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Month: August 2020

Go Away Class Struggle, Identity Politics Is Here to Stay

Posted on by Web Master

A political party consultation was held at the UN Economic Commission for Africa’s (ECA) hall for national consensus. The most controversial statements came from Merera Gudina’s (Prof.) presentation on nation-building and the opportunities and challenges thereof. It offered an interesting reading of modern Ethiopian history, delivered with confidence and taking on subject matters unlikely to have made everyone happy. There only seemed to be one problem.

What happened to all of the class politics, its legacy and its contribution to the current political dispensation? Was it just really a temporary blip in the behemoth that is identity politics when it comes to Ethiopia’s political history? Was class analysis really only necessary in Ethiopia’s past, to understand power relations between the various languages and cultures of different groups and nothing more?

Yes. To understand why class has had, and will continue to have, very little impact on the political discourse and will not be used as a successful means of political organisation, it is essential to look at how Karl Marx understood it.

Ironically, Marx would have rejected identity politics. In his reading of history, the masses have been long divided by social categories and nationalities. They have had what is known as “false consciousness,” as opposed to class consciousness. This means that the masses will be barking at the wrong tree until their interests are aligned with their economic class. This effectively rules out identity-based politics by Marxian standards as the correct means of organising the masses.

Communist revolutions are final – marking the endpoint of history – because these will only happen when the masses, the proletariat, align with their class interests and will consciously organise and establish institutions along these lines, Marx theorised. All other revolutions will only have temporary outcomes, because the masses will not have identified what is at the root of their exploitation – the lack of control over the means of production.

“The totality of these relations of production constitutes the economic structure of society, the real foundation, on which arises a legal and political superstructure, and to which correspond definite forms of social consciousness,” Marx wrote in “A Contribution to the Critique of Political Economy,” articulating economic determinism.

Identity politics aims for the superstructure. It can influence the so-called “Base,” but economic structures are still the real foundation.

Here, people familiar with Marx’s theory would point out one crucial factor. The workers’ alignment of interest with their class was supposed to come on the eve of the communist revolution which, according to Marx, would only happen once capitalism has reached its late stage.

They would be right. That is how Marx saw history playing out. When the Student Movement broke out in the late 1960s, Ethiopia was a peasant society. Feudalism was still the name of the game. No wonder the masses identified with their lingo-cultural groups and showed little, if any, display of class interests.

In fact, Ethiopia is still an agriculture-based economy – if we go by the amount of employment. It should thus be in the future – as we are fully wedded with capitalism, and the mass of the workforce finds itself working in industry and is urbanised – that class politics take its rightful place, according to Marx’s analysis.

But this assumed one big element Communism failed to consider, psychological behaviour does not leave much space for class identification. The hole it created was later addressed by Communist regimes facing peasant-based societies – from Ethiopia to Russia to China – in a contradictory manner. Since the masses have yet to recognise their real interests, and could never hope to fight against systems organised by elites, a vanguard movement needed to be created to bring about the dictatorship of the proletariat – in essence, the establishment of a one party-state.

Vanguardism was an answer to Marx’s failure to recognise that people are not by nature wholly preoccupied with their economic place in society. We are social creatures to whom language is more than a means of communication; culture is more than a lifestyle choice; and religion is more than a tool for answering what happens after death.

These three things are part of what form our identity. Without them, most of us, or perhaps even all of us, are incapable of identifying our place in the universe. And the greater heterogeneity of the society we find ourselves in, the more critical these elements become to forming our identity. This is true for any country, and it is also true for Ethiopia.

The best means of illuminating this is perhaps the experience of the United States. One popular hopeful that wanted to ride the class consciousness wave as economic inequality worsens in the country was Bernie Sanders, US presidential candidate this year and in 2016.

His positions on healthcare, labour rights and international trade agreements, all of which focused on the challenges of low-income and middle-class Americans, should have won him their support across the board. But, no. The United States is a heterogeneous society. Black Americans and poor white working-class Americans did not look past their socio-cultural identity, create alliances alongside their class interests and put him in the White House.

African Americans vote for the party – or the typical Democrat, Joe Biden – that vows to acknowledge their historical marginalisation and swears by cultural diversity, although the Democratic Party’s record on realising a more equitable distribution of wealth is questionable. White working-class Americans, by and large, voted for the Republican Party, which has long vowed to cut taxes for the rich and stop the expansion of healthcare coverage. It is not about class. Some overlap may occur, but it is about identity mainly.

Ethiopia is no different. Finding a moderate way of conducting identity politics is all we can hope for. Class politics is fantasy. Do not simply take my word for it.

Take the major political players of the latter half of the 20th century. Two – Ethiopian Peoples Revolutionary Party (EPRP) and All-Ethiopia Socialist Movement (MEISON) – centred their movements on class struggle. Three – Tigray People’s Liberation Front (TPLF), Oromo Liberation Front (OLF) and the Eritrean People’s Liberation Front (EPLF) – made identity politics their central theme.

Now, tell me, which ones are relevant to Ethiopia’s politics today?

DEATH OF THE CASKET SALESMAN

Posted on by Web Master

The projections of health experts and economists on the public health and food security impact of the Novel Coronavirus (COVID-19) pandemic have been bleak, especially when it comes to low-income countries such as Ethiopia. The estimates have not been entirely wrong in terms of deaths from the virus, clocking in at 770 in Ethiopia. But the picture of overall fatalities has also come to surprise some, especially funeral service operators.

Between March and July, sales of caskets fell by about half, a counter-intuitive trend compared with what had been projected ever since COVID-19 began to make its rounds across the world.

This is a combination of improved hygiene among the public as a response to COVD-19 campaigns and lower traffic accidents since people became less mobile. Traffic fatalities went down by 12pc over the past six months compared to the same period last year, according to the Addis Abeba Traffic Management Office.

Things are a little complicated though on whether hygiene campaigns did indeed lead to lower mortalities or if the lowered sales of caskets do really mean less numbers of deaths. The Addis Abeba Vital Events Registration & Information Agency recorded a drop of around 40pc in the number of deaths, though it admits that its numbers might not reflect the reality on the ground.

Other indicators do not concur. There has not been anything out of the ordinary, according to the Addis Abeba Mortality Surveillance Programme, which uses different methodologies to assess deaths, including software developed by the World Health Organisation (WHO). But the Programme believes that the results from June and July, yet to be tallied, will give a clearer picture.

Condominium Crisis, Yet Again

Posted on by Web Master

A pool of stagnant rainwater is the first thing that greets someone making their way into the branch office of the Addis Abeba Housing Development Bureau located at the Bole Bulbula condominium site. A wooden slab lies in the middle of this floor, a glorified walkway amid the bits of plastic, wood and general building debris strewn around.

This walkway leads to the stairs to the first floor. Halfway through to the stairs, a small printed congratulatory post welcomes the “second round of house owners” for the middle-income housing scheme, the registration and payment for which started nearly eight years ago. At the time, over 160,000 aspiring homeowners jumped at the opportunity.

