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Month: June 2021

BALLOT BATTLEGROUND

Posted on by Web Master

A voter stops by to check out results at a polling station in Arada District, Addis Abeba, where the counting of results for the national elections last week has been posted on a notice board. The verdict by voters for city council seats is marked in light blue and purple for Parliament. The result for the latter is visible – the candidate for the incumbent Prosperity Party (PP) has come out on top in this constituency.

The National Election Board is yet to formally announce results for the national elections, which it is legally obligated to do before July 1. Still, there were some surprising takeaways from polling day, including the steep losses candidates from major opposition parties such as the Ethiopian Citizens for Social Justice (Ezema), the National Movement of Amhara (NaMA) and Balderas for True Democracy seem to have suffered in the constituencies thought to be their social bases.

Most notable was voters’ turnout, in sharp contrast to what seemed to be apathy during the early registration period. Elections monitors deployed by the African Union (AU), under Nigeria’s former president Olusegun Obasanjo, declared the process and outcome of the elections as “orderly, peaceful and credible.”

The day’s protagonist was the Electoral Board, whose chief, Birtukan Midekssa, briefed the media twice on polling day. Some of the Board’s logistical and technical muddle ups have been somewhat embarrassing, especially on mixing up the ballot papers polling stations were set to receive. To the Board’s relief, these have been deemed “understandable” by the African Union observer mission.

The west was not impressed. The EU, UK and Canada have issued a joint statement calling the sixth national elections “not inclusive.” The United States called it “not free or fair to all Ethiopians.”

The volatile parts of the country were excluded from taking part in the elections – a majority of them expected to vote later on September 6 – and even then, there were incidents, including the killing of three individuals at a polling station in Ambo town, Oromia Regional State.

While noting that the Electoral Board has gained more autonomy, Ethiopia’s development partners have continued to call out that the political conditions under which Ethiopians went to vote were dire and that an election alone would not address it. As the Electoral Board was counting the votes, reports came of an airstrike at a marketplace near Meqelle, capital of Tigray Regional State, that took the lives of over 60 people – a sullen reminder that the battle for the soul of the country is not only fought through the ballot box but the bullet as well.

National Elections Show Voters May Not Be as Polarized as Elites Have

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Empty streets could characterise polling day on June 21, where apprehension to what the day might have brought was feared. Where there were polling stations, long lines of people waiting to cast their ballots, in some cases up to five hours, were observed. Such electoral enthusiasm was not seen since the 2005 elections, the most contested in the country’s political history.

Last week was a calm day, with high voters` turnout. The end of the day was greeted with relief as there were no major security issues, probably because the most volatile places and areas such as the Tigray Regional State, which is under a state of war, did not get to vote.

The sharp contrast in Tigray and much of the country shows Ethiopia has become a battleground where forces wage their fights both in ballots and bullets.

Close to 40 million voters were registered and voted in droves. Poll monitors from the African Union (AU), under the stewardship of Olusegun Obasanjo, former president of Nigeria, described the process as “orderly and peaceful.” Yet, the war in Tigray resurged, with mounting civilian casualties reported, recently an airstrike befallen on a rural market, according to several accounts of the international media. Civilians were the victims.

On polling date, three people – including a police officer and a militiaman – were killed near Ambo town of the Oromia Regional State. Fighting among individuals in relations to the election was also reported in the Amhara Regional State, marking that the day was not, after all, an uneventful day. Election observers and opposition parties have reported irregularities, including not having their representatives allowed to enter certain polling stations, especially in the Amhara and Southern regions. Electoral officials have condemned this promptly.

It was also evident from the day the importance of institutional capacity and experience in carrying out massive national enterprise such as elections. For all of the funding and the resources of which the Election Board boasted – 2.5 billion Br already disbursed and nearly a quarter of a million poll workers – some of the logistical and technical hiccups were embarrassing. A major cause of foundering was the muddle up in the Sidama Regional State, which the Board could not rectify that very day. As a result, 19 constituencies were made to vote the following day instead.

The Electoral Board was still counting and aggregating votes late last week. How many of the registered voters have turned out to cast their ballots is yet to be disclosed. But electoral authorities, parties` leaders and observers were impressed by the turnout, where lines had formed in many places hours before voting began. Slow management of the voting process by poll workers may have exasperated this, but it should be acknowledged that many voters braved the rain and the chill through to midnight and voted. They believed their votes would certainly count.

The results are yet to be made public by electoral officials. Nonetheless, several contesting parties have already made public statements conceding defeat to the incumbent, the Prosperity Party (PP).

Most voters interviewed had security in their mind when they voted. Many of them said they want to see their country peaceful; they seem to prioritise the need for autonomous peace.

This is hardly surprising considering the militarized conflict in Tigray and the growing insurgency in western Oromia, where security concerns made electoral officials postpone polls in many of the 102 constituencies where elections did not occur last week. Indeed, it would have taken a cynic of a special breed to have foreseen Ethiopia in the months after the coming into office of Prime Minister Abiy Ahmed (PhD) and predicted nearly every section of society would be affected by displacement, carnage, or war within a few years.

Popular anxiety and the longing for security factored in many voters’ decisions on which party to vote for.

It could be the same fear that turned the days leading up to the elections, and those after it, to be anticipated with trepidation. Fear, either perceived or justified – and very much justified in Ethiopia’s case – is a powerful political motivator. It could have been fear that has elicited voters to go out in large numbers and voted for a political force they put their faith in to end the nightmares. They seem to have voted with the hope to avoid violence and disenchantment of a broken country.

