacity,” he wrote in an email to all of the area managers, urging them to market the cargo business. “This gives us a new and unexpected business opportunity to expand our cargo business beyond the dedicated cargo airplanes.”

Currently, the airline operates a fleet of 126 and is waiting for the delivery of 57 more aircraft. Out of the operating fleets, 12 of them are dedicated for cargo, according to its official website.

The management of the company came into the decision of diverting to the cargo business in full force after the outbreak of the virus struck the aviation industry. International Air Transport Association (IATA), a trade association for the world’s airlines, estimates that industry passenger revenues could plummet 252 billion dollars or 44pc below 2019’s figure.

The combination of trip cancellations and country-specific restrictions on international flights cost the industry 880 billion dollars, according to the report from the World Economic Forum. Also, the countries’ sharpest year-over-year drop was recorded on February 17, 2020, with a 71pc fall in flights compared to the same date in 2019, according to the report.

Most of the countries are in lockdown and closed their passageways and airspace. Passengers are not also travelling due to fear of the pandemic; while companies have closed factories, and most businesses have paused. Most of the international airlines companies have also suspended flights. American Airline, Delta, Turkish Airlines, Lufthansa and Emirates are among the airlines that have parked a significant number of their fleets.

Up to 113 billion dollars in revenue was lost by March 5, 2020, before the countries around the world introduced sweeping travel restrictions that largely eliminated the international air travel market, according to IATA.

Due to this downtime, many of the airlines are grounding their fleets and are seeking cash injections from their respective governments to overcome the crisis.

Airlines need 200 billion dollars in liquidity support simply to make it through, according to Alexandre de Juniac, the director-general and CEO of IATA.

“Without immediate government relief measures, there will not be an industry left standing,” said Juniac. “Some governments have already stepped forward, but many more need to follow suit.”

Ethiopian Airlines is the most affected, since it does not expect any government cash injection to survive, unlike all its competitors which expect massive cash bailouts and sovereign credit guarantees, according to Tewolde’s note in the email.

Since the first cargo charter operation launched to Nairobi in 1946, Ethiopian Cargo & Logistics Services flies to 54 destinations in Africa, Europe, Asia and the Middle East with its freighter network. It has annual freight revenue of two billion dollars, with annual total tonnage of 820,000tn. The company earns a yearly profit of 200 million dollars.

As of the end of last week, Ethiopian Airlines, which earned an operating profit of 260 million dollars in 2019, suspended flights to 75 destinations. The number of closed routes have doubled within a week. All of its destinations in the Middle East are closed, while most of the destinations in the remaining continents are closed as least until April 15, 2020.

The airline, which expects 80pc of international passenger fleets to be grounded in the coming weeks, is currently flying to 35 destinations, which is only one-third of its usual number of destinations.

First reported on December 31, 2019, in China, the virus has since spread to over 192 countries and infected a little over 600,000 people. It has killed close to 28,000 people with a recovery rate of 23pc. So far, Ethiopia reported 16 confirmed COVID-19 cases, of which nine of them are Ethiopians, while the remaining are Japanese, Australian, Mauritanian and British.

Out of the total cases, 10 of them were confirmed in people who returned from overseas travel. In contrast, the remaining cases were reported from people who have acquired the virus locally after having contact with others who tested positive. So far Ethiopia has reported no deaths, but only one of the 16 people who acquired the virus has fully recovered.

Touted by the Americans, Prime Minister Abiy Ahmed has been…

Posted on by Web Master

Touted by the Americans, Prime Minister Abiy Ahmed has been the darling of the West. Never mind that the Middle Eastern emirs are behind his off the budget indulgence in paying for the passionate projects of his immediate surroundings.

It is very hard to say as much about the attitude toward him by many of the leaders in Africa, claims gossip. Some like Yoweri Museveni of Uganda may see him as a young man popping up in the scene but hyperactive above his pay grade, gossip says. Paul Kagame of Rwanda could have a bias against Abiy due to the development model he might have emulated from the late Meles Zenawi, to whom he had the greatest admiration, says gossip.

Abiy’s bizarre design in Somalia, in complete contrast to the long-held foreign policy stances of successive leaders in Ethiopia, has obviously pitted him head-on with Uhuru Kenyatta of Kenya, says gossip. Abiy`s relationship with Somalia`s Mohamed A. Mohamed, aka Farmaajo, is mainly shaped by the latter’s affinity with Eritrea’s Issayas Afeworqi, according to gossip. It is interesting to note that among all the leaders Prime Minister Abiy had called last week to coordinate a regional response in the Horn of Africa, President Issayas was a notable absence, gossip disclosed.