The attempt at a festive atmosphere continues to the first floor with the colourful deflated balloons hanging atop the wires coming out of the ceiling. The first floor is infinitely better than the ground floor. Here the floor is cemented, the walls painted; and though the window panes do not have glass in them yet, there is a general sense of order.

A few tables and chairs are spaced out in the room for these lucky winners. One officer from the Bureau is assigned to sort the necessary paperwork. This is where Daniel Abebe has been coming to sort out the ever-continuing issues with his home.

When he found out that his name had been drawn out of a raffle for close to 60,000 other people over a year ago, he was ecstatic.

“I didn’t know how to contain my happiness,” he said. “I thought I was finally a homeowner after 15 years of renting.”

Daniel was in disbelief for many reasons. For one, when he had started saving up for the housing scheme, there were over 140,000 others along with him that put their name in. The housing scheme, divided up into middle, lower-middle and low-income tiers, was simple enough when it started out in 2013, but its execution over the years has been anything but.

The idea was brought up as a solution to the ever-growing demand for housing in the city. Low and middle-income segments of society were targeted through this programme that would enable them to save up a certain percentage, while the rest would be financed through the Commercial Bank of Ethiopia (CBE).

Aspiring homeowners are required to save 40pc, 20pc or 10pc, depending on the level of income, of the total cost of a government-subsidised home; and after depositing the allotted percentage, ranging from a studio-style to a three-bedroom apartment, they partake in a raffle drawing. The lucky ones get to receive the first finished houses, while the remaining wait for the next round.

The first round of the middle-income housing scheme a few years back handed over only 1,200 homes. Last year, close to 19,000 individual winners of the second round of the raffle were announced.

“We were told that the houses would be ready in three years time when we registered for the programme,” said Daniel. “Seven years later, our homes don’t even have electric or water lines in place.”

At the time, Daniel was informed that his condominium, located in Bole Bulbula, would soon be ready, and he would have to take all the necessary legal steps until then. Paperwork was aplenty.

Providing documents authenticating that he had been saving the required amount over the years from the Bank and another form from his kebele verifying that he did not own a house already were the initial steps. Following that, he signed a loan agreement with the CBE for the remaining 60pc of the payment for his house.

When Daniel registered for this home, he was expected to pay around 168,000 Br in total for his one-bedroom condominium. By the time he signed the agreement with the Bank, it had grown to nearly half a million Birr.

“Inflation was the reason that we were given,” he said. “But the reasons for the delay itself matter more than that.”

Administration mandate issues between the CBE and the City Administration on the management of the houses had also taken time to resolve, he was told.

The contractors were another issue.

“We’ve had so many contractors change over the past few years, and this has caused the delay,” he said. “The one we are told to communicate with now was signed onto this project a few weeks back.”

But eager to get a house after waiting for so many years, Daniel signed the necessary contract with the Bank. The house deeds were passed onto the Bank as collateral until he repaid his loans, and he was informed by the Office that he would be called to get the keys to his home very soon. The clock on the interest for his bank payments was wound up and set to go. The condominiums, however, were far from ready.

“We lobbied the Bank to give us a grace period when we knew our homes weren’t ready,” he said. “Eventually, we were granted a year’s time.”

This was in May 2019. Now homeowners like Daniel have not only finished their one-year grace period but an additional three months in consideration of the impact of the Novel Coronavirus pandemic (COVID-19). The loan from the Bank along with the interest payments have since then been compounding.

“I’ve been paying rent for my house,” he said. “And now I have an additional loan to pay for a house I don’t even live in.”

His house, like many others in Bole Bulbula, is not ready. While the buildings have been painted and the window panes look in place to the outside onlooker, their insides tell a different story. Water, sewage systems and electrical lines are not in place, just concrete structures outlining a potential home.

This rings true for other middle-income condominiums deemed ready across the city. In the Bole Beshale site, there are 53 towering condominium blocks with over 6,000 units. Guards are stationed every few blocks protecting items like rebar and electrical wiring from thieves. The houses here were also part of the raffle in February 2019. They make up part of the 38,000 units under construction in the city under the same scheme.

Here, like other sites, homeowners who have paid in full for their homes are left only with similar structures. Dagmawi Gebre had been living in Germany when he found out he, too, was one of the lucky ones.

He had wanted to finalise the process through family members but was informed that would not be possible. He packed his bags and came straight away, naively thinking that the arrangement would not take more than a few week’s time to finalise.

“It took me about five months to get the deed to my apartment,” he said. “This was after paying the remaining 60pc of the house.”

The worst part was waiting in line for hours every day for almost two weeks at the City Administration office, turning in one document after the other, according to him. And now, a year later, his house is still only cement walls and a standing structure on the second floor of a skeleton building.

The low-income and lower-middle-income schemes for which over 700,000 people have registered has followed a different trajectory.

The low-income programme, in which homebuyers raise 10pc of the condominium price, hve all been provided for as far as the data from the authorities show. About 23,000 people had registered, and 24,000 units of housing were built. The chapter there was closed.

The lower-middle-income housing scheme, for which participants were expected to save 20pc of the total cost of their house, had initially absorbed another set of registrants. The first-ever housing scheme in 2004, which registered close to half a million people, introduced the concept of condominium housing to the country. When the two schemes were integrated, a recount showed over 800,000 were saving for the homes.

To date, only 276,502 houses have been handed over to people under this scheme.  And close to 50,000 remain from the registration 16 years ago.

The list goes on. Condominium sites are scattered from Bole Beshale on the outskirts of the city to the central ones in Megenagna and near Haya Arat, all of which are towering buildings waiting to be finished.

It is not that homeowners have not voiced their concerns. But questions of how and even to whom has posed a problem. The responsibility of the homes, previously under the Addis Abeba Housing Development Project Office, has been handed over to the Addis Abeba Housing Development Corporation. The latter is now working alongside three other offices under the wings of the Addis Abeba Housing Development Administration Bureau, which has been reshuffled more times than the homeowners can keep track of.

“It’s all very confusing,” said Daniel, who is now actively working with a few others to assemble an association. “There’s someone new every time who says they are not familiar with our case.”

Desalegn Terefe, director of the Housing Development Corporation, says that it is up to the City Administration to answer any question on the housing scheme, while Senait Damtew, bureau head of the Addis Abeba Housing Development Administration, did not respond to the phone call and text message from Fortune.

Contractors working on the project, over 2,000 of them, state multiple reasons for this crisis. One contractor who chose to remain anonymous stated that finance and necessary inputs for the project were lacking.

“Getting payment approved for one process requires visiting and getting signatures from multiple offices,” he said. “This is in addition to having a shortage of cement blocks, sand, and other materials, as the government is responsible for providing this for us.”

That there are more houses being built and that it is focused on vertical growth, with consideration to space limitations, is commendable, according to Zegeye Cherinet (PhD), head of competence at the Centre of Architecture & Design under the Ethiopian Institute of Architecture, Building Construction & City Development.

But the country’s lack of experience in urban planning development cannot be overlooked as the original source for this mess, according to him.