In that, voters have demonstrated how they are not, after all, as polarised as the elites could imagine. For all the polarisation of the elite, it is a collective cry for peace and enhanced welfare that emerged as an important message from the elections last week. It is a call for the government to be formed come October to realise that voters want a life of hope and dignity. Against all the odds, these can be delivered if there is political will and courage.

The outcome of this election can be read (or misread) as a popular endorsement of the current unfolding. Considering electoral officials will come out to affirm what the contesting parties have already conceded, the incumbent may continue onto holding the legislative houses in the federal parliament and regional states where elections were held. It will be a historical mistake to take voters` desperation for peace and security as a ticket for doubling down in the militarisation path.

An American historian, Charles Tilly, has coined the popular adage, “war made the state and the state made war.” It will be regrettable if those holding state power believe the state secures its existence by only making wars. A nation where a part of it continues to bleed in violent conflicts can never find peace with itself. Failure to realise this is vanity, and as the Dutch would say, “it is a vanity that blinds us to our blindness.”

Voters` enthusiasm can also be read (correctly) as a trust put on the leaders to ensure peace and stability by having the courage to travel the road never taken before. The popular mandate given last week can be seen as a latitude voters gave to change the cycle that the victors take all, and the vanquished lose everything. An electoral race should not be seen as an endorsement to take the country into whatever direction the victors see it fit but an opportunity to use the trust placed on them by the public to secure political compromises and settlement.

There is the long-neglected need for all-inclusive negotiations to reach political settlements with and between social and political forces. Inclusive should be all as long as they are committed not to violence to advance political agendas and accept the existing constitutional order as a starting point.

The observers from the AU called the elections “credible”. Ethiopia`s development partners – the EU, the UK and Canada – chose to have a nuanced approach. In a statement they issued late last week, they praise progress made in reforming the electoral laws and the autonomy granted to the board. They complemented the broadened space for political parties, civil societies and the media. But they have also acknowledged the difficult context in which the elections were held: boycott by opposition parties whose leaders are under arrest and their members jailed, violent conflicts in many places causing the displacement of millions, and fewer women run as candidates than in previous elections.

They have also called for “honest reflections,” emphasising that “elections alone cannot bring democratic transition or resolve the political problems.” They have urged for a “meaningful, broad-based national dialogue process takes place and to commit to peaceful solutions.”

It would be helpful for Ethiopia to listen to its partners who have been there during its trying times. The call for peace, dialogue and peaceful resolution of conflicts should not be ignored.

In the Shadow of War, Voters Give Electoral Verdict

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This past Monday was the second time Belay Zerihun, a second-time voter, has had to stand in a long queue over the past couple of months. The first time was in early May when he went to get his voter ID card during the extended registration period. He recalled standing for hours in line. On the morning of June 21, 2021, he arrived at Polling Station 34 of Nefas Silk Lafto District, in the neighbourhood known as Haile Garment, to cast his ballot in the sixth national elections after the current constitutional order was installed in the mid-1990s.

The lines were so long that he and many voters could not see the stations from where they stood.

Long queues were seen stretching out from polling stations all over Addis Abeba and the rest of the country, and Belay was lined up to vote outside a premise that incorporated no less than three separate polling stations. Each was designed by the National Election Board of Ethiopia (NEBE) to accommodate up to 1,500 voters.

Belay endured, cast his ballot despite aching legs and heavy rainfall, and managed to make it home by 5pm, eight hours later.

The long queues were indicative of a strong voter turnout and evidence of a public determined to have their voices heard. However, there were also other reasons for the lines too.

Belay saw the process hampered as only one poll worker was in charge of cross-checking names from the station’s registry, an exercise that slowed things down. Perhaps unsurprisingly, a lack of poll workers was just one among a series of setbacks faced by the electoral on election day. In the week leading up to the polling date, the Board had trained 244,000 poll workers to be deployed in groups of five to the 48,000 stations across the country but Tigray, Somali and Harari regional states. Attributed to technical glitches and insecurities, these are some of the 102 constituencies where the Board found it impossible to conduct elections last week.

Where it did, some of the poll workers failed to show up to their assigned stations. Voting had to go on nonetheless, under-staffed.

The majority of polling stations were operating under capacity, in some cases even having to seek assistance from observers representing civil society organisations. The African Union Election Observation Mission, which testified the elections to be “orderly, peaceful and credible”, noted similar issues. Of the 22 stations it monitored, 13 were opened late due to tardiness from poll workers and delays in the deliveries of election materials. Of the 249 stations the Mission visited over the course of the day, 80pc had long queues.

Electoral officials were compelled to push polls closing hours to 9pm. Yet, a significant number of polls in the capital were still seeing long queues. In some cases, such as a polling station in Nifas Silk Lafto District, the last voters were around as late as 11pm. Others had voters pouring in until after midnight.

Voters in some areas had to wait for the following day to cast their ballots. Nineteen constituencies in Sidama Regional State were made to vote on Tuesday after electoral officials went short of ballot papers. The same was true for voters in Gambella Regional State.

In three constituencies of the Amhara Regional State, including Dembiya, voting was called off entirely after ballot boxes were found opened the day before the polling date. Officials at the Board have since announced that elections there will be held on September 6, 2021, along with 69 other constituencies.

Despite widespread apprehension before the polling date, the elections last week went largely peaceful (where they took place) and were marked by a high turnout of the nearly 40 million voters registered. Redwan Hussien, state minister for Foreign Affairs, described the elections on his social media posting as a “spectacular” event “except few and understandable technical glitches.”