While Muse Bihi Abdi of Somaliland is known to have anxiety over Abiy’s policy toward Somalia in general, Djibouti`s Ismael O. Guelleh remains unforgiving to Ethiopia`s foreign policy infidelity with Eritrea behind his back, claims gossip. Abiy and his close aides in foreign policy circles are trying to court Sudan’s rather unconsolidated leaders, including its interim Prime Minister, Abdalla Hamdok, says gossip. Farther north, his effort in cajoling Egypt`s President, Abdel Fattah el-Sisi, appears to have backfired over sharp disagreements on the GERD, at a curious time when Egypt is entrenching its hold on the leaders of South Sudan, including its President, Salva Kiir, says gossip.

Despite his delicate relationships with these leaders, Ethiopia’s Prime Minister is keen in pushing for a kind of regional togetherness that is closer than what the horde of leaders in the region is prepared for, according to gossip. Many of them seem to get along more out of diplomatic courtesy, unable to determine what to make of an idealist on hyper energy but driving solo, claims gossip.

Some of these initiatives, taken unilaterally, do not go down well among the circle of African leaders and their senior diplomats based in Addis Abeba, claims gossip. Abiy`s decision to insert the mantra of “Me`demer” in the banners put across the city during the AU Summit by heads of state – alongside or competing with AU`s core message of silencing guns – was a subject of ire but contained within the corridors of African diplomats, gossip recalled.

To the indignation of this circle, Ethiopia`s Prime Minister has taken upon himself the role of a spokesperson and a point man for the African continent, even though the AU has an elected chairman in the person of South Africa’s Cyril Ramaphosa, gossip claims. His success in persuading China’s billionaire, Jack Ma of Alibaba Group, to send desperately needed medical supplies to protect lives from the Coronavirus could have been appreciated across the continent, says gossip.

However, his decision to write an official letter to the G20 leaders on the continent`s behalf without first delegated by the AU summit was considered nothing but an act of gall, claims gossip. He asked for the generous support of 150 billion dollars to ward off the virus in the continent, an amount 50 billion dollars more than what Vera Songwe of UNECA suggested earlier, gossip disclosed. The world is certainly moving to a recession not seen since the Second World War; the global economy is to lose 2.7 trillion dollars. No less than 80 countries have their leaders made the same plea to the IMF for fiscal support. Abiy`s lone voice urging the world to not forget Africa at its own peril appears to remain a distant and faint cry, claims gossip.

Ministry Drafts Price Guidelines for Tourist Destinations

Posted on by Web Master

A new guideline that will establish official rates to visit tourist destinations across the country and centralise the pricing system is in the making.

The guideline will centralise the payment system for tourist destinations involving different stakeholders from across the board. The guideline was drafted by different institutions at the federal level that are engaged in the administration of heritage, culture and natural resources.

The draft has been up for consultation twice, first among institutions at the federal level and then with other relevant stakeholders including Tourism Ethiopia, Ethiopian Airlines, the Ethiopian Tour Operators Association and Dalberg – Master Card Foundation. The latest consultation form was held on March 14, 2020, at an event held at Capital Hotel.

Currently, regional governments come up with their own rates that are unstudied and mismanaged, which causes problems, according to Hunde Kebede, director of tourist destination development under the Ministry.

“The country hasn’t been fully utilising its natural resources because of problems arising from informal pricing,” said Hunde, “Aside from being set too low, the rates of some tourist destinations change multiple times a year, while the prices at other attractions remained the same for more than 10 years.”

Ethiopia generated a total of 3.2 million dollars from over 800,000 international and three million local tourists in the past fiscal year.

Under the new guideline, there will be a regulatory body made up of different stakeholders to make sure the rates are fair and balanced. The regulatory body will also oversee the implementation of the rates through the regional governments.

The draft aims to provide stable prices by fixing rates that will be in place for two to three years before they are reviewed. Under exceptional circumstances, the rate could be subject to change within a lesser period of time. The guideline also sets principles for rating the tourist destinations. Looking at rates of international tourist destinations to have additional context is among the tasks that will be conducted before setting up the prices.

Prices can fluctuate multiple times within a year and this has posed a serious problem to the industry. Danakil Depression in Afar is an example, since the entrance fee of this popular tourist destination has tripled from 200 Br to the current 805 Br within a year.