“With 80pc of the population living in rural areas, we don’t have the institutions or the experience to implement a successful urban planning and housing plan,” he said.

But realising this and working on the capacity of the country is the first step the expert advised. This begins with crafting a housing policy, according to him.

“It’s much like health, education and other important sectors, as housing is a basic and constitutional right,” he said. “Following this should be relevant strategies and plans for housing.”

Urbanisation and modernisation are intrinsically intertwined, and this requires not only working toward increased technical competence but also raising the consciousness of the population on how to live in urban areas, according to him.

Pragmatic Approach Begs for Dealing with Failed Forex Regime

Posted on by Web Master

For some time now, those at the helm of multilateral financial institutions have felt like they have an ideological ally in Ethiopia where economic management is concerned. Ethiopia has been on the right economic track, at least according to the International Monetary Fund (IMF). The improving consensus is mainly because of liberal economic reform efforts of Prime Minister Abiy Ahmed’s (PhD) administration.

Industries are opening for the private sector, and major state-owned enterprises are in the process of being transferred to private hands in a third-generation phase of privatisation. The third component of the Bretton Woods’ Holy Trinity of policy recommendations – a flexible exchange rate regime, which would deal a blow to capital account control – also seems to be on the horizon.

The creeping depreciation of the Birr against a basket of major currencies is one of the most perceptible changes that has pointed in this direction. There has not been a time when the value of the Birr has not been edging down; but it has been doing so at a steeper rate over the past two years.

In the five years since 2012, the value of the Birr against the dollar fell by over a third. In late 2017, the currency was devalued by 15pc against a basket of major currencies. After a short period of relative stability, beginning in November 2019, there has been a precipitous decline. Within less than a year, the Birr decreased by 22pc from its nominal exchange rate value of 28 Br against the dollar.

Together with a recent bill by the central bank that allows local banks to borrow directly in foreign currency, all of these are bold steps against longstanding capital account controls and a rigid exchange rate regime.

Indeed, Yinager Dessie (PhD), governor of the central bank, has indicated that Ethiopia is not many years away from removing the leash – where the Bank intervenes whenever needed – from its exchange rate regime, leaving the value of the Birr to the mercy of the market.

It is only standard that the IMF would commend these developments as a step in the right direction. Consistent in its call for a “market-clearing exchange rate,” it has argued that the current regime reduces access for the private sector, lessens confidence in the currency and diverts resources away from the formal economy because it inevitably creates a parallel exchange market. These are all valid points that should not be brushed aside.

Together with the World Bank, the IMF is consistent and determined in railing against the status quo in the exchange rate regime for its inability to reflect the value of the Birr in real terms. Its wise men and women believe the existing exchange rate policy leads to limited capital inflows and inefficient allocations of foreign currency to economic sectors and players. They create an economic environment of shortage, constraints and a quota system.

Fair enough. Too many Birr are being exchanged for too few dollars. The parallel market is a testament to this. It works according to the laws of supply and demand, to a more considerable degree, as a result of the absence of a central controlling entity.

The market left to itself does allocate foreign currency to those that are the most productive and value it the most – theoretically. When resources accrue to those that are productive, the economy becomes more competitive, and capital flows into the country, because investors are more confident they could take profits out. The value of the Birr remains more stable.

This happens in ideal circumstances. But Ethiopia’s economy is not ideal. An exchange rate that reflects the needs of the market to a higher degree – thereby clearing it – may not necessarily entail capital inflows or currency stabilisation. Neither could it guarantee the competitive stances of Ethiopia’s exports.

Those who are worried that the liberalisation of foreign exchange may fall short of its intended goals need to be heard. Ethiopia’s economy suffers from deep structural problems. It is also the case that there is not nearly enough information about transactions in goods and services and adequate monetary policy instruments to effectively manage the exchange market.

The more flexible it gets, several factors would determine the viability of the forex market, including the level of growth, demand, prices in exports, inflation and effective monetary policy, or lack thereof. All except the latter are prey to the country’s production capacity and aggregate demand.

What defines Ethiopia’s economic reality is severe limits in its productive capacity and lack of competitiveness in the global market. It buys far more from others than what it can sell them. There are advantages to the stability of the Birr only in as far as the country can continue to be less dependent on imports, improve its exports and reduce its vulnerability to the fluctuations of the international market.

But where Ethiopia’s foreign currency reserve remains subject to the vagaries of the world market in agriculture exports, making the exchange rate too flexible could create more problems than help address structural economic ailments.

The only component that will be left in the authorities’ toolbox as the flexibility of the exchange rate increases is indirect monetary policy instruments, including interest rates. Only around 35pc of the population is banked, in 2017, and the majority of savings and borrowing continues to be carried out outside of financial institutions, according to the World Bank. Neither does it help that a third of Ethiopia’s economy is estimated to be informal.

With a significant part of the economy standing outside of its influence, the central bank would not be that successful in effecting change on the exchange market through indirect policy instruments. It would thus truly be floating, without any meaningful controls left to the central bank. It should not be lost on advocates that a free market does not necessarily mean a market free of the state.

The state, however, is not doing a good job of managing the exchange market to ensure allocations of forex for an optimum return in the economy. For all that is evident, the forex regime is mismanaged currently, giving undue leverage to the bureaucrats at the central bank to determine who could make it from rags to riches. Access to forex in Ethiopia today becomes the indispensable key to succeeding spectacularly.

The status quo begs for change. The course of change would rather be pragmatic in its approach, but not losing sight of its strategic goals of creating an exchange market that functions based on demand and supply.

Although in a different context and stated long ago, the words of Dominique Strauss-Kahn (PhD), former managing director of the IMF, hit the message home.

“We must be pragmatic,” he said in a speech in 2011, referring to labour markets in that instance. “We must get past the binary and unhelpful contrast between ‘flexibility’ and ‘rigidity’.”

It was a speech that even contented one of the institution’s famous detractors, Joseph Stieglitz, for softening long-held views of “market fundamentalism.”

One of the IMF’s objectives has been creating “global monetary cooperation.” It is not a means to arrive at an end. It is an end unto itself, like reducing word poverty. At best, this means that the institution would attempt to harmonise recommendations on exchange regimes with developmental objectives of a country. At worst, and this is the case with having policy absolutes, it is insisting on these recommendations even when it is counterproductive.

No doubt, under ideal circumstances, flexibility is the right policy. It should be the long-term aim of Ethiopia, because it offers market dynamism and has been shown to improve competitiveness. But it should not be taken as a solution to currency instability or the forex shortage in and of itself. It is instead a complement to more comprehensive economic liberalisation that succeeds in addressing the economy’s dependence on imports, lack of diversified export structures and limited financial inclusion.

The flexibility of the exchange rate of the Birr would instead be attached to the rate at which the country addresses these structural failings under a politically different context. It could make a whole different impact where a political force takes such delicate and consequential policy moves with a clear and unambiguous electoral mandate.

