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Month: April 2020

Odd-Even Vehicular Decree Triggers Outrage

Posted on by Web Master

On the sunny morning of Thursday, April 23, 2020, an array of people gathered to inquire about the new directive issued by the Ministry of Transport that has limited the use of private cars. They’ve assembled around the iron-rod gate of the Federal Transport Authority near National Stadium on Equatorial Guinea Street.

They heard there are exceptions to the conditions that have been set by the government on using private vehicles in rotation, and they were wondering if they too might fit the bill.

The security guard standing at the gate interrupts their questions and points his finger up to the right of the wall even before they have finished speaking. He points to two small printed notices that have been plastered to the wall overlapping one another.

The first notice announces that only personnel directly involved in activities linked to the Novel Coronavirus (COVID-19) pandemic can be given a special permit to use their private cars on all days throughout the week and that this will only include health professionals at the moment.

The more detailed of the two notices goes on to list three requirements for any health professional expecting to get this permit: a support letter from the office where they work, proof of ownership of the car, and the person’s employment identification.

Solomon Abegaz does not fall under these exceptions. The 39 year old bank manager will no longer be able to use his car to go from where he lives in Megenagna to his work past Torhailoch three times a week.

He is taking shifts now with his deputy as either one of them has to be there to authorize documents. Whenever either of them is present, they work round the clock and can not go anywhere or take any breaks.

“We have employees coming from far places as well, as far as Burayu, and it is costing them a lot as they’re reluctant to use public transport for fear of the virus,” he said.

Those that are opting to take public transportation are finding it difficult because there’s a big shortage nowadays, according to Solomon.

This directive, which became effective as of April 18 and perhaps the most controversial yet, permits private vehicles to be used only every other day. Cars with an even digit at the end of their license plate may drive on one day and those with an odd digit at the end of their license plate may drive the next.

“We’re quite lucky actually,” said Solomon. “My plate number ends in an even number and my deputy’s ends with an odd one but not everyone’s situation works as well.”

Out of the total 613,638 vehicles in the capital, a third of them or 218,028 have a code-02 or private license plate. But not all code-02 cars will be affected.

Depending on the nature of their job, any professional directly involved in matters relating to the state of emergency can move around on all days using a special pass issued by the Federal Transport Authority.

“The Authority is responsible for providing these special passes,” confirms Abdulber Shemsu, deputy director of the transport sector at the Authority.

Based on the list of institutions that the Ministry of Health deems to be directly involved in COVID-19 activities, the Authority will provide special permits, according to the given criteria.

“We need the Ministry to verify the validity of the institutional claim first,” he said. “Though the Authority is only giving permits to health professionals, the exception might expand to include more.”

Solomon hopes that banks too might shortly be included.

“We’re serving basic needs for the society by making banking accessible to them without travelling far,” he said.

Additionally, the Bank has a lot of clients in the pharmaceutical industry that work in supplying sanitisers and health products.

“We’re communicating with relevant government bodies to be included,” Solomon said.

The Authority has already issued 1,800 special permits to the Ministry of Health. These permits have been issued temporarily, and the Authority has completed testing of a secure system and will replace the permits on Monday with newly printed ones that will last for the duration of the state of emergency.

“The directive aims to achieve two things,” said Abdulber, “One is to protect citizens from the virus by limiting mobility. We believe it’s reasonable to allow movement four times a week for an individual with their own private car.” The second purpose is to facilitate public transport by minimising the traffic in the city.

The directive has also reduced the number of passengers on all of the city’s public buses and taxis to 50pc and the light rail to 25pc capacity. This was done in order to lessen contact between passengers.

Limiting the code-02 cars to driving on certain days is expected to further enhance this effort, according to Abdulber.

With the number of people on public transport halved, the directive aims to facilitate the use of already existing public vehicles in the system.

Less cars circulating in the city means a better flow for public transport and more people can be accommodated within the same time frame. The Authority is also reassigning cross-country buses to be used in the city and procuring new ones to meet the demands of public transport.

The directive states that cross country buses are allowed to travel only from 6:00am until 9:00pm. In addition to this, different shifts have also been set for the bus arrival times so as to minimise crowds at stations.

The rotation is only for privately-owned cars and does not apply to rentals, company cars or government-owned cars. The Authority, given that public and private employees are expected to have transport covered by their institutions, does not expect this scheme to create a major problem.

“In times like these, we must be willing to bear some of the burden,” says Abdulber. “We’re aware it will affect some individuals, and there will be a few complaints.”

True to the predictions of the Authority, there are a lot of displeased citizens that have been inconvenienced by the new changes.

Birhan Hassen, a 28-year-old co-founder and chief marketing officer of a local import-export company is one such citizen. The business, which exports pulses, oilseeds and spices and imports plastic raw materials and steel car tyres, is in its nascent years and requires him to not only be present at the office but also to make rounds throughout the city almost on a daily basis.

“There’s a lot of indispensable work that I have to physically be present to do,” he said. “I have to go meet clients and sample items. My line of business requires a lot of paperwork with government bodies, and I rely on my car to get me to places.”

His white 1989 Toyota Hilux serves as his transportation and also allows him to haul samples and locally made materials from a location in Ayertena to different parts of the city. Now he has resorted to taking private cabs when he is not allowed to drive.

“The amount I’m spending on two days for a taxi can easily see me through a week with my car,” he said. “It’s very inefficient and taking public transportation is unthinkable because of the queues.”

Private car owners also feel that the new arrangement will expose them to public places while taking public transportation. They argue that it could expose them to the virus.

However, Endalkachew Tsegaye, communication affairs director at the Ministry of Transport, argues that the public transport sector is functioning in line with the health guidelines.

Operators use masks and sanitiser, and public buses are cleaned with chemical spray after every round-trip. This is all done in an effort to make public transport safe.