“This was difficult for tourists and tour operators alike,” said Hunde.

The price fluctuation has disrupted package deals offered by tour operators, and tourists were displeased with last minute prices changes as well, according to him.

“This left the tour operators at a financial loss and negatively affected their credibility,” he said.

If duly implemented, this guideline will solve the current issues of pricing, according to Yaqob Mekonnen, president of the Ethiopian Tour Operators Association.

“The most important factor in this is that all the relevant stakeholders are consulted before setting the rates,” Yaqob said.

The federal government, the regional governments, religious institutions and individuals are the four main bodies that administer tourist destinations. Under the guideline, 12 different institutions from these four sections are selected for the regulatory body.

The draft gives the mandate to this body for overseeing the rating process and implementation. The regional governments will be responsible for coming up with the list of prices under their jurisdiction in accordance with the guidelines approved by the regulatory body.

The guideline will ensure that it incorporates the views of tour guides, destination managers and hotels that are brought in for discussion, according to Sileshi Girma, CEO of Tourism Ethiopia.

“Based on consultations, prices will be increased or decreased depending on the reasons that are tabled at the meetings,” said Sileshi.

The draft guideline states that parties not complying with the guideline will be held accountable according to law. However, there are no repercussions at this time.

The guideline is set to serve as a temporary relief to the pricing problem, while a new governing proclamation is underway, according to Hunde.

“It is more of a managing document than a punitive source,” said Hunde.

Tour operators welcome the guideline.

Operators sell packages to tourists as much as a year in advance and find out a few months later that prices have been hiked both for the destinations and for the tour guides along with it, according to Alexander Kemal, tour operation manager at Simien Image Tour.

“It’ll be great to see this guideline in action,” said Alexander.

Economic Disaster Looms Large, Fiscal Response Plan Can’t Come Earlier

Posted on by Web Master

In September 2005, the World Bank commissioned a futuristic study to see the loss in human life and cost to the global economy should there be a global outbreak of a virus. The finding was too terrifying to contemplate. Tens of millions could die across the world, and a loss of up to 800 billion dollars could occur in the global economy.

Whether or not the current global pandemic from a virus was what the researchers had in mind when foreseeing the future is yet to be seen. Nonetheless, few could have predicted how the saying, “When China sneezes, the whole world catches a cold,” would take on a literal meaning.

An outbreak of respiratory illness first reported in a Chinese province barely known to the rest of the world went on to not only be contracted by hundreds of thousands across the globe but bring to a standstill the world’s economy. It is a testament to the profoundly globalised state of the world.

The Novel Coronavirus Disease 2019 (CoViD-19) pandemic has impacted the social and personal lives of billions of people around the world. All but four of the 195 countries have reported the presence of individuals with the virus. It has effectively led to three billion people around the world being told to stay home. Many countries are under lockdown, having closed their borders and instituted travel restrictions. Ironically, China, where the virus initially originated, closed its borders for fear of imported cases, while the United States has taken the lead last week with the highest number of people with a confirmed case of the virus. The numbers are running high in most terrifying speed.

A projection made in 1999 by the Centers for Disease Control & Prevention had warned such a pandemic could lead to loss in human life reaching over 200,000 people. It would also cost the US economy close to 200 billion dollars, representing 1.5pc of its GDP at the time.

It comes from factories, shops and offices – any business institution deemed unessential to the provision of essential goods and services – being shut down en masse, not only in the US but everywhere. A world economic order founded upon cross-border production, distribution and consumption of goods and services suddenly finds itself confronted with its greatest challenges. No economic stimulus plan, country-specific or international, would be entirely capable of accounting for the significant gap that will be created as a result of the fall in productivity.

It is an obstacle likely to bruise the economies of even the wealthiest nations in the world.

Global growth could plummet by half to 1.5pc, the Organisation for Economic Cooperation & Development (OECD) warned. Japan, Europe and the United States have all been predicted to fall into recession if the current economic lockdown persists for months.

For countries such as Ethiopia, lacking the fiscal space, experience or even economic structure to deal with a global recession systematically, the consequence will be unprecedented. Thirty million jobs in the private sector stand to be lost as a result of the economic consequences of the spread of the virus in Africa, according to Vera Songwe, executive director of the Economic Commission for Africa (ECA).

The effect due to countries around the world trying to contain the spread of the virus, including Ethiopia, are evident already.