Ethio Telecom Undergoes Major Expansion

Posted on by Web Master

Ethio telecom, the state telecom giant, has begun the process of replacing its business support system, which manages customer and billing information. The new components will enable the company to host 80 million customers, 15pc more than its existing capacity.

The new business support system, which industry experts call ”the heart of the telecom operators’ business,” will replace the seven-year-old existing system that has the capacity to accommodate 68 million subscribers. It enables the company to gain customer insight, compile real-time subscriptions and introduce new revenue-generating streams.

For the replacement of the components, the management of the company is currently negotiating with suppliers, according to CEO Frehiwot Tamiru.

The company is changing the system to break into a competitive industry that is in the process of liberalisation as well as replacing the software that has already reached the end of its useful life. The hardware of the system will also complete its lifetime this coming December.

“It’s about our survival,” said Frehiwot. “Even a telecom operator with 100pc coverage is nothing with an outdated business support system.”

Business support systems incorporate different segments including customer relationship management (CRM); billing; product management to offer cross-product discounts, pricing and managing products related to one another; and order management.

The existing system was installed during the Telecom Expansion Project (TEP) that was launched in 2013 through vendor financing. TEP included improving network service quality, increasing coverage and capacity on mobile service, building infrastructure with the latest technology and enhancing the information system domain of the company.

Along with replacing the business support system, the company is working on network and infrastructure expansion. It is expanding the wireless, fixed-line, power and transport network infrastructures. The expansion is expected to enable the company to host an additional 5.2 million new customers.

“It will enable us to be compete in the market,” said Frehiwot, “and generate revenue by leasing and renting infrastructure to companies that join the sector.”

Ethio telecom is also in the process of building 842 new tower sites in the country. Of these, 150 will be installed in the capital to expand the advanced 4G network. The towers will be added to the existing 7,100 towers. It also targeted the installation of 400Km of metro fibre and 2,000Km of backbone fiber-optic cable. Currently, Ethio telecom owns 23,000Km of fiber-optic cable.

The company is working on the expansion of the broadband network, intending to expand its customer base by 215pc to 669,400 users. For this, it is upgrading and swapping 910 multi-service access gateways (MSAG), devises that connect customers’ telephone lines to the core network to provide telephone and broadband services. It is also installing 202 new MSAG devices.

It is good that the company did not sit and wait until the government completes the liberalisation process, according to Dawit Bekele (PhD), regional vice president for Africa at the Internet Society, a nonprofit organisation.

“It’s a commendable move that the company is getting ready and bracing itself for competition,” said Dawit, who believes that the liberalisation of the industry will bring quality since there will be competition among the operators.

Ethio telecom is finalising an assessment that shows that its infrastructure can accommodate one more operator with a little reinforcement, according to Frehiwot.

Last month the Ethiopian Communications Authority, the primary regulatory body, drafted a directive that compels telecom operators to share their infrastructure and give collocation service to newly joining operators. The Authority estimates that an additional 40,000Km to 45,000Km of fiber-optic cable and 7,000 towers are needed to accommodate the new companies that are going to join the industry.

This does not include infrastructure for 5G networks, according to Balcha Reba, director-general of the Authority.

However, the two parties are at loggerheads over the opening of the sector to new infrastructure development companies or “infracos” as they are known. Ethio telecom argues that the industry should be closed to infraco companies. The Authority, on the other hand, argues that since Ethio telecom’s network infrastructure capacity is not there yet, infraco companies should join the industry to help create a favourable environment for the new operators.

Dawit, the expert, also strongly opposes the ongoing lobbying from Ethio telecom to ban infracos from joining the market, saying that it will undermine the liberalisation process and can potentially push away the new companies that are going to join the market.

“The government should intervene by supporting the Authority in this regard,” he said. “The regulatory body should remain autonomous and strong in order that the new companies that join the sector will have confidence in the country’s telecom sector.”

With the expansion plan, the company is working on introducing voice over LTE (VoLTE), a network that provides high-speed wireless communication between telecom operators while using third-party networks. So as not to face problems while sharing infrastructure, the company is working on power availability by investing in generators, power batteries, and increasing solar site solutions from 21pc to 32pc.

It is also upgrading its transmission by replacing its IP network, which will soon come to the end of its expected lifetime, upgrading its international gateway, and expanding its data centre to provide a collocation service.

What makes this investment different from previous iterations is that the company will do so using cash. The management is negotiating with the service providers to pay in installments, according to Frehiwot. During previous expansion projects, but mainly the Next Generation Network and Telecom Expansion projects, Ethio telecom carried out the upgrades by way of a 2.3-billion-dollar loan from China.

Bill Introduces Online Reverse Auction System

Posted on by Web Master

The government has drafted a new bill that introduces electronic reverse auctions, an online real-time procurement process whereby suppliers vie to secure a deal by offering increasingly lower prices during a scheduled period of time.

The new system will be used for products and services that have clear specifications, have multiple suppliers, and can be procured only through a financial evaluation process without a technical evaluation. The electronic reverse auction process will be replacing a procedure in which the government picks the winning company with the lowest price offer.

The draft proclamation, which also compels state-owned enterprises to process their procurements through the Public Procurement & Property Disposal Services, was sent to the Office of the Attorney General for legal review. The bill was drafted by the Public Procurement & Property Administration Agency but for the past six years went through various iterations as it shuttled between the Ministry of Finance, the Council of Ministers and the Agency.

The drafting process ran long due to two major causes, according to Setegen Gelan, director of public relations & communications at the Agency, mentioning weak institutional capacity at the Agency and political instability in the country as causes for the delay. During the drafting process, the Agency took the experiences of Tanzania and Kenya into account.

The Ministry of Finance and the Council of Ministers gave comments on the bill while it was in the making, according to Setegn.

Haji Ibssa, corporate communications director at the Ministry of Finance, said the Ministry has reviewed the bill to make sure that it complies with the other laws that are in the amendment process.

The bill, which is going to replace the decade-old proclamation, will stop the sale of bid documents and will make public enterprises and government offices avail bidding documents on their own and the Agency’s websites. The Agency is also in the process of launching a locally developed online platform called Electronic Government Procurement (EGP).

The bill also reduced the value addition rate for local manufacturers to get a margin of preference beginning at 35pc. The reduced value addition rate will be determined by new directives to be issued, according to the draft proclamation, which is expected to be legislated before December.

Lease agreements for the procurement of machinery and equipment, which can become outdated due to technological advancements, will also be allowed by the new bill. Before making large and expensive procurements, the government offices are required to prepare a project procurement strategy, according to the draft proclamation.

A new independent body that will directly report to the Prime Minister will be formed to play a mediating role whenever a complaint is filed against the government institutions involved in the procurement processes, according to the bill.

The draft proclamation prohibits state-owned enterprises from taking part in a bid that is announced by a federal agency they report to. A former employee of the government office who left that institution less than a year ago cannot take part in a bidding process announced by his former employer.

The Services, under the Agency, has been conducting procurements of goods and services on behalf of 174 budgetary government institutions since 2009. The new amendment will enable the Services to handle the procurement of public enterprises that are not budgetary institutions.