So far, there have not been any punitive measures taken against private cars within the first week since the rotation scheme became operational.

The Addis Abeba Traffic Commission, with over 1,000 traffic police officers, has yet to receive any specific instructions on the procedural and punitive measures to be taken on trespassers.

“It was the first week, and there’re still some issues to sort out, but we’re leaning toward educating and giving warnings for now,” said Commander Shewayirga Gizaw, director of traffic control at the Addis Abeba Police Commission. “We’re, however, strictly overseeing that public transportation guidelines are being followed.”

The Commission has so far penalized 268 drivers for not adhering to public transportation laws decreed under the state of emergency, particularly on seating over capacity and overcharging passengers. Out of that group, 195 of the offenders had passengers over the allowed capacity, a breach punishable by up to 5,000 Br and license revocation.

Failure to comply with the laws during the state of emergency will result in imprisonment and fines ranging between 1,000 Br and 200,000 Br. The specific details for non-observance of the car rotation scheme is being worked out by the Transport Authority.

“Upon the request of regional governments and the City Administration,” said Abdulber, “we’re working on a procedure, and we’ll have a response by the end of this week.”

This will hardly reach the intended goal as it will create more burden on public transportation, according to an expert in traffic flow and management who commented on the condition of anonymity.

“There’re still heavy trucks driving at all hours of the city currently. Arranging specific times for that could have been the first step,” he said. “There’re no tourists, and most hotels aren’t functioning so the traffic flow has already greatly decreased.”

The ban is there to discourage movement, but it must be remembered that lives still need to be led, according to the expert.

For people like Birhan, the law itself seems very unnecessary.

In the past month the streets have been open, unlike any other time. People are staying home, and there is also no school, so traffic has already decreased immensely, according to him.

“It takes a few minutes to get to places that would normally take much longer,” he said. “I don’t see why it was necessary to add this.”

ODD POLICY

Posted on by Web Master

With schools closed, most public service employees asked to stay home, and many businesses having closed their doors, the streets of Addis Abeba have emptied significantly over the past weeks. But the Ministry of Transport has thought it prudent to go one step further and issue a directive to reduce mobility. This has been done by allowing privately-owned vehicles, which have a Code-02 license plate, to be driven only every other day.

Vehicles with license plates ending on an even digit are permitted to use the road on three alternating days throughout the work week, those with plates ending on an odd digit may use the road on the other days. The enforcement of this measure began last week, though traffic police officers have not received instructions on what steps must be taken against offenders. To date, only health professionals have been spared the restriction and given special passes.

For the over 200,000 owners of these vehicles, the directive has evidently been inconvenient, especially if their line of work requires that they travel throughout the city. Those who have complained about the measure stress that it could, in fact, compound the problem since it forces people to take public transportation, counteracting the government’s physical distancing measures.

Officials at the Federal Transport Authority do not see it this way. They believe the measure is critical to reducing overall mobility while also allowing life and work to continue to some extent.

While experts in traffic flow and management agree that the government should indeed be doing what is in its power to ensure that physical distancing measures are heeded, they find this directive to be overkill. Traffic flow had already substantially decreased, they believe, and the new directive will likely only inconvenience users of these vehicles.

State of Emergency Should Not Inspire Worst Instincts of Gov’t

Posted on by Web Master

There is a sense of irony to how the decision by the administration of Prime Minister Abiy Ahmed (PhD) to invoke state of emergency powers has come to be viewed across Ethiopia’s political landscape.

Just a month ago, there was outrage at the blocking of telephone and internet services in the four zones of the Oromia Regional State. The restrictions in these zones were at first outright denied by government but were later admitted to and described as necessary to respond to security threats in the area.

Following the first confirmed case of the Novel Coronavirus (COVID-19) in Ethiopia, the continuation of these restrictions inspired outrage. It was feared that these restrictions would keep citizens from accessing crucial information relevant to the disease. When the administration decided to lift the restrictions, saying that the security threats have been addressed, it was hailed as a small, considerate step in the fight against the outbreak.

Only about a week later, the government declared a state of emergency, which was subsequently ratified by the Parliament almost unanimously. Ironically, this gives the government power to revoke almost any democratic or political rights held by citizens if it is deemed necessary. Including, of course, the right to access information.

It was not without subtle and overt encouragement that Prime Minister Abiy’s administration travelled down the path toward declaring a state of emergency. The pandemic has been wreaking havoc on health systems and infrastructure across the world. Horrific scenes from other countries – of patients plugged into respirators and ventilators barely being able to breathe and workers digging mass graves – have been burned deep into the national psyche.

The public health threat the pandemic poses brought into greater focus the importance of the state. It made it painfully evident that only it has the organisational capability and power to respond to an emergency of this nature. No doubt, communities, individuals, private players and religious institutions have a part to play. But few, if any, came forward to deny that the state is the most critical entity in the fight against an emergency of this nature. In times of fear, the state becomes the embodiment of the interdependence of communities not the guarantor of individual independence.

Once Abiy’s administration realised that it had the justification, encouraged by recommendations from a group of lawyers convened by Chief Justice Meaza Ashenafi, the administration did not waste time putting into place restrictions aimed at enforcing physical distancing measures and personal hygiene. Before long, the administration had invoked its national emergency powers.

It had the right and the implicit blessing to do so from the political and intellectual elite. With the UNECA claiming that COVID-19 could take 300,000 lives in Africa, and the unfortunate experiences of tens of thousands in European countries, there was not much ground to argue that this is not a pandemic requiring the strictest of interventions. The Constitution also identifies epidemics as legitimate grounds for the government to invoke its national emergency powers.

Included in the list of restrictions of the national emergency was the ban imposed on almost all types of assemblies, including on social events. Handshaking is now banned, and wearing masks in public settings is mandatory. Privately-owned vehicles can only be used on certain days, a measure that has left many frustrated.