These exceptions include the killing of a security officers in in Dembiya Wereda,central Gonder. Mekuanint Mekete, head of the electoral board in the Amhara regional office, was unable to provide details on the killing, for he had yet to receive a full report on the incident.

In the Hamer area of the Southern regional state, a representative of the Hibir Ethiopia Democratic Party (Hibir) was found beaten to death in the aftermath of the polling date.

“We’ve reported the incident to security officials in the region,” said Girma Bekele, leader of the party, who has a history of political activism in the region for nearly three decades. “We’re following the developments.”

Security concerns were so alarming, four percent of the polling stations 2,200 monitors from the Coalition of Ethiopian Civil Society Organisations for Election (CECOE) had visited were inside police stations, army barracks, and the premises of political party offices. The Coalition has deployed 3,000 monitors across the country, the largest contingent of poll observers from the African Union and the East African Joint Force. Leaders of the Coalition disclosed their monitors encountered campaigning in and around 12pc of the polling stations, contrary to the Board’s regulations. They have also observed at least 86 incidents where individuals unauthorised were present in polling stations and alleged that 10pc of the booths were not sufficiently secretive. Unauthorised interventions were seen in one percent of the stations where monitors visited during ballot counting, according to the Coalition.

Contending political parties, too, remained watchful of the electoral process, collecting complaints from their own representatives in the field.

Abebe Akalu is secretary of the Ethiopians for Citizenship & Social Justice (EZEMA), an opposition that had fielded the second largest candidates of the 9,300 who battled on the electoral front last week. His party has lodged 410 complaints before the electoral board, claiming some of its 1,540 candidates were affected.

“If the issues reported to the Board are not addressed, we’ll turn to the law,” Abebe said at a press briefing EZEMA leaders gave two days following the polls.

Some of these complaints have to do with the vote-counting and allegations that some polling stations were providing voters with ballot papers on which the photos and names of candidates were not visible, according to Yeshiwas Assefa, chairman of EZEMA.

“These elections are part of the country’s transformation, not the end,” Yeshiwas said, commenting on the elections in general.

For Ethiopia’s development partners, including the United States, European Union, United Kingdom and Canada, elections on their own cannot transform the country’s politics or resolve the challenges it faces. A full-blown civil war is underway in the Tigray Regional State, and five regional states are under the spell of instability, including a growing insurgency in western Wellega of the Oromia Regional State. Two main opposition parties—the Oromo Federalist Congress (OFC) and the Oromo Liberation Front (OLF)—have boycotted the elections after their leaders, Jawar Mohammed and Bekele Gerba, were jailed, offices shut down, and many in their rank and file incarcerated. Although unhindered from taking part in the elections, the opposition Balderas has its leaders, including Eskinder Nega, remain under custody battling charges of alleged involvement in terrorism.

This irksome context prompted development partners, some of which declined to send election monitors, to issue a series of sobering statements in the aftermath of the elections. They called the elections neither free nor fair for all Ethiopians.

The elections took place “against a backdrop of grave instability,” said Antony Blinken, secretary of state, in a statement he issued four days after Ethiopia’s poll. They urged Ethiopian politicians for post-election political dialogue and national reconciliation, a call that angered Addis Abeba that saw in the “entities other than Ethiopians . . . weeping and gnashing of teeth.”

“It’s not fair to unwarranted second-guess us and then to fetch for fig leaves to make-up for such fumblings,” said Redwan, who sounded irritated that the west failed to comment what should be commendable. “We still learn. It’s still work in progress.”

The dissatisfaction is, however, echoed from within, too.

Andualem Arage, deputy leader of EZEMA, pointed his fingers at the regional security forces for allegedly preventing his party cadres from campaigning. He lashed at the incumbent, Prosperity Party (PP), condemning it for “running alone” in the country’s largest region, Oromia, which takes 178 of the 547 seats in the federal assembly.

These were part of the many irregularities pundits like Adem Kassie say diminished the national elections’ integrity last week. An election and constitutional governance expert currently working as a program officer for the International Institute for Democracy and Electoral Assistance, Adem believes the major hiccups are the exclusion of Tigray and the absence of strong opposition parties in Oromia Regional State.

Hibir Ethiopia avoided fielding candidates in Oromia and Benishangul-Gumuz regional states, dismayed by “a lack of a free political space,” said Girma. It had 258 registered candidates, which falls short of the 278 seats a political party needs to form a government.

Girma’s party was dispirited in seeing reports of irregular voter registration in some parts of the country, such as the Somali Regional State, and the opening of 76 polling stations without the Board’s knowledge. Poor preparedness by poll workers was also a source of chagrin for the party.

Nonetheless, for many voters who spoke to the media, peace and security remained their deepest concern. The 40-year-old mother of two, Aynaddis Tigabu, a resident of Gonder city in Amhara Regional State, was one of these voters. Exiting a polling station in Kebele 17 of Zoble District, Aynaddis was comforted the day came to pass peacefully.

“Despite fears by many, it was a peaceful day,” Aynaddis said.

Ballot counting in most places, including where Aynaddis lives, began immediately after polling was closed. The Board initially anticipated announcing preliminary results within five to 10 days of the elections. Although there seems to be a delay, results from individual polling stations have steadily been posted since Tuesday morning. Yet to be certified by the electoral officials, random results and earlier concession by opposition candidates indicate that the incumbent Prosperity Party has little to be unhappy about.