Mehari Redai (PhD), a university lecturer at Addis Abeba University School of Law & Governance, says that the bill has two dimensions.

Since state-owned enterprises are reporting to government institutions, which follow the government procurement procedure, it will not be wrong to make the state-owned enterprises follow the same procurement process, according to Mehari.

“But since most of the state-owned enterprises are business-oriented companies, they need to go through a process that will benefit them,” he said.

 

Ethiopia Lines 22 Irrigation Dams up for Construction

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The newly established government agency to oversee the construction of irrigation dams has kicked off a feasibility study and design process for the construction of 22 new medium and large irrigation dams across seven regional states at a total cost of 255 million Br.

The Irrigation Development Commission hired local companies that will conduct analysis on the projects’ economic, technical, legal and scheduling considerations before launching the construction of the dams. The companies hired for the feasibility study will also do preliminary and detailed engineering design of the dams.

The projects are located in the Oromia, Amhara, Somali and Southern, Nations, Nationalities & People’s, Tigray, Gambela, Benishangul-Gumuz and Somali regional states. The construction of one-third of the projects is planned to be kicked off this fiscal year since the study, design and review process is scheduled to be concluded this year. The remaining projects are set to be launched in the coming year.

The feasibility study and design of seven projects have been completed, and design review is expected to be finalised by December 2020. Megech, Gilgel Abay, Jemma, Bilate, Dabus, Gololcha and Gelana are the sites where projects are expected to begin this fiscal year. Oromia Water Works Design & Supervision Enterprise, the Ethiopian Construction Design &  Supervision Works Corporation and the Amhara Design Supervision Works Enterprise are reviewing the design of the projects.

The pre-construction phase for another seven projects that were started last fiscal year is still at an early stage, currently 20pc to 44pc complete. The design and review process is expected to be completed this fiscal year.

Terkan Irrigation Dam was awarded to Tigray Water Works Design & Supervision Enterprise; Mille and Abat Beles to Amhara Design & Supervision Enterprise; and Gilo and Sego to South Design, Construction & Supervision Enterprise. Borana and Shebelle were also awarded to the Ethiopian Construction Design & Supervision Works Corporation. All the companies secured the projects through a bidding process.

The Commission is in the process of hiring companies that will conduct feasibility studies, create designs and complete reviews of the remaining eight dams, which will be built on Shinfa, Angereb, Weyto, Shife, Marmora, Lower Genalle, Weyb and Buldeho rivers.

Once the design of the projects are reviewed, the Commission will then announce bids to hire construction companies, according to Bizuneh Tolcha, communications director at the Commission.

In the last fiscal year, the Commission allocated 14.3 billion Br for the construction of irrigation dams across the country. This year, it plans to construct 14 irrigation dams for 14.7 billion Br, four of which have already been awarded to contractors.

The projects are expected to effectively utilise the water resources of the country to help the agricultural sector, according to Bizuneh.

“In addition to generating foreign currency from exports, reducing poverty and creating employment,” said Bizuneh, “the projects are intended to ensure food security, agro-industrial inputs production and import-substitution.”

The Commission anticipates these irrigation projects will increase the agricultural productivity of the country by two to three percent.

Ethiopia has 12 river basins with an annual runoff volume of 122 billion square metres of water and an estimated 2.6 billion square metres of groundwater potential. However, the total irrigated area is less than eight percent of the 15 million hectares of cultivated land and only about 20pc of the estimated 5.8 million to 7.5 million hectares of irrigable land.

The projects will be very significant to the country, according to Shimelis Berhan (PhD), assistant professor of Agricultural Engineering at Haramaya Institute of Technology.

“The country hasn’t been using its water and land resources effectively,” said the expert, who recommends that the Commission and its stakeholders conduct land and crop suitability studies beforehand.

The government should also focus on conservation and reforestation by creating buffer zones such as trees and grass around the edges of rivers, according to Shimelis.

“The country is facing a serious problem of land degradation due to soil erosion,” he said.

Shortages of irrigation technology and technical knowledge, limited experience in design, construction and supervision of irrigation projects, low productivity of existing irrigation schemes, and the poor economic backgrounds of landholders should also be areas of focus, recommended Shimelis.

Companies Vie to Build School Dining Halls, Kitchens

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A total of 45 construction companies submitted bids for the construction of kitchen and dining halls across 151 schools in the city, a project estimated to cost 25.5 million dollars.

The Food Security & Productive Safety Net Agency is evaluating the technical and financial documents submitted by the companies for the construction of the facilities across the selected schools under the School Feeding Programme. Launched with the initiative of the former deputy mayor of the city, Takele Uma, the project is financed by the World Bank.

The construction of the facilities will be undertaken through a combined effort of the City’s Construction Bureau, Education Bureau and the School Feeding Agency, which is overseeing and facilitating the entire programme.

Announced in early July, the bid for the construction job closed on August 17 and 18, 2020, and the evaluation process is expected to be finalised by September 7. Initially, the bid attracted the interest of 534 companies, 45 of which submitted their bidding documents.

A total of 12 construction companies will be selected for the facilities that will be built across nine districts.

The assessment of the companies in the initial stage was composed of four aspects including ascertaining a CPO, or a bid security, along with separate financial and technical documents. The total time allocated for both technical and financial evaluations, with a 14-day period for presenting and responding to grievances, is 45 days, after which winners of the bid will be announced.

The construction of the dining halls and kitchens is expected to take a total of four months to be completed. The selected 12 companies will be constructing one lot each, under which there are up to 20 schools. There are a total of 90 schools with the capacity to host 400 students and the remaining with a capacity to hold 200 students.

While the initial idea was to divide the nine construction companies to the corresponding nine districts in the city, it was later decided that allocating only 20 schools or less under one lot would be best for the ease of management and supervision, according to the Agency’s deputy director, Tamrat Estifanos.

“This was also to ensure that we don’t further limit the participating companies,” he said. “One lot has already high requirements, and it would have eliminated further companies.”

Bole District, with 20 schools under it, requires the construction company to have an annual turnover of 166 million Br.

The Agency formed three committees; an evaluation, a technical and an endorsing. The evaluation committee will be responsible for assessing the initial requirements along with the financial requirements, whereas the technical committee will appraise only the technical aspects of the bid.

The cost for the overall construction of kitchens and halls is allowed to be 20pc more than the budget, according to Tamrat.

“But this will mean fewer schools will be upgraded,” he said.

Though the World Bank is financing the construction to a certain extent, the City Administration will cover the costs of the remaining 198 secondary schools in the programme once the bidding process has been finalised.

Based on the submissions that have been presented to the Agency thus far, only one submission has been presented for the Arada and Kirkos districts with 14 lots combined.

This will not entail cancellations of the bid, according to Tamrat.

“The Agency has the mandate to decide under the evaluation committee,” he said. “There will be assessments done to ascertain that the cost is not exaggerated, and this will be determined by drawing a comparison with the market price.”