These restrictions though are not as severe as what many other countries have decided to enforce. Because of the need to balance public health emergency measures with the economic considerations of those living hand-to-mouth, Ethiopia’s response is relatively lax. There are no curfews and most non-essential businesses, except for bars and nightclubs, have been allowed to continue to give services and produce goods if they choose to.

The state of emergency, nonetheless, entitles the administration to a broad range of powers. It gives it the right to curtail almost every democratic and political exercise, including the right to sanction free expressions as well as hold citizens without charge or trial.

In broadening and concentrating power in the hands of the executive, a state of emergency gives the administration the ideal opportunity and justification to be far less accommodating of calls for accountability and transparency. All it has to say now is that there is a greater priority, which in this case is the safety of the public’s health.

Implemented with the expressed interest of fighting a pandemic, a state of emergency also reinforces and justifies the militarisation of the police and the broadening of policing and detention powers. In effect, it makes power more absolute, and thus easier to abuse.

Indeed, putting in place a state of emergency was an inevitable choice for a nation facing the spread of a deadly virus. It is a choiceless choice. More importantly, the administration has not grabbed power it was not entitled to constitutionally. In so far as the state is tasked with the wellbeing of its citizens, a nationwide emergency was justified to fight an epidemic of such deadly magnitude.

Abiy’s administration needs to be supported in this fight against the pandemic. There should be little confusion here. Its efforts to save lives should be aided and encouraged.

Yet the sweeping powers it has just been handed should also be closely scrutinised. If there is a lesson to be taken from one of the earliest republics, Rome, or nation-states of the 20th century that flirted with democracy, power is consistently consolidated in the name of the political and economic common good and the security of the people.

Hungary is only a recent example. Following the global outbreak of the virus, its parliament voted to suspend itself and allow Prime Minister Viktor Orban to rule by decree – indefinitely! With governments treating themselves to such sweeping powers, it would not be too much of an exaggeration to assume that Hungary will not be the only country coming out on the other end of the COVID-19 pandemic with an authoritarian government.

The need for activism, calling for government transparency and accountability has never been this important. Civil societies and leaders of the opposition can step up their game in their scrutiny of the actions of the administration. Their failure will no doubt be consequential for their leaders and the rank and file.

The most important job here, however, lies with the parliament, whose oversight of the executive needs to improve. It needs to make sure that all the measures adopted by the Council of Ministers are necessary and proportional, and that they are speedily lifted once the emergency is over.

Parliament also needs to acknowledge that freedom of expression and the right to information are critical even in times of crisis. The Council of Ministers’ action against the dissemination of misinformation should be interpreted very narrowly, and the Inquiry Board established as part of the ratification of the state of emergency should advise along these lines as well.

If there is one thing that the COVID-19 pandemic has made apparent, it is that the importance of the coercive powers of the state to maintain the collective safety of citizens remains a primary priority. But these current circumstances, as dire as they may be, should not be allowed to inspire the worst instincts of the government.

For countries like Ethiopia where scarcity of resources…

Posted on by Web Master

For many countries in the developed world, the Coronavirus pandemic is first a public health crisis, and then it is followed by woes in their national economies. For countries like Ethiopia where scarcity of resources, dilapidated public service and deeply entrenched poverty defines their economies, the progression is the other way around. Measures meant to be preventive have assaulted economic activities so much so that there is hardly any business that has not been affected by COVID-19.

Although slow, Ethiopian authorities are hard at work trying to respond with a series of policy measures in providing some forms of an economic stimulus package, meant to put cash back in peoples’ pockets, gossip observed. There is a national task force for COVID-19 responses under the chair of Adanech Abiebie, who also serves as the Federal Attorney General. A close political ally and comrade-in-faith with Prime Minister Abiy Ahmed (PhD), Adanech ought to be the busiest person in the administration, running multiple committees overseeing varied responses to contain the spread of the virus, claims gossip.

One of these committees formed is tasked with the job of identifying the most vulnerable in society due to the economic woes as a result of the partial quarantine imposed on the country and look into fiscal measures needed to cushion them from the impending hardship, according to gossip. Comprised of senior officials from the central bank, as well as ministries of Finance and Revenues, the committee may have completed and submitted its recommendations to the Council of Ministers, gossip disclosed.

The committee argues that a series of fiscal and monetary measures should be taken in order to see the administration’s response to safeguarding public health succeed, claims gossip. While doing so, businesses affected by COVID-19 responses, including exporters, need to be sheltered from their eventual losses, which may subject them to layoff their labour, according to the recommendation. Its authors want to see landlords who lose income by keeping their tenants and those who donate money to help the fight against the virus should be supported in a series of tax returns, claims gossip.

The largest docket the authors of the recommendation see in the fiscal response is part of the 78 billion Br the federal government claims from corporate, value-added and excise taxes in the 15 years beginning from 2005, gossip revealed. Of this, close to 34 billion Br is registered in the government books as receivable, while the balance is either appealed or under litigation, gossip disclosed. No less than 80pc of this money is owed by companies in the manufacturing and construction sectors, as well as wholesale trading, industries massively hit by the COVID-19 impact, claims gossip.

The committee has identified a little over 3,000 companies that owe the government 8.1 billion Br in tax in the 10 years beginning with 2005, says gossip. The intention is to forgo this amount altogether, including the interest and penalties, gossip disclosed. An additional over 3,200 taxpayers have been identified for owing the government a total of 25 billion Br in tax (including interest and penalty) for the four years before 2019, revealed gossip. A series of recommendations were made to forgive the interest and penalties should the taxpayers agree to pay one-quarter of the principal within a month and the remaining 75pc in a year, claims gossip. Should they agree to pay the full amount within a month, the administration is recommended to forgo an additional 10pc from the principal, according to gossip.