In polling stations 10 and 11 of Qirqos District (Constituency 18), Zadig Abraha of the incumbent party has carried 1,144 of 1,718 votes cast. Chair of the election committee of his party, Zadig enjoyed a landslide victory over his contenders Wondwosen Teshome of EZEMA (110 votes) and Solomon Gezahegn of Balderas, who trailed with 153 votes.

The shock for the opposition camp came in the way of the electoral defeat Berhanu Nega (Prof.) suffered at the hands of the incumbent fielded to claim a seat in Nefas Silk Lafto District (Constituency 23). At Jegema Kello Station, head of the city’s education bureau, Dilamo Otore of Prosperity Party garnered 506 votes against Berhanu of EZEMA, who got 365 votes of 1,137 registered. The latter is a household name for a rollercoaster political career since the 1970s student movement era.

No less was jarring the electoral loss of Andualem Aragie, a political dissident who spent over 3,000 days in prison under the EPRDF regime. Running against Sintayehu W. Michael of Prosperity Party in Kebele 6 of Arada District (Constituency 12/13), Andualem received 181 fewer votes than the 581 votes his contender has secured at Polling Station 11.

The outcome of the national elections is yet to be disclosed by electoral officials. Voters like Belay are keeping an eye on the results from their own constituencies. Although some are early on concluding the outcome, the Board is legally bound to announce preliminary results by July 1, 2021.

Adem, the constitutional expert, has observed a tendency on the side of political parties to view the election’s outcome with all its mishaps. Whatever the results might show, there are issues to be addressed, he says.

“Elections are important, but they don’t address the political differences amongst the people,” he stated.

When parliament opens in the first week of October, voters in Tigray Regional State will not be represented with elected legislators meant to take the 38 seats in the federal assembly. A difficult situation in the regional state took a dark turn just days after many parts of the country went to the polls as reports of an airstrike hit a marketplace near Meqelle, causing the death of over 60 people and injuries in the hundreds. It is a grim reminder that the country needs healing, experts say.

The only viable option at this point is to have a national dialogue among disputing parties to reach shared understanding, remarked Adem, echoing what western countries urge Ethiopians to do.

“We call on the government and all stakeholders in Ethiopian society to ensure that a meaningful, broad-based national dialogue process takes place and to commit to peaceful solutions,” says a statement issued by the EU, UK and Canada last week. “This is needed to enable Ethiopia’s democratic development and to reduce conflict across the country, including a political resolution of the situation in Tigray.”

Authorities Change Ownership Rules, Lower Capital Requirements for Contractors

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A new directive governing the construction industry introduces a series of changes, with its authors convinced they have to battle unprofessionalism and growing risk in the sector. Leaders of the industry lobby group are not pleased with the changes in store for their industry.

Authorities regulating the industry believe the existing directive focuses mainly on machinery and equipment rather than the management and employees of the construction firms. The new directive significantly lowers the numbers of machinery contractors are required to own. More than 100 companies offer construction machinery rental services.

“Most construction companies are led by non-professionals, affecting the sector,” Tewdros Tegege, head of the Construction Industry Reform Office, told Fortune.

Drafted by experts working for the Office under the Ministry of Urban Development & Construction (MoUDC), the directive seeks to limit the equity share a Chief Executive Officer (CEO) can have in a construction firm to no more than 20pc. It will also lower the capital requirement and narrow the grading system for contractors operating in an industry growing by an average of 15pc over a decade, higher than any other sector in the economy. The construction industry accounts for 21pc of the country’s GDP, and remains one of the largest employers.

Tewodros Shimeles, CEO of TABU Construction Plc, in business for a decade, appreciated the changes, convinced that the limit on the ownership of construction firms will prevent just anybody from joining the sector.

“It’ll professionalise the industry,” he told Fortune.

The directive, set to be enforced next year, has scrapped the categories of grades eight to 10 and obligates the general managers of construction firms classified between grades two and seven to own no more than a fifth of the company’s shares.

The directive also features new stipulations about the number of junior employees a contractor is obligated to hire, aiming to open job opportunities up to entry-level construction professionals.

Abebe Dinku (PhD), professor of civil engineering at the Addis Abeba University Institute of Technology, sees the rules about ownership somewhat positively but believes there are better alternatives out there. He cautions authorities the new directive might lead to disputes down the path. Abebe has urged the authorities to focus on performance-based enforcement that would offer general managers incentives and bonuses based on the companies` performance rather than shares.

The directive will also lower the annual turnover requirements for all but grade one construction companies active and entering the industry, expected to register over 350 million Br to get a license. A grade-two contractor was previously required to register a turnover of over 350 million Br, but that has now reduced by 50 million Br, while the requirements for grades three and four contractors lowered to 140 million Br and 70 million Br, respectively. The requirements for grade five and six contractors have more than halved to just 50 million Br and 20 million Br, correspondingly.

There is no financial requirement for grade seven contractors, requiring three civil engineers to get licensed.

Unlike some of the individuals in the industry, the Construction Contractors Association of Ethiopia opposes the changes made in the new directive. Its leaders argue that the changes in store do not consider the existing predicament of the industry and blame the officials for not allowing “sufficient discussions” with the industry leaders.

Girma Habtemariam, president of the Association, is concerned that a dearth of projects was suspended due to COVID-19, affecting contractors and left them out of work. He also objected to the new machinery and equipment quotas, claiming that this will discourage growth and foster dependency on rental companies.