Even in this case, where it is more than 20pc of the market price if it does not exceed the allotted budget, the company will be chosen in the interest of time and proceeding with the project, according to Tamrat.

The World Bank has allocated two consultants who are overseeing the process.

The huge gap in the number of companies that have bought the initial bid and those that finally submitted the documents indicates that the conditions of participation may have been too stringent, according to Dilnesahu Samuel, logistics and supply chain management unit head at the School of Commerce at Addis Abeba University.

“The conditions should be in place to ascertain that those not meeting the criteria won’t be able to do the job,” he said. “Otherwise, it will be screening the quality of the contractor.”

Fairness, one of the five basic principles of the country’s public procurement law, involves not demanding unnecessary details from the supplier, according to the expert.

“It should be well elaborated but not set up to hinder competitiveness,” he said.

Customs Commission Set to Go Online

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As of the coming Ethiopian New Year, companies in the import and export business will be able to process and secure permits and pay duties and tariffs online, according to the Ethiopian Customs Commission.

Once fully operational, the system, along with Electronic Single Window Service (ESWS), will enable users to receive all services online instead of through the Commission’s 17 branch offices.

With the existing system, companies in the import-export business were required to visit different government and financial institutions to collect supporting documents. In addition, they were required to send a representative to the Ministry of Trade & Industry, the National Bank of Ethiopia and other banks to obtain documents.

The new automated system enables the government institutions to upload the necessary approvals, letters and documents online where they will be approved or denied by the Commission. The entire process will only take two to three days.

As part of the implementation of the system, the Commission is training its staff, importers, exporters and officers from government agencies and banks virtually. The three weeks of training focuses on transit and warehouse service systems. Under the transit system, the trainees are coached on inward, outward, interior and route transit services. The warehouse service system training is related to analysing levels of risk and inspecting cargo.

The online system has eight matrix criteria to decide the risk level of imports and exports. The system then collects information, analyses it and assigns one of four colours to denote the level of risk – blue, green, red or yellow.

Freight labelled blue is unlikely to be risky and directly passes without any inspection. Freight with a green label needs some inspection, while red requires a physical inspection and must stay in a warehouse. Freight with the yellow label is identified as high risk and requires all types of documentation and inspection and stays for a longer amount of time than other colours.

As a start, the Commission is set to pilot the system in its five branches for a week at the end of this month. The Commission is also procuring and installing necessary equipment for the project.

The online system will be mandatory thereafter, according to Mule Abdisa, office chief of staff at the Commission.

“It’ll be significant in terms of reducing time, cost and resources,” sais Mule. “It’ll also be instrumental in curbing corruption, saving time, lowering costs and reducing inefficiency.”

The digitisation project aims at improving the country’s low ease-of-doing-business ranking, according to Mule.

Last year, Ethiopia was ranked 159 out of 190 countries, according to the World Bank’s 2019 Ease of Doing Business index.

The system will create a consistent system, an efficient tax collection system, and solve bottlenecks to the import-export trade, according to Mule.

As the problems in the sector are very complicated, online service provisions are not sufficient enough to solve the challenges, according to Kibret Abebe, founder and co-owner of the 12-year-old Tebita Ambulance Pre-Hospital Emergency Medical Service and board member of Addis Abeba Chamber of Commerce & Sectoral Associations.

The import and export sector is highly challenged by bureaucratic barriers and inefficiencies at the government offices, according to Kibret, who used to import medical supplies via a courier based in Dubai until Ethiopian Airlines took over the warehouse that was used by the service.

“The price of the gloves has exploded by 400pc since then,” he said. “When we want to import even medical gloves, we have to wait for a month.”

Asressa Yohannes, general manager of the Ethiopian Pulses, Oilseeds, Spices Processors & Exporters Association, which has been lobbying for online and one window customs services for the past six years, says the system may alleviate their hurdles.

“Exporters had to wait for two to three days to get the export permit after they submitted all the necessary documents,” said Asressa.

Exports usually reached their final destination from two weeks to a month after the contracts were already signed, according to the general manager.

“This has been jeopardising the trading business of the country and resulting in contract cancellations due to delays,” he said.

On top of the time being wasted, exporters have been exposed to higher costs because of logistical inefficiencies, according to Asressa.

“The new service can reduce the challenges and improve the logistics,” he said.

The project is crucial to making the trading system smooth and efficient, according to Social Beyene, IT expert and CEO at Dastech ICT Solution, adding that the system may reduce slowdowns and costs.

But the quality and coverage of infrastructure in the country is limited and may challenge the initiative of the Commission, according to Social.

“The Commission should prepare well not to add additional burdens to the import and export trading sector,” he recommended. “It should work in cooperation with IT infrastructure agencies such as Ethio telecom to properly operate the system.”

The Commission should also raise awareness among the trading business community about using the system, urged Social.

New Law Lights up Start-up Scene

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A bill that proposes the formation of the National Start-up Council, which will be tasked with overseeing resource mobilisation for entrepreneurs and start-ups, is making headway in the drafting process.

The Start-up Business proclamation, which is being drafted by the Ministry of Innovation & Technology in collaboration with the Jobs Creation Commission for the past year, was sent to the Office of the Attorney General three weeks ago for legal review.

The Council, which will have between seven and nine members, will supervise the National  Innovation Fund and support the ecosystem for the development of innovation and the creation of jobs. The Minister of Innovation & Technology will chair the Council, while the head of the Jobs Creation Commission will serve as the secretary. Members of the Council will be nominated by the Minister and appointed by the Prime Minister.

The bill is requisite for removing the impediments to entrepreneurship by easing the procedures of establishing, running, expanding and closing down a business, according to Khalid Ahmed (PhD), advisor to the Office of Digital Transformation Programme at the Ministry.

The National Innovation Fund, which will be supervised by the Council and administered by the Ministry, will mobilise resources for the start-ups from the government, as well as loans, grants and investment from private equity groups and angel investors. The mobilised funds will be used to incentivise start-ups by covering the cost of fees for the registration of intellectual property and guarantees given to the start-ups to get funding from financial institutions.

“Providing early-stage risk capital to start-ups can unlock tech entrepreneurship,” said Kahlid. “The government can spark this model, and others can follow suit, since the country lags behind peer countries in the creation of space for innovation.”

Ethiopia is home to close to 80 start-ups, which is far behind Kenya and Rwanda. Ethiopia stood at 110 out of 137 in the ranking of the Global Entrepreneurship Index in 2018.

“This affects the perception of investors who are looking for places to put their money,” he said.

Over the past two years, start-ups raised 11 million dollars from 63 private equity companies and venture capital investors registered in the country.

A Technical Advisory Board under the Council will be formed to screen potential start-ups for funds and will forward its recommendations to the Council. The Board will have members pulled from the public and private sector upon the appointment of the Minister of Innovation & Technology. A Startup & Innovation Unit that oversees the evolution of the start-up and innovation ecosystem will also be formed.