The committee wants to see the administration be kind to the landlords who choose to keep tenants – whether residential or businesses – while the latter remain unable to pay rent, claims gossip. If these recommendations are endorsed by the Council of Ministers, property owners will end up having the 30pc tax imposed on their income from rent waived for a year, gossip claims. Should companies decide to pay their labour during the months of April and May but let them stay home, they could be spared of paying income tax for four months, including the amount they contribute to the 11pc in a pension fund, disclosed gossip.

While exporters should be allowed to retain 30pc of forex from 90 days to six months, the administration is also advised to provide liquidity in the form of fast-tracked loans to small and medium companies that are not usually the best friends of the big banks, claims gossip. The authors of the recommendations foresee the state-owned Development Bank of Ethiopia (DBE) becoming a financial vehicle to channel these funds, gossip claims.

However, the most generous prize will go to businesses that acquired properties from the state through the privatisation process, claims gossip. Those who have not serviced their arrears within the five years of acquiring properties have been subjected to painful amounts of interest and penalties; they may soon see an opening not only to extend the time to pay the principal, but the total amount in penalties and interest will be forgiven too, gossip claims.

Agency Pleads for 3b Br Bailout for Small, Medium Enterprises

Posted on by Web Master

The federal agency that oversees small and medium enterprises has asked for a three billion Birr bailout from the government to rescue the businesses endangered by the economic recession caused by the global outbreak of Novel Coronavirus (COVID-19).

The Federal Small & Medium Manufacturing Industry Development Agency submitted a proposal on Monday, April 20, 2020, to the Ministry of Trade & Industry calling for support. The ministries of Revenues and Finance were copied in the proposal.

It requested that the Ministry and other government institutions provide these businesses with liquidity cash, create market value chains, reschedule their loans, give them tax relief, exempt them from interest on loans, and provide the enterprises with raw materials.

The document was prepared by a nine-member technical committee, which was formed following a request from the businesses calling for the government’s intervention in the case.

Members of the committee are representatives from the ministries of Trade & Industry as well as Finance, the Job Creation Commission, the Development Bank of Ethiopia, and small and medium businesses. The committee assessed the effect of the pandemic on these businesses and tabled technical and financial recommendations.

The sector, which is comprised of over 18,800 small and medium manufacturing businesses, is suffering from the pandemic as demand for products has sharply declined, according to Ashenafi Melese, communications director at the Agency.

Manufacturers of wood and furniture, metal, leather, and other business that supply construction inputs contribute 6.6pc to the GDP but are collapsing because of the declining worldwide economy, according to the document.

The study also recommended that businesses temporarily divert their efforts to the production of food, masks, detergents and sanitation-related commodities. It also suggested that the government support them by allowing them to stock their products in government facilities, purchase and use their products, facilitate online or e-commerce sales for their commodities, and provide them with raw materials and advanced technology.

The hotel industry has been already suffering for the past four years due to civil unrest in the country, according to Fitih Weldesenbet, president of the Ethiopian Hotel & Related Service Providers Employers’ Federation.

“There’s also a drought of cash and the burden of debt, which makes the situation difficult to sustain in the business arena,” said Fitih.

Following the lockdown of the hospitality industry, the Federation is asking the ministries of Culture & Tourism and Finance for incentives and technical support, according to Fitih.

“We ask that the government provide a one-year suspension of interest charges on loans, tax relief, and an extension of debt payments to 30 years, as well as periodical duty-free trade,” said Fitih.

The sector, which registered 15 to 18 billion Br in capital and employs around 450,000 people is faced with an overwhelming financial problem, according to Getachew Haile, president of the Ethiopian Micro, Small & Medium Enterprise Employers’ Federation.

“Most of the enterprises don’t have cash on hand, because every cent has been invested and returns are yet to come,” Getachew told Fortune.

Getachew also explained that small-scale enterprises were receiving projects from the government, but that stops after they are upgraded to medium-business status.

Due to a lack of finance, most of the enterprises are not producing commodities, especially the ones at the medium scale, according to him.

The Federation, which has 12,500 member enterprises, wrote a letter to the Agency, Job Creation Commission, and Ministry of Finance requesting low interest rate loans from banks and microfinance institutions, as well as a stimulus package, provision of sheds, tax relief for a year, and loan rescheduling.

After reviewing the proposal from the Agency, the Ministry of Trade & Industry sent the policy recommendation to the macroeconomic team led by Prime Minister Abiy Ahmed (PhD) for approval, according to Teka Gebreyesus, state minister for Trade & Industry, which has also organised an operational committee to assist the sector.

“After the macroeconomic team decides on the issue,” said Teka, “the operational committee will supervise the execution of the proposal.”

Small and medium enterprises represent about 90pc of businesses and more than 50pc of employment worldwide, according to the World Bank Group.

“Even if it is too early to quantify, after two or three months the effect of the pandemic on the economy will certainly be severe,” Teka said.

The small and medium enterprises play a significant role in the economy through revenue generation, job creation, technology transfer, productivity, market linkages, proper utilization of resources, and equal distribution of wealth, according to Tadesse Getachew, an economics lecturer at Addis Abeba University.

“Hence the sector needs credit services, including extended loans, consultancy and training support, internal and external market linkages, provision of working premises for a minimum rental fee to undertake their production activities and one-stop-centre support,” recommended Tadesse.

Private Energy Firm, Gov’t at Loggerheads Over Debre Birhan Wind Project

Posted on by Web Master

Terra Global Energy Developers, a California-based energy company, has been embroiled in a dispute with the government over the Debre Birhan Wind Project, which was recently added to the list of projects to be developed in a public-private partnership (PPP) arrangement.

Owned by an American of Ethiopian origin, the company signed a memorandum of understanding (MoU) in 2012 with executives at Ethiopian Electric Power (EEP) to develop the farm on an engineering, procurement and construction (EPC) basis. Under this arrangement, a contractor is responsible for work from design to procurement and from construction to the commissioning of the project.