Abdi Fekadu, CEO of Haverim Construction & General Contractor, operating since 2008, thinks that instead of lowering requirements on the number of machinery, the authorities should enable contractors to import the equipment duty-free.

Wheat Procurement Hits a Snag, Yet Again

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Authorities at the federal government were forced to cancel an international bid to buy wheat deemed crucial to stabilise the market and provide welfare to low-income groups.

The only bidder that offered prices to supply 400,000tn of wheat, Promising International, has failed to meet a technical requirement. Another bid for a similar volume, floated by the United Nations Office for Project Services (UNOPS) earlier this month, had also been scrapped due to what insiders say is a “shift in priorities,” although it was re-floated earlier this week.

A major setback for the authorities, the latest failure to ensure timely supplies of wheat undermines efforts to meet the growing demand due to a surge in the number of people who need emergency humanitarian assistance, people following the case fear. As many as 23.8 million people across Ethiopia will require emergency humanitarian assistance through September this year, according to an estimate made by USAID.

The first bid was floated in March this year as part of a special procurement move to buy wheat, rice and sugar. Only one company of the 57 interested bidders, Promising International, responded as the requirements include an agreement by the supplier to repatriate the revenues from the sales between two and five years. A committee comprising officials from the ministries of Trade & Industry and Finance, the Ethiopian Trading Businesses Corporation, and Public Procurement & Property Disposal Service (PPPDS) was formed to follow up the procurement process.

“The tender has been cancelled as the bidders didn’t meet the technical criteria,” said Tsewaye Muluneh, director-general of the Public Procurement & Property Disposal Services (PPPDS).

A technical mishap from Promising International was partly to blame for the cancellation of the bid. A bank guarantee for half a million Birr, which should have been enclosed with financial documents, was mistakenly enclosed in the technical document, said Habtamu Million, a local representative of the Dubai-based trading house.

Promising International has a long history of disputes with Ethiopian authorities over unsuccessful bids floated to buy wheat.

Officials from the Ministry of Trade & Industry did not respond to questions about what is to come next in the procurement process, despite repeated attempts from Fortune.

Last month, a contract for the procurement of 30,000tn of wheat (estimated to cost almost half a billion Birr) for the safety net programme funded by the World Bank was awarded to Promising International.

“We’ll proceed with the procurement based on directions provided by the Ministry of Trade,” Tsewaye told Fortune.

Another international bid for 400,000tn of wheat issued by UNOPS on June 7 was scrapped. Floated in two slots of 200,000tn of wheat each, the selected bidder would have entered into a commitment to deliver the commodity within three months.

“The grain is needed urgently,” responded the Office to bidders urging an extension of the deadline set for June 11. “Bidders were requested to submit their offer by the closing date and time.”

The Office attributed the cancellation to “a change in the specification and scope of the requirement.” However, the cancellation was due to a shift in priorities, according to sources. The bid was refloated on June 22.

Delays in procurements are occurring during the rainy season when farmers do not harvest wheat, and as domestic stock will be depleted, a shortage of wheat will be prevalent, especially in urban areas, according to Messay Mulugeta (PhD), a food security expert.

“There’s a significant shortage,” said Messay.

Ethiopia imports close to 30pc of the four million tonnes of wheat consumed annually. In the last year alone, the federal government imported 1.7 million tonnes, excluding aid.

Corporation Receives Record-High Offers for Commercial Spaces

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The Federal Housing Corporation (FHC) has received a record-high offer for a commercial space up for rent last month, in the Merkato area.

The 4,828 Br offer for a square meter made by prospective tenants is almost 1,000 Br higher than the highest offer made so far and 230 Br more than the offer given by the forerunner for the same store. The offer was made by a businessperson, Mulubirhan Mesfin, who submitted a bid of 301,000 Br to rent a 62sqm store situated around the Anwar Mosque area in Mercato.

The Corporation put up 105 stores for rent in May this year in five lots. Sprawled on 8,918qm of land, the stores are located in seven districts and were built during the five-year Italian occupation period. Later nationalised by the military government, they have remained under the ownership of the state. The Corporation manages 18,153 units in Addis Abeba and Dire Dawa, of which 37pc are rented to businesses.

The interest for these outlets in Merkato was high, considering the 1,302 bidders which placed offers for 65 stores. With an average of 1,745 Br a square metre, these offers are over 10 times higher than the lowest submitted by a bidder for a store in Sefere Selam, Addis Ketema District.

This interest was not matched for outlets located around the Tor Hailoch and Aba Koran areas. Almost no bidders were seen for the 40 stores up for rent. The stores were reclaimed from businesses that had transferred their rights to a third party and those unable to pay rent arrears, according to Kibrom Gebremedhin, communications director of the Corporation, a state enterprise with a 1.8 billion Br in annual revenues.

Amanuel Mengistu is among the businesspersons interested in renting a store located near Cinema Empire in Piassa. He found the offers from other bidders exaggerated.

“My family pays 550 Br a square metre for a store located at Amde Gebeya,” he said of a place in Merkato. “The highest offer given during the latest bid is very unrealistic. Paying as high as a quarter of a million monthly rent for a 62sqm at a time when there is a business slowdown and unpredictable economic environment is not rational.”

Wubishet Abera, a consultant in property management, agrees.

“Even in prime locations found in Bole, a store is rented for as high as 1,500 Br a square-metre,” Wubishet told Fortune. “Such an offer may also encourage private property owners to adjust their rents, thereby fuel the inflationary pressure.”