The bill is applicable for micro, small or medium enterprises that have been operational for a period of no more than five years. These start-ups are eligible to secure a Start-Up Label or Innovative Business Lable if they have a product or service that is either innovative or disrupts the existing market structure. To secure the label, the person who developed the system or the product should own at least a quarter of the company.

To acquire the Start-up Label, the bill has set out three stages: pre-registration, registration for competence and commercial registration. The innovative business has to have a defined maximum number of employees and a minimum annual turnover rate as defined by the directive.

For the pre-registration process, the company has to fulfill the conditions set out by the bill and request pre-registration at the Ministry, which will issue a pre-registration certificate that is valid for two years. Holders of this license will be relieved from turnover, value-added and income taxes. The details of this relief will be governed by a directive to be issued by the Ministry of Revenues.

After these start-ups develop a product or service, respective government agencies have to issue a certificate of competence for the start-up that goes through the pre-registration process within a month from initiation. These start-ups should go through commercial registration to acquire a license from the Ministry of Trade & Industry two years after the pre-registration process.

Currently, start-ups are led by young people who are just full of ideas working toward making those ideas viable for the market, according to Samuel Mekonenn, CEO of Afri-tech Software Technologies, a two-year-old tech start-up engaged in developing an e-commerce platform.

“It’s a mismatch to be treated like other commercial businesses without standing on our own two feet,” he said. “The legal frameworks are losing their chains and an all-round stakeholder discussion is crucial for the development of the sector.”

Start-up and innovative businesses will be entitled to incentives for five years and three years, respectively. Start-up leave, start-up scholarships, funds to register intellectual property rights nationally and internationally, administrative legal support during registration, and support for accounting and human resources management will be provided to these businesses.

Access to finance, tax breaks, an extended tax reporting period, exemptions from employee retirement and health insurance responsibilities, guarantees to get financing support, and privileges to open foreign exchange accounts are additional incentives for these businesses, according to the bill.

The bill will also introduce ecosystem builders, such as incubators or accelerators, as recognised businesses. The country has close to 15 start-up incubators and 64 accelerators. The details of the governance of these ecosystem builders will be issued in a directive by the Ministry.

The ecosystem builders are required to obtain the business label and will be eligible to get funding and tax breaks. The bill also promises ecosystem builders operating outside of the capital to get more incentives.

Although lawmakers attempted to address many of the challenges in the start-up environment, there are some challenges that were overlooked by policymakers, according to Markos Lemma, co-founder and CEO of Ice Addis, an innovation hub and incubator that has supported 43 start-ups and gives entrepreneurship programmes yearly.

The bill lacks provisions for the closing of a business, which is a long bureaucratic process, according to Markos.

“Since start-ups are experimenting with ideas and if the market doesn’t respond to the ideas,” he said, “shutting down the business and introducing a new product is the key rebound.”

The issue of physical addresses is still not fixed – though the Ministry of Trade & Industry does not require it while the Revenues Bureau does, according to him.

“Another challenge is over-taxation on grants and funding that discourages start-ups,” Markos said. “Company valuation is based on the physical property, however, knowledge and intellectual properties aren’t valued.”

Investors that support a business that has received a start-up label will be privileged to have a tax break on capital gains, facilitation of expatriation of capital gains for foreign investors and allowing debt investments among other incentives. The Ethiopian Investment Commission might reduce the minimum investment capital set for foreign direct investment for start-ups, according to the bill.

If the government will proactively implement this, it will be revolutionary to the start-up space, according to Anteneh Tesfaye, country lead for Africa Talking to Ethiopia, a pan-African technology company that provides communication and payment solutions for developers and businesses.

The pre-requisites to be labelled a start-up should be thread carefully so as not to add another legal hurdle for start-ups, according to Anteneh, who suggests the requirements be flexible and accommodating.

“Many start-ups that were undermined at their initial stage turned out to be a surprise success,” he said. “The end goal should be to support and incentivise entrepreneurship, not to erect more obstacles in its path.”

Agencies Team up to Launch Multimedia Content

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Two federal government agencies working in the field of education have partnered on a project for the creation of digital multimedia content for higher learning institutions. The project focuses on content creation in audio, video and visual story formats.

The Ethiopian Education & Research Network along with the Federal Technical & Vocational Training Institute (TVET) have launched the pilot project. The Network is carrying out the first-round training for 22 teachers representing universities across the country and the TVET Institute.

A South African company provided initial training for four university teachers for free on Information Technology (IT) support along with instruction on how to design multimedia content. Now the teachers have continued providing training themselves.

The training had pedagogical elements, but it also focused on capturing and keeping the attention of students while creating content, according to Zelalem Assefa, director-general of the Network.

“We’re currently training future trainers,” said Zelalem, who stated that higher education institutions in the country do not have their own multimedia content. “The plan is to grow this content creation to include not only videos but augmented and simulated reality components in the long run.”

This will enable students to work with machines that are otherwise too expensive or inaccessible for practice, according to the director-general.

“It’ll also minimise the disparity between the quality of education across institutions,” he said. “Similar content will be shared among different institutions.”

The TVET Institute, which had initiated the National TVET Digital Infrastructure Reform plan, conducted a three-day course in March for its 360 academic staff across the country on how to teach online classes.

Now with the support of the German Corporation for International Cooperation (GIZ), 20 digital scouts and IT professionals are building the capacity of the TVET teachers and are aiding the creation of the multimedia content. The scouts are also working on the National Academic Digital Library, run by the Network, which has course modules and over 70,000 reference materials.

The support of the scouts will last a total of three months until the end of October, and the plan is to replace them with the Network’s own in-house IT professionals, according to Zelalem.

In addition to this, 15 e-learning agents from the TVET Institute, representing the 15 polytechnic colleges under its wing, have been selected to receive training as part of a four-year programme funded by the Finnish government for two million euros. The programme will focus on building the capacity of its staff along with procuring necessary supplies for the digital content creation.

The TVET Institute, through its mid-term plan to enhance online education through building infrastructure, has received 15 million dollars in support from the World Bank. The support is part of the 150 million dollar grant under the East African Skill for Transformation & Regional Integration, which includes Kenya and Tanzania. The Institute along with 40 of the total 80 polytechnic colleges in the country will benefit from this support.

Online content creation is a capital intensive procedure, as it requires a studio for the creation of content along with other materials, according to the Institute’s Deputy Director-General, Haftom Gebregziaber.

“The creation of the content in itself won’t be the last step,” he said. “A viable platform and infrastructure are also necessary.”

The Institute is now using the Electronic Learning Management System, an online platform designed by the Education Network for the 50 universities in the country.

The long-term plan of the TVET Institute is to create a TVET network where colleges and universities along with companies in relevant industries can interact, according to Haftom.

“This will enable sharing resources and facilitating the learning and working environment using local infrastructure,” he said.

This is a praiseworthy initiative that will be beneficial in the long run, according to Tirusew Teferra (PhD), Ethiopian Education & Training Roadmap Project Leader.

“It’s that much more important now with no clear date for the end of the pandemic,” he said. “But it has given us the opportunity to take a step back and review what our education system looks like and make appropriate changes where necessary.”