However, last month the board of the Public-Private Partnership Directorate approved the project’s development under the PPP scheme. And the project was set to be bid on by private companies who wish to build and operate the farm. In parallel though, Terra Global has gone a long way in developing the project and preparations to realise what would be 200MW of capacity from wind, estimated to cost up to 360 million dollars.

It proceeded to invite independent consultants to conduct the feasibility studies, where nine responded including Factor-4 Energy Project, Energy Workstatt Consultant, Harness Energy, Opus Ventus, Sgurr Energy, Environmental Forward Observer, Addis Geo Tech, Lightener Logistics and Trianon Partners. Terra Global also completed a tender process to procure wind turbine generators from a turnkey construction contractor and secured financing for the construction of the project from a consortium of banks in China. The consultants conducted an 18-month feasibility study and delivered it to Terra Global, which then submitted it along with technical, economic and financial documents to EEP in October 2015.

EEP invited the company for the final contract negotiations in December 2015.

Upon arrival for the negotiations, the company was informed that there had been a change in the government’s policy on the execution of power projects that requires forming a power purchase agreement (PPA) and necessitates a bidding process. The contract was switched to that of an independent power producer (IPP) agreement, in which a private company develops a power plant, generates power and sells it to the government.

This led to further review and deliberation on the pending project. At the beginning of 2016, the energy company reviewed its proposal documents in response to the policy change and re-submitted a revised proposal to EEP to be allowed to continue its work on an independent power producer (IPP) basis. Despite sending consecutive letters, the company received no response from the government, according to Dereje Abebe, CEO of Terra Global Energy Developers, which claims that it spent 4.5 million dollars over the last eight years in preparation for the project.

“We’re victims of bureaucracy,” Dereje told Fortune. “We’ve sent letters to former Prime Minister Hailemariam Desalegn and Prime Minister Abiy Ahmed (PhD).”

In the interim, the government approved a new law in 2018 that allows collaborations with the private sector to develop mega-projects, including energy plants. Initially, the board of the PPP Directorate approved 17 projects, including solar, hydropower and road projects. Debre Birhan Wind Project was not on the list.

In April 2019, the senior management of EEP and Terra Global had a discussion on the revised proposal, and EEP forwarded a recommendation letter to its board to exempt Terra Global from a bidding process on the Debre Birhan Wind Project. Lacking a response from EEP, the company sent a letter to the Ministry of Water, Irrigation & Energy detailing the waiver request and asking to commence the construction of the project. Seleshi Bekele (PhD), minister of Water, Irrigation & Energy, wrote a letter last September making it clear that the project should not be included in the PPP, since it was under negotiations before the legislation of the PPP proclamation.

The waiver does not mean it is exclusively given to Terra Global, and the company should conduct face-to-face negotiations with EEP, according to Seleshi, who is also a board member of the PPP Directorate.

“The public’s interest is at stake too,” Seleshi told Fortune. “Hence, the company should aggressively work on the negotiations and conclude them. The government is to decide if the company isn’t holding up its end of the bargain.”

“It’s better for the public interest to keep the two options, although there is nothing decided on the contradiction,” said Ashebir Balcha, CEO of Ethiopian Electric Power, “If Terra can’t raise the needed financing, then the government can take this option and Terra would be reimbursed for all of their spending. This can be done by either the government or the winner of the bidding process of the project.”

Subsequent to Seleshi’s waiver, EEP called Terra Global for negotiations on the project of the Debre Birhan Wind Project at the end of December 2019. However, executives of Terra Global postponed the meeting due to COVID-19 until August. It was a shock to the executives of Terra Global to learn that the PPP Directorate under the Ministry of Finance had tabled the project, along with five more wind projects that were approved late last month, to the board in January.

Terra Global swiftly responded with a long letter asking for clarifications, while at the end of February, its executives floated a tender requesting bidders to submit proposals to develop the Debre Berhan Wind Project in a joint venture arrangement.

The company has issued a bid to work on the project jointly, which shows that they cannot develop the project, according to Moges Mekonnen, public relations director at EEP.

“Besides, the company hasn’t sent the necessary documents on financial matters for the project,” said Moges.

It is a statement Dereje refutes. He claimed Terra Global has submitted all the documents in the last eight years, and that the EEP does not have any ground showing that the company does not have the capacity to complete the project.

The project will take at least another year to go through a bidding process. If the company provides the mandatory documents for the negotiations and arranges its legal representation in the country, then it is going to be considered a benefit to the public’s interest, according to Moges.

The key to the dispute is whether Terra has grounds to claim it has a binding commitment from the government to pursue the project. Not according to Aschalew Ashagre, assistant professor at the School of Law & Governance at Addis Abeba University and a practicing attorney. A memorandum of understanding is not binding at any level since it is more like a wish-list, he told Fortune.

“If the project somehow ends up with someone other than the company, and the government is at fault without even having a contractual agreement, the company can ask for a compensation fee from the government for all of its expenses,” said Aschalew.

That seems the path Dereje is willing to take. He is determined to continue with the pace his company has taken over the years, hoping that the government will not change course on this project.

“We’ll not get caught up in the confusion,” Dereje told Fortune. “But if things turn out to be worse, which we hope they won’t, we’ll take legal actions against EEP.”

Hotel Occupancy Rate Hits Rock Bottom

Posted on by Web Master

The hotel room occupancy rate in the capital has fallen sharply to two percent for the first time in years, according to the latest survey conducted by the Addis Abeba Hotel Owners Trade Sectoral Association (AHA).

The hotel industry, which recorded a 64pc average occupancy rate in the last fiscal year with an average daily rate of 72 dollars a room, is one of the businesses hit hardest by the economic downturn caused by Novel Coronavirus (COVID-19). After Ethiopia reported the first case in mid-March, the occupancy rate slumped to below two percent, leading to losses of 35 million dollars in revenue a month.