CBE Offers Alliance Transport Buses to Bidders

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Three dozen buses formerly belonging to Alliance Transport Services S.C. have been put up for auction by the state-owned Commercial Bank of Ethiopia (CBE). The eight-year-old company defaulted on its debt and pushed the CBE to foreclose on the buses, which have been idle for over a year and a half.

The company acquired the Chinese assembled SunLong brand buses, with the capacity to seat 34 passengers, in 2016. They are now up in the auction block for a floor price of 680,000 Br

Of the 125 buses Alliance formerly owned, 100 were acquired around five years ago at the cost of nine million dollars, 70pc of which was borrowed from the CBE. The remaining buses were bought with advanced capital from the company’s 2,500 shareholders.

Alliance, whose founding CEO was Birrenesh Abay, eventually failed to service its debts, leading the CBE to take possession of 100 buses a year and a half ago. Another 25 buses, acquired with a loan secured from Dashen Bank, have already stopped working due to deterioration.

Adil Abdela, board chairperson of Alliance since its establishment, blames political and civil unrest in 2016 and 2017 in the suburbs of Addis Abeba and neighbouring areas, such as Burayu, Sululta, Lege Tafo and Sebeta, for his company’s woes. His company had communicated its concerns to the CBE’s management, requesting a grace period to service the loans. With the CBE management passing the issue to the Board, Alliance appealed to the prime minister’s office for help.

“Our buses mostly used to connect Addis Abeba with the neighbouring cities,” said Adil. “We had to stop during these times of protests. We then were forced to default on payments for some months, which the [Bank’s] previous management could not accept.”

The bid will stay open until Tuesday.

The Bank has a different version of what transpired in the loan portfolio of Alliance Transport. Not only was the case not brought to the attention of the Board, but there was also no record of a request the management made to the CBE, says Yeabsira Kebede, corporate communications director at the CBE. Foreclosing on the buses was the final step the CBE took after Alliance had failed to respond to repeated notice the CBE, the Director told Fortune.

The company ran into trouble servicing its loans even before the protests cited by Adil as the root of Alliance’s problems, according to Yeabsira.

This is not the first time the Bank has tried to sell off Alliance’s buses—previous efforts hit a dead end after bidders offered below the threshold amount. The Bank has only been able to sell three buses that were auctioned off through a bid announced a year ago.

The buses could not attract buyers because they were not parked in “a good place initially,” and exposed to damage before they were eventually moved to better-suited areas, Adil alleged.

“It’s been a year and a half since the buses stopped working. They could be used for the service even though they are under CBE’s administration,” Adil told Fortune.

The buses have been parked at CBE’s vehicle storage facility in Qality.

The CBE could have used the buses to generate revenue and provide public service had it let them continue to be in service instead of letting them stand idly, says Birhanu Zeleke (PhD), a transport management expert teaching at Kotebe Metropolitan University. He sees the country’s transportation issues as a failure of an administrative system.

City Bus Enterprise to Get Buses Worth $20m

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The city bus company is to acquire 100 low-entry buses, spending close to 20 million dollars through loans obtained from the World Bank.

Low-entry buses are vehicles with a floor closer to the ground, making them convenient to board, particularly for the elderly and physically challenged commuters.

The Addis Abeba City Roads Authority (AACRA) floated the international bid last week, inviting both domestic and international suppliers, on behalf of the Anbessa City Bus Enterprise, one of the oldest public companies.

Under the city administration, the company runs a fleet size of 650 buses, serving an estimated 650,000 commuters daily. Anbessa has previously been sourcing buses from the Bishoftu Automotive Engineering Industry (BAEI), established in 1999 under the former Metals & Engineering Corporation (MetEC), now Power Engineering Corporation (PEC), which registered a turnover of over one billion Birr last year. Bishoftu Automotive had received its last order from Anbessa two years ago for 191 low-entry buses, 180 of which are currently operating.

The bidding requirement, however, is too stringent for domestic companies to bid. They will have to show an annual turnover of 20 million dollars and a record of half a decade without registering losses in the automotive industry. Expected to have a minimum of seven years of experience in low-entry manufacturing, it is only Bishoftu that can meet the requirement among domestic assemblers. CEO of Bishoftu, Negesse Chane, declined to comment, for a decision has not been made on whether to participate.

Local assemblers are encouraged to apply if they meet the requirements, according to an official close to the matter.

The bid was floated after a team of experts from the City Roads Authority, Anbessa Bus, and the Planning & Development Commission, and others, carried out a six-month feasibility study. Two companies have responded, buying bid documents priced at 4,000 Br apiece, sources disclosed.

The buses the Enterprise hopes to get will have a 40-seat capacity, three more seats than those in its fleet.

“We hope the new buses will ease services for the elderly and the disabled,” said Behailu Gebreyesus, a project implementation manager of the World Bank’s Transport System Improvement Project.

The project Behailu manages is part of a 300 million dollar program launched in 2016, with the ambition to improve mobility along selected corridors in Addis Abeba and the effectiveness of road safety compliance systems.

“The procurement process may take up to a year,” Behailu told Fortune.

The Enterprise is under pressure to serve surging demand from a growing population. There are 125 routes it covers, in addition to the two public enterprises, Sheger and Public Transport. Sheger serves over 229,000 passengers daily with 289 buses, and the Public Transport Enterprise caters for over 60,000 passengers with a fleet of 254 buses.

The unavailability of spare parts during servicing of the buses remains the major issue for these companies as 50 of the buses under the Anbessa City Bus are parked idle for lack of parts. Skilled and experienced labour should also be given attention, according to Murad Kebebe, an automotive expert and host of the Automotive Journal radio show on Ahadu Radio.