This will require training both students and teachers to have the skills and the confidence to work in this system, recommended Tirusew.

“We may also have to look at the more practical approach of blending the two types of education systems instead of going completely in one direction,” he said.

As Overall Death Rate Declines, Casket Sales Take Hit

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For at least the last four decades, a collection of shops along Churchill Avenue has been a hub for coffins, headstones, flowers, memorial ceramic urns and burial vaults. But as of two weeks ago, the place has been noticeably different.

The area located in front of the Churchill Hotel used to have over 15 casket shops. But the number was reduced by half after the shops were demolished last year to clear the area for road construction that is part of the Beautifying Sheger project.

Even with the reduced number of shops, those that remain are finding survival difficult. Negash Degefu Funeral Service is one of the businesses that remains in the area in spite of the unfavourable conditions.

Established over four decades ago, Negash Degefu Funeral Service operates three branches across the city. Along with its first branch at Churchill Avenue, it runs branches at Salitemehert, near CMC, and Petros We Paul’s, near Wingate. The store sells caskets for 1,000 to 50,000 Br depending on the types of materials the caskets are made of.

The 80-year-old Negash, who founded the business, retired three years ago, and his son Demise is currently running it. On top of his family, the father of three supports his uncles and relatives from the revenue he generates from the three stores.

Business has been good since he took over the shops from his father, but over the past couple of months the number of customers flowing to his shop has fallen sharply, according to Demise.

“Business became slower this year after Novel Coronavirus      (COVID-19) was reported in the country,” Demise said.

Many expected that the business of casket shops might see a boom after the pandemic hit the world, but that is not the case for operators in Addis Abeba.

Demise, who grew up closely following the trends of his father’s business, says that the number of deaths recorded during the summer season is higher compared to the other seasons. In line with this data, the number of caskets sold during this season is higher as well.

Between March and July last year he had been selling 50 to 60 caskets a month. But the number fell sharply this year, and his monthly sales between March and June amounted to between 15 and 30 caskets.

Dirshaye Gizaw, a 66-year-old man running a casket shop in Wingate for the past three years, also shares Demise’s experience. Dershaye, who feeds his six kids from the income he generates from his shop, was a gravedigger at Petros We Paulos Church until he opened his shop.

For the past three years, he has been selling 20 to 40 caskets a month. He sells the caskets for 700 to 2,000 Br.

However, he was able to sell just 10, 8, 7 and 15 in March, April, June and July, respectively, much lower than the figures of the previous year.

“Business is so slow, and it’s hard for me to survive,” he said.

Demise thinks that the number of deaths has shrunk this year for two major reasons. Many people are taking good care of their health and washing their hands more since the pandemic, according to him. Secondly, he mentioned the decreased number of traffic accidents following travel restrictions after the state of emergency was declared.

Data obtained from the Addis Abeba Traffic Management Office shows that the number of fatalities due to traffic accidents has fallen by 12pc over the past six months compared to the same period the previous year. In the past six months, a total of 213 deaths were registered in the capital due to traffic accidents, down from the 242 deaths that occurred last year over the same period.

Over the five months between March and July, the Addis Abeba Vital Events Registration & Information Agency recorded 1,677 deaths. The figure for the same period the previous year stands far higher at 2,692.

Anteneh Kassa, director of the Vital Information & Evidence Service at the Agency, says that the number cannot truly reflect the actual figures on the ground since people do not have a habit of registering deaths and births.

“We try to register the figures through our own effort,” he said.

Data obtained from Berhante Alem Petros We Paulos Church, one of the largest burial places in the capital with 35,000Sqm of land and hosting an average of four funerals a day, proves this point. The place is used as a burial ground for three districts Kolfe Kerano, Addis Ketema and Gullele.

Over the past six months of this year, the cemetery recorded 113 burials, a significant decline from the 141 burials that were recorded during the same period the previous year.

Gravediggers at Gullele District’s Catholic-Protestant Cemetery, where foreigners and Ethiopian Protestants and Catholics are buried, confirmed this.

Tewodros Fekadu, who has been the administrator of DTA, an association that has carried out the burials at the Cemetery for the past four years, says that the number of requests for burials fell after the pandemic was reported in the country. From March to July of the 2018/19 fiscal year, 20 to 35 funerals were recorded a month. The number has fallen to 10 to 15 this fiscal year.

“Sometimes we may not bury one person in a week,” said Tewodros.

Religious cemeteries are seeing similar trends, as is the graveyard operated by the City Administration. Bayetwar Zelaki Marfiya Cemetery of the Municipality, which gives burials to unidentified people, is one of them. The bodies are brought by city police from Alert, Menelik, St. Paul’s and Black Lion hospitals.

Tariku Gelaw, a gravedigger in the cemetery since 2015, says he has been digging 15 graves a week, but the number has recently been halved. Over the past six months, the cemetery hosted a total of 578 funerals – a sharp decline from the 856 burials of the previous year.

Bilal Shikur (MD), lead of the Addis Abeba Mortality Surveillance Programme, agrees on the basic fact that the death rate is showing a decline over the past couple of years.

Launched in 2001 with the support of the Centre for Disease Control & Prevention, the Programme aims at detecting deaths brought on by the global epidemic of HIV/AIDS. After medication for HIV became available, it continued to serve as a tool to assess its effects. Currently, the Programme collects data from 33 cemetery sites in the city and documents the number of deaths along with their causes, according to Bilal.

“Obtaining accurate data is a challenge in this country,” said Bilal. “We don’t have a strong database of births and deaths in the country.”

The Programme has been closely following the number of deaths since March when the first reported case of the Novel Coronavirus (COVID-19) was first detected in the country. It is primarily using three main methods – recording the number of deaths is the first element of the study, while collecting a verbal autopsy follows.

Days after the death of an individual, the Programme officers approach family members to inquire and record the cause of death, according to Bilal.

The third and last element involves assessing the probability of whether or not the individual passed away due to COVID-19.

“We are doing this using new software developed by the World Health Organisation,” he said. “This rapid assessment tool is not 100pc accurate, but it will show us the likelihood of the cause.”

The data needs to be carefully reviewed, according to Bilal.

“The number of deaths in the city has shown a decreasing trend in the past few years attributable to various interventions by health institutions,” he said. “What we need to look at is if it’s still decreasing at the same rate as before.”

The data until the end of May shows nothing out of the ordinary.

But with the onset of the pandemic in mid-March, this is not surprising, said Bilal, who believes the results of June and July would be more indicative.

Alemayehu Worku (PhD), an advisor for Addis Abeba University’s School of Public Health, College of Health Science, argues the opposite, saying that the number of deaths this year shows an increase after health centres closed their doors to focus on COVID-19.

Alemayehu says that the mortality rate seems to have declined due to population growth.

“People are sensitive when it comes to some issues, and death is one of them,” said Alemayehu. “They want to hear that the death rate is falling. But before reaching such a conclusion, a scientific survey is required.”