“Hotel owners with heavy debt burdens are now feeling the heat and realising the industry could fall into a tailspin,” reads the report, “leading to a potential uptick in defaults.”

Out of the 130 member hotels of the Association, 88pc of them have closed their doors partially or fully due to low occupancy rates. About 56pc of them have fully ceased operations. A number of the remaining hotels are serving as quarantine centres for travellers entering Ethiopia. A total of 23 hotels are serving is this capacity – including Skylight, Ghion, Azzeman, Saphire and Harambe hotels – providing a total capacity of 1,700 beds.

Two weeks ago, Hyatt Regency, one of the 10 internationally franchised hotels in the capital, temporarily closed its doors for almost two months and granted paid vacation to its more than 500 employees. Many of the local brand hotels have also stopped operations due to the loss of business.

Following this, the Association has been working with the government over the past several weeks to mitigate the damage to the industry, according to Biniam Bisrat, president of the Association, whose member hotels have 8,667 rooms at an average of 67 rooms a hotel. The largest share of member hotels, about 38pc, have a three-star rating.

The Association is in a series of discussion with officials of the Ministry of Finance and the National Bank of Ethiopia (NBE) over loan rescheduling as well as soft loans with a lower interest rate, according to Biniam.

“We want the banks to share our burden,” he said. “We understand the operational and other costs they incur, but they can help the industry by granting loans with a lower interest rate that will enable the hotel owners to keep paying employees.”

Out of its members of the Association, 105 of them have outstanding debt at banks, either because they borrowed for project financing or working capital.

“It’s in our best interest to not lay off employees,” Biniam told Fortune. “We invested a lot in them, and they’re with us during the good times.”

Globally, COVID-19 has affected 50 million jobs in the travel and tourism industry, according to a report from the World Travel & Tourism Council, which forecasted that it will take at least a year to 18 months for the industry to recover fully.

As a coping mechanism for the current situation, the hotels should come up with innovative strategies, according to Yonas Moges, the managing partner at Calibra Hospitality Consultancy, a firm that is known for bringing international brand hotels into the country.

“Most of the local hotels target foreigners and tourists as customers,” Yonas said. “This has to be changed and they need to adjust themselves to cater to local customers by making their food and beverages affordable.”

Yonas adds that the government should provide a way for hotel owners to get soft loans from the Commercial Bank of Ethiopia (CBE) or the Development Bank of Ethiopia (DBE) to enable them to pay salaries for at least six months. He also advises the hoteliers to give away the perishable food items in their refrigerators to those who are on the front lines in the fight against COVID-19 as part of their corporate social responsibility.

Even after the COVID-19 pandemic is over, the Association, the Ministry of Culture & Tourism and the Ministry of Health should develop new calibrated hygiene and sanitisation standards that all hotels must comply with, Yonas recommended.

Most importantly, the hoteliers should maintain and properly keep the hotel facilities by cleaning the food storage areas and repairing the water pipe systems to avoid odors and dripping faucets while their buildings lie idle, he said.

“The hotel owners should think ahead on properly sanitising and disinfecting the entire facility of their hotels to make it ready for reopening,” Yonas added.

Ministry Orders Schools, Parents to Decide on Fees

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Amid a heated standoff between parents and private schools over tuition, the Ministry of Education has ordered schools and parent committees to sit down and make decisions on payment.

The two parties have been at loggerheads over a monthly school fee, since students have not been going to class following the government’s March 16, 2020, decision to close schools for the rest of the academic year as a preventive measure to contain the spread of Novel Coronavirus (COVID-19). The Ministry intervened and ordered the two parties to have a discussion and resolve the issue.

After negotiations with the parent committees, private schools should partially or fully spare parents from monthly fees after examining the financial status of individual families, according to the letter that was signed by Geremew Amenu (PhD), state minister for Education.

Parents are obligated to pay 50pc to 75pc of their children’s monthly payments after the administration of the school presents documents that show its monthly expenses to the parent committee. The fee will be allocated after the parent committee approves it.

The decision that was issued on April 20, 2020, also mandates that private schools provide education electronically and keep on paying salaries to the teachers and administrative staff at schools. The schools are supposed to encourage students to learn from home by using various technologies like Telegram and other social media.

The primary purpose of the decision is to enable private school students to have access to education from their homes and to avoid economic and social problems for private school staff, according to the decision.

Before passing the decision, the Ministry conducted a field survey on 36 private schools and held discussions with private school associations and parents.

All private schools should facilitate conditions for parents who cannot afford to pay the monthly fee for reasons related to COVID-19, which is affecting the global economy, according to Wondwosen Tamrat, president of St. Mary’s University and former chairman of the Private Higher Education Institutions Association.

“Parent committees should work together to build stronger bonds with schools,” said Wondwosen.

Private schools should urge teachers and school staff to reduce extra fees paid for transportation and other expenses, according to the decision set by the Ministry.

“The school can’t do anything by itself despite the impact on students and parents,” said Marta Demssie, a mother of three, who pays 3,000 Br and 2,700 Br a term for her two children to attend a private school in Sidist Kilo.

After analysing their capacity, private educational institutions should make a 25pc reduction on the monthly student tuition fee for regular and evening classes for the next three months.

An expert in the education sector believes that the decision by the government is valid, since it is beneficial for both parties; however, he has doubts about the practicality of using the digital education system.

“Both parents and private schools should cooperate at this difficult time,” said Abiy Menkir, assistant professor at Bahir Dar University’s College of Education & Behavioral Sciences.

Efforts will be made by the Association to provide private schools with credit services, extensions of loans, and other ways to relieve the sector, according to Molla Tsegaye, president of the Association and board president at Admas University.