“Buses that come from reputable companies abroad have quality,” said Murad. “But, servicing them requires skill, and that could prove difficult to come by.”

The Transport System Improvement Project under the World Bank incorporates a separate bid for the procurement of workshop maintenance machinery. Bidders are expected to have an annual turnover of 15 million dollars to participate in this tender.

Gov’t Gears Up to Upgrade Tax Management Systems

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The federal government gears up to replace the tax administration system in use for two decades, with tax authorities hoping the new system will ease taxpayers’s burden and allow greater transparency.

Estimated to cost 60 million dollars, the Integrated Tax Administration System (ITAS) implementation, a solution to automate tax collections, is a part of a tax transformation programme launched in 2017 in a partnership between Ethiopia and the United Kingdom. A Tax Transformation Office established under the Ministry of Revenues has been working on the Programme, which will eventually allow taxpayers to settle payments online.

The current system, dubbed Standard Integrated Government Tax Administration System (SIGTAS), is not integrated with other government offices.

The tax regime is one of the areas that impact Ethiopia’s score in the World Bank’s index for ease of doing business. Ethiopia ranks 159th from 190 countries listed in the World Bank’s latest Ease of Doing Business report.

Experts aspire to see the new system establish a single window through which businesses comply with regulations, including obtaining tax identification numbers and business registration certificates.

“We reviewed the systems of over 30 countries before deciding to change,” Addis Tamire (MD), head of the Office, told Fortune.

A country that has successfully implemented such a system is Nigeria, where the solution helped reduce costs associated with tax collections and enable real-time tracking of invoices. It is also expected to integrate regional revenue bureaus using different tax collection systems, which experts hope will improve the efficacy of the country’s revenues collection.

“The outdated tax system must be replaced to generate more revenues,” said Dawit Tadesse, assistant professor of accounting and finance at St. Mary College for eight years.

The federal government collects tax revenues lower than the targeted 15pc of GDP.

Dawit hopes to see the new system improve the government revenues’ ratio to the GDP, which has been at an average of 11pc.

“An efficient tax administration should invest at least two percent of the revenue collected,” said Dawit, a managing partner at Lead Plus Consultancy, a firm that provides tax advisory services. “In Ethiopia, it is way less than one percent.”

The work of transitioning to the new system is not easy, and the Office will likely face financial, infrastructural and skill-related constraints during implementation. The project is still awaiting budget approval from the government, as well as funding from international partners.

“Implementing the new system might take a while as we are working on other procedures in advance,” said Lake Ayalew, minister of Revenues.

Addis disclosed to Fortunethat the process to hire a technology partner is under preparation, and authorities expect to issue tenders in the coming six months.

Unidentified Camel Disease Poses Threats to Economies in Eastern Ethiopia

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Over 1,000 camels have succumbed to an unidentified disease in Somali and Oromia regional states beginning last month. The disease also affected people who consume camel meat and milk in the affected areas of the two regions, authorities at the Ethiopian Public Health Institute disclosed.

Fears are growing the disease, and the increasing loss of cattle population poses a threat to the economies of these pastoralist areas of the country where more than 80pc of the camel population is found.

About 40 people in Somali and 158 in Oromia have contracted the disease from the camels either through prolonged contact or consumption of meat or milk, revealed a new report published by the World Health Organization (WHO) earlier this week. No human casualties have been reported thus far, while 35 of the 40 people hospitalised in the Somali region were discharged. Symptoms in humans include diarrhoea, fever, and vomiting.

“Although the people have been affected by the disease, no one has died,” Yimer Mulugeta (DVM), director of bacterial parasitic and zoonotic research at the Institute, confirmed to Fortune.

The disease first surfaced in late May in the Rayitu and Legeda weredas of Bale Zone in Oromia Regional State. It has since spread to the Afder Zone and Kibir Baya and Babile weredas of the Somali Regional State. Officials at the Institute reported that the disease has different variants from those observed in the past, including trypanosomosis, sleep-sickness most prevalent camel disease in Ethiopia, affecting three percent of herds.

The unidentified disease mainly affects adult, pregnant and lactating camels, with those infected showing symptoms such as bleeding from the mouth and nose, high fever, watery eyes, and difficulty breathing. Once infected, a camel has a high chance of succumbing to the disease within 48 hours, according to Mohammed Mahmmud (DVM), animal health director in the Regional State.

The disease has killed around more than 4,400 camels in Afder Zone, where an estimated 650,000 camel are found, disclosed regional authorities. This is a number far higher than officials at the Ethiopian Public Health Institute reported. According to the Institute, about 500 camels died in the Somali state, while the disease claimed the lives of 800 camels in Oromia.

A group of researchers from the Ministry of Agriculture, National Veterinary Institute, and EPHI have been dispatched to the affected areas to conduct investigative research, provide antibiotics, and create awareness among the residents there.

“Laboratory examinations are carried out at EPHI,” said Wubshet Zewude (DVM), director of disease prevention and control at the Ministry of Agriculture.

He conceded that there had been little progress made except for identifying the cause of the disease as a bacterial infection.

In general, diseases affecting camels and animals are understudied and unidentified due to shortages of adequate laboratories, experts in the sector say. Although agreements to work with countries like Saudi Arabia and China for veterinary health made, they are yet to be implemented.

There aren’t trained professionals who are tasked with investigating the outbreak of animal diseases in a continuous manner, according to Demeke Wondimagegn (DVM), a veteranarian with over a decade of experiance.