Products such as preventive medical equipment have sky-rocketed beginning on the first day the presence of a person confirmed with the virus was reported in the country. The widespread belief that food items such as garlic, lemon, honey and ginger are effective in fighting the infection has also led to a severe escalation of retail prices. It is only a matter of time before consumers feel the inflationary pressure in the economy.

Much more worrying has been the impact on industries and sectors that depend on cross-border trade. Over the past months, before a single case was reported in Ethiopia, there had already been disruptions to the activities of local businesses. These were mainly manufacturers and importers that relied on goods and skills brought in from Asian and European markets.

This was when Corornavirus cases around the world were at one-fifth of the reported cases late last week and China was still the epicentre of the infection. Panic and speculation had created disruptions in the global supply chain. Restrictions and delays on the shipping of goods and travel of people severely impacted it, leading to local businesses relying on imports being unable to meet demand.

Even before reaching Ethiopia, the virus had become a burden on the economy at least in the form of speculative prices.

If it was import-dependent businesses that primarily felt the economic whirlwind that was to come, it is small businesses that are sacrificed in the effort to contain the spread. Almost a week after the first case was confirmed, bars and nightclubs were shut down, threatening the livelihoods of people employed in such establishments. Ethiopia remains in partial quarantine, allowing people to move around with open public transport and markets. Certainly, this will do little to contain the virus completely, as history demonstrates.

This is not to mention the severe consequences to the already teetering brewery industry. Battered by a ban on commercial ads in the broadcasting media, a new punitive excise tax, and now the closure of bars and restaurants, the livelihoods of 88,000 people – malt farmers and employees of beer companies – have been put on the line.

The impact on the external sector will be worse still. It is already threatening to wipe out the nation’s meagre foreign currency reserves. One of the earliest victims has been the horticultural industry, incurring 11 million dollars in losses in just two weeks. Due to an almost complete drop in demand in European and Middle Eastern markets, it finds itself on the edge of an abyss. It is an industry that generated 300 million dollars in the last fiscal year, making up for over a tenth of the entire export receipts, and employs 150,000 people.

These are problems that have already become evident. As economic lockdown across the world continues, an unanticipated drastic fall in private transfers (remittance) and the export of services and goods will become more apparent. Revenues from tourism will almost certainly decrease, eliminating a chunk out of the hundreds of millions of dollars it contributes to the nation’s foreign currency reserves. The fall in commodity market prices, which fare terribly during global economic slowdowns, will eat into the already stagnant export revenues of the country.

Ethiopia is set for dark times ahead.

The only good news on the horizon is the fractional respite a falling global price of crude oil will provide.

There is some assurance to be found in the recognition given to the economic consequences of the spread of the virus by Prime Minister Abiy Ahmed’s (PhD) administration. Most of the action has until this point been on asking developed countries and multilateral institutions for economic assistance, including bailouts for private players suffering from value chain disruptions, as well as debt cancellation or at least restructuring. The latter, if the administration succeeds in its lobbying, can mean the lessening of a burden for a country with over a billion dollars to service in principal and interest payments, annually.

Beyond making a concerted effort to articulate the need for developed nations to assist developing ones economically, there are interventions his administration can undertake to stimulate the economy and safeguard the vulnerable members of the population. Society will certainly overcome this challenge; it is individuals whose lives will remain shattered – forever.

One remedy may be to loosen regulations around terms of establishment. This way, businesses can adapt to transforming market demands. Protective medical gear, systems for non-cash transfer of money, home delivery of goods and digital communications have all gained importance that is barely being met by those currently providing them. Allowing flexibility for businesses, individuals and manufacturers by loosening regulations to participate in the supply side of this will not only help meet demand. It will absorb those who will soon lose their jobs.

However, the essential element here is to understand the pandemic is short-term, thus formulate fiscal measures in the administration’s response. This should be the appropriate time for the Prime Minister to take his case to parliament and win their concession to get a piece of legislation that empowers him with broader manoeuvring ability on the fiscal front. It should be alright at this time to run sizable fiscal deficits than the norm, either through the loss of domestic revenues in taxes or paying for comprehensive social protection programmes.

Indeed, the likelihood of an economic slowdown looms very large for Ethiopia. But it is possible still to cushion the impact. Help may come from developed countries and multilateral institutions later, but the administration will need to be imaginative in its handling of what is perhaps the most significant challenge since 1918.