The Association will interact with relevant government bodies for the reduction of tax payments; in addition, it will strive to facilitate loans, interest reductions, and loan period extensions from banks.

“Although it’s not going to be like attending classes,” said Marta, “education through Telegram will help the children not forget what they have learned.”

Most governments around the world have ordered a temporary closure of educational institutions in an attempt to contain the spread of the COVID-19 pandemic. These nationwide closures are impacting over 90pc of the world student population, according to the United Nations Educational, Scientific & Cultural Organization (UNESCO) report.

“Parents who can pay must pay their student’s monthly fee, and teachers should make education accessible using as much social media as possible,” said Abiy.

The government should have a long-term plan when it comes to education, he recommended.

Local Tech Firm Launches E-Learning Platform

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Winner System, a subsidiary of Winner Industrial Engineering, has developed the Online Learning Management System to help higher education students and teachers continue classes during the Novel Coronavirus (COVID-19) lockdowns.

A team of three experts developed the platform on the existing e-Student system, allowing students and teachers to continue classes online from wherever they can connect to the internet. The original e-Student system was launched seven years ago and has been used by institutions of higher education. Winner System has upgraded it to an e-learning management system.

Originally, the e-Student system was used for admissions, registration, adding and dropping courses, grade submissions and graduation. Currently, eight universities, including Meqelle, Adama Science & Technology, Madda Walabu, Ambo, and Kotebe Metropolitan universities, and Catering & Tourism Training Institute, are using the e-Student system.

With the Online Learning Management System upgrade, students, teachers and higher education institutions will benefit, according to Filimona Berhanu, CEO of Winner System. The company was established to supply higher education institutions with tech solutions and is a subsidiary of Winner Industrial Engineering, which was founded in 2010. Currently, it employs 15 staff.

The Online Learning Management System, which was launched two weeks ago, took 15 days to develop, and currently, Meqelle and Adama Science & Technology universities have started using the upgraded online system for their students and teachers.

PhD and postgraduate students have more access to technology than others and are making good use of it, according to Yemane Seged, business application administration and development team leader at Meqelle University.

The system that is accessed through the internet will be monitored and regulated by the universities who are using the system.

The new system has features that allow the sharing of course materials; uploading video, audio and PDF materials; submitting individual and group assignments; and chatting online, among others.

It has been more than five years since Meqelle University started to use e-Student and two weeks since students started using the upgraded Online Learning Management System, according to Yemane.

The government closed all private and public schools, including universities, due to the recent COVID-19 pandemic to limit transmission of the virus. Since the closure, students have returned home from all universities. Elementary and high school students are also staying at home and following class through a television programme transmitted by the Ministry of Education.

If there is good communication between students and teachers through the system, it is possible to shorten the time of courses when students return to school, according to Abebe Girma, lecturer and associate dean for research at Adama Science & Technology University.

It has been three years since the University started using the e-Student system. The University officially announced to their students the use of the system on its Facebook page.

“I gave my students various assignments and course materials,” said Abebe.

Universities who were using the e-Student system before are not required to re-register their students on the platform.

Teachers and students who were already using the system can continue classes online using their existing accounts and passwords, according to Filimona.

Winner System has also upgraded the digital payment system on the current e-Student platform.

For the current fiscal year, the country allocated 50.6 billion Br for education, which covers 13pc of the federal budget for the 50 public universities and 38 teacher education colleges throughout the country.

Experts in the field of information communication technology believe that the upgraded system has various advantages in terms of affordability, accessibility and feasibility.

Students with no internet access account for less than ten percent of the group, according to Alemu Setargew, chief technical assistant at the University of Gonder, who believes that most of the students that joined universities have access to the internet.

“The system is beneficial, it doesn’t have a physical limitation, and it can be accessed anytime,” he said.

Teachers can follow up on the progress of their students on the system, because it can track students’ activities, according to Alemu.

Ethiopia Limits Funerals to 50 People

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If approved by the Council of Ministers, a new directive will allow a maximum of just 50 people to attend funeral ceremonies.

Drafted by the Ministry of Health, the directive limited the number of people that can attend a funeral ceremony as part of the current ongoing fight to ward off the potential spread of the Novel Coronavirus (COVID-19).

Tabled to the Council of Ministers last week, the directive followed the regulation that was issued by the Council two weeks ago to execute the state of emergency that was declared to contain the spread of the virus. The emergency decree gives the Ministry of Health a mandate to prepare health-related legislation including this latest directive.

In the making for the past month, the directive allows only close family members and friends of the deceased to attend the funeral ceremony. Before reaching the Council of Ministers, the directive was sent to the Office of the Attorney General for legal review two weeks ago.

Traditionally, funeral ceremonies in Ethiopia are known to be attended by a crowd of people, according to Seharela Abdullahi, state minister for Heath.

“This could potentially be a cause for the spread of the virus,” she told Fortune, explaining the reason for the directive.

The directive is expected to be approved in a week’s time. It proposes the formation of a 10-member temporary task force that will be responsible for overseeing the execution of the new procedure. Representatives from the ministries of Labour & Social Affairs, Transport, and Health will be members of the task force.

Apart from family members of the deceased, religious fathers, security forces, and those who will handle the funeral ceremony are allowed to attend funerals, according to the draft directive. It also mandates that those who are deployed to handle the burial process must wear full protective gear.

First reported on March 13, 2020, the number of total confirmed cases reached 122 at the end of last week. Out of the total number of people who have acquired the virus, 29 of them have fully recovered and been discharged from treatment centres. So far, the country has also reported three deaths due to the pandemic.

The Ministry is currently taking samples from all of the individuals who have recently passed away to identify the cause of death, according to Seharela.

Yonas Birmeta (PhD), an assistant professor at Addis Abeba University’s College of Law & Governance Studies, says the directive arrived at the right time. He believes that what Ethiopia can do right now is work attentively on preventive measures.

Usually, funerals are one of the key social practices in Ethiopia, according to Yonas.

“It might be hard for the community to accept and apply the new guidelines,” he said, “but obeying the directive is a must for the sake of community safety.”

Offenders of the restrictions and those who fail to adhere to the proclamation will be punished with up to three years in jail or a fine of up to 200,000 Br.

Ministry Solicits Additional Budget of $250m

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The Ministry of Agriculture, which completed its budget ahead of the project period, has pleaded for additional financing of 250 million dollars from the World Bank for the Second Agricultural Growth Programme.

The second phase of the Agricultural Growth Programme, which is part of the second edition of the Growth & Transformation Plan (GTP II), was started five years ago with a total of 581.8 million dollars. Of which, 350 million dollars is covered by the International Development Program (IDA) of the World Bank. The remaining is financed by development partners and parallel financing between the government of Ethiopia and IDA.

The Programme focuses on five areas including small scale irrigation projects, agricultural extension research programmes, agricultural marketing, programme management and agricultural public support services.

Small-scale irrigation takes the lion’s share with close to 44pc of the total financing. Agricultural public support services gets the second-highest budget with 129 million dollars, followed by agricultural marketing and value chain support with 120 million dollars. Agricultural extension research and programme management receives 51.4 million dollars and 62.8 million dollars, respectively.

After the budget was disbursed to the regional states, Amhara, Tigray and Gambella have fully used 100pc of their budgets. In contrast, Oromia and Southern Nations, Nationalities, & Peoples’ regional states scored 71pc and 80pc, respectively.

Most regional states have used up all of their budgets and require more money to finalise the projects, according to Oumer Mohammed, minister of Agriculture.

“Whereas some are en route to accomplishing their projects,” he told Fortune, “there are efficiency and contract estimation issues that led to the need for additional budget.”

After several consecutive meetings and screenings with the team of the World Bank, the possible injection of the budget was pushed down to 130 million dollars, according to Oumer. Regardless, the Ministry has not yet received any confirmation on the approval of the budget.

“Based on our conversations, we’re expecting it to be released by June,” he said, “but with the outbreak of the Novel Coronavirus (COVID-19), the agenda might change. We are waiting.”

If the World Bank’s additional budget is not released, the Ministry has directed the regional states to execute the projects with their budgets, according to Oumer.

The problem with such projects is in project design and goal setting, especially in agricultural projects, according to an agricultural economist who commented under the condition of anonymity.

“It’s always either very optimistic or very extravagant with the government projects in the country,” he said. “It’s evident the projects should resume at all cost rather than leaving the job unfinished to start new projects.”

At the end of the last year, the World Bank had issues with some of the small-scale irrigation projects in Amhara and Tigray regional states. By global standards, irrigation projects that are less than 15m in height are considered small-scale. However, projects at Amhara Taba, Belechit, and Enenzer in Amhara and DebereWork in Tigray produced dams higher than 15m. This has led to the termination of these specific projects by the World Bank.

“This was a huge mistake,” he said, “we had a discussion with the World Bank to subdue the problem.”

The second phase of the agricultural growth programme will tie the knot at the end of July as the second edition of the Growth & Transformation Plan (GTP II) is finalised. Before this, more than 20 employees that were hired on a contractual basis in the federal government for the project received letters a month ago notifying them that their labour would no longer be needed.

The Programme has also received one million euros from the Spanish Agency for International Development Cooperation (AECID). It is implemented in Amhara, Tigray, Oromia, SNNP, Gambella, Benishagul-Gumuz and Harari regional states and Dire Dawa, in which 157 weredasand 4,069 rural kebeleswere targeted to benefit 1.6 million people.

Bale Robe Kicks Off First Ever Inner-City Asphalt Road

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Alemayehu Ketema General Contractor, a local grade-one firm, secured a project to construct the first ever, inner-city asphalt road in Bale Robe town, Oromia Regional State, for 1.1 billion Br.

The road project, which is divided into 15 lots, covers 15Km and is expected to be completed in four years. The cost of the project will be covered from the town’s budget and a contribution from the community.

The inner-city asphalt road, which is the first for the town, will be two-layer and 20 metres wide. The two-lane road, which costs 73 million Br a kilometre, will also have a one-metre central median, side drainage, sidewalks and box culverts. It is expected to create 1,500 temporary and 15 permanent jobs.

Alemayehu Ketema, a company that was established in 1989 and is currently working on the construction of Bale Robe Industrial Park, Delo-Mena Irrigation Dam and a 63Km road in Dodola, signed the contract for the project in January after winning a bid that was announced by the Oromia Roads Authority. It vied with close to 10 bidders.

The company, which started the construction of three lots of the road last month, hired two subcontractors to execute the project with the planned schedule, according to site manager Biruk Negash.

The company started construction after taking 20pc of the total value as a down payment and subcontracted some of the work to MSD and Deraro construction companies for the project.

So far, the construction of 1.9Km of the road has begun, and the project has reached four percent completion, according to Samson Teshome, head of Bale Robe Construction Bureau. The contractor is expected to complete 30pc of the road before the end of the current fiscal year.

Yididiya Engineering Consultants Plc, a local company that engages with architects, consultants and engineering services, designed the road five years ago. The project was not kicked off at the time, however, due to budget constraints and political situations in the Regional State, according to Samson.

The asphalt road coverage of the town is seven kilometres. The town’s construction bureau is building 4.7Km of cobblestone road as well as five kilometres of gravel road on a yearly basis.

Paragon Engineering, another local consulting firm, is currently supervising the construction of the road.

The road will improve Bale’s economy and access to social services in the town, according to Shabu Abubakar, communications head at Bale Robe town.

“It will also benefit residents of the town as well as the surrounding villages,” said Shabu.