“It would not be difficult to identify the outbreaks and provide immediate response had the government encouraged the deployment of trained vets close to where the cattle population is found,” said Demeke.

New Commercial Code ‘Freezes Out’ Modern Safeguards for Minority Shareholders

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Majority rule is the cardinal principle of business law, whereby most shareholders take the decision-making power in a company. Why should business organisations operate with the principle of majority shareholders rule?

There are two theories. One is a hangover from political democracy, where any shareholder should only have one vote a share and everyone needs to have a say in the management of a company. In economics, majority rule is justified for the company’s effective operation, where rules and regulations are put together to ensure that the view of the majority of owners of a firm is respected.

Minority shareholders are those that own less than half of the total share outstanding and thus cannot control the corporation’s management or singlehandedly elect directors. The critical element here is effective control, the meaning of which is country-specific. But there are some yardsticks we can use to identify it: if a shareholder owns more than a certain level of voting shares issued; at least half of the directors are appointed by the shareholder and if a shareholder, either through related parties or directly, has a dominating control over corporate strategy outcomes.

There are instances in which the interest of minority and majority shareholders can conflict. In such cases, the latter may attempt to manipulate the company structure for their benefit at the expense of the former. As a result, minority shareholders are vulnerable to exploitation in the absence of adequate legal protection. This exploitation may take various forms: asset misuse, transfer pricing, profit allocation and acquisition of other business organisation that majority shareholders own. The law needs to protect minority shareholders.

One of the primary protections for such shareholders is the right to call up a general meeting, which plays an important role in the company’s direction. It is also one of the most substantive legal protections afforded to minority shareholders under Ethiopian law. Once requested, the auditor is obliged to call a general meeting with shareholders representing at least a fifth of the capital of the company.

Going together with this protection is the right to appoint an independent auditor. Under Ethiopia’s revised Commercial Code, every share company must have at least one independent and impartial external and assistant auditor. A shareholder representing no less than a fifth of the capital of the company can appoint such a person.

Another protection is the right to challenge a resolution. Like many other legal systems, resolutions adopted at general meetings by the vote of the majority shall be binding. Any shareholder whose interest is affected by the resolution can apply to the court to invalidate such resolutions within three months.

Minority shareholders also have the right to access information from the management, which is necessary to take a position on agendas tabled during general meetings. However, access to information by the board may be prohibited where it is deemed that disclosure would cause significant damage to the company. A shareholder denied this right might sue, at which point the court will decide whether there is sufficient justification to hold back the information.

A minority shareholder also has the right to seek the dissolution of the company. A company may be dissolved by order of the court based on the application of just a single shareholder. A good cause should be determined on a case-by-case basis, but it could constitute a scenario where the company has failed at its main establishment objective.

Despite these and other protections accorded to the minority shareholders, the Commercial Code has failed to incorporate some of the modern safeguards for minority shareholders.

One is lack of protection against ‘freeze-out,’ using the corporate control vested in a majority of shareholders or board of directors to eliminate minority shareholders from the enterprise. It could also be an action that reduces the relative significance of their voting power, claims on corporate assets, or deprives them of corporate income or advantages. A freeze-out may take place through a merger or consolidation and may be utilised by the majority to transform the original company into a new one in which the rights of minorities are diminished.

This extends to the election of board directors, which are elected by a general meeting. Even if minority shareholders manage to get one representative or two in there, the majority can still freeze them out at any given time as directors are subject to general meeting decisions. They may be removed even without good cause and in the presence of a contrary stipulation under the memorandum of association. This will have a determinate effect on the minority shareholders since majority shareholders will use it to circumvent their representation on the board.

On top of these gaps, the absence of email voting system, proportional voting system, lack of veto right on some selected issues and lack of constructive derivative actions are some of the missing legal protections for minority shareholders under the revised Commercial Code.

The G7 Vaccine Charade

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In a recent essay on Samantha Power, President Joe Biden’s new administrator of the United States Agency for International Development (USAID), Michelle Goldberg of The New York Times writes—correctly—that Power’s “first big test … lies in what America does to help vaccinate the rest of the world against COVID-19.”

And Power herself is quoted as saying that, “It’s about a very, very tangible, results-oriented agenda.”

Results seemed to follow. At the G7 summit, Goldberg duly reports, Biden announced that the US would contribute half a billion vaccine doses for use in “low- and middle-income countries.” According to Goldberg, this “spurred other countries to step up their contributions,” ensuring “a billion doses by 2022.”

Except that it did not. The actual new commitment was for 870 million additional doses, not a billion, according to the World Health Organisation (WHO), “with the aim to deliver at least half by the end of 2021.” In other words, the “aim” would be to get “at least” 435 million additional vaccine doses to the COVAX facility (the international mechanism established to ensure vaccine access in poorer countries) “by 2022.”

Even if all billion come in over the course of 2022, Agnès Callamard, the Secretary-General of Amnesty International, has called it a “drop in the ocean,” made of “paltry half-measures and insufficient gestures.” As Gavin Yamey of Duke University summed up the outcome for a Lancet working group, the “rich countries behaved worse than anyone’s worst nightmares.”

And there is a further problem: the G7 commitments are only promises, and the G7’s track record on meeting its promises is not especially good. Here the language of the G7 communiqué is telling: “aim to deliver.” Even if one believes that those words were chosen in good faith, they are not exactly precise or categorical.

Today, Africa and India have vaccinated barely three percent of their combined populations of about 2.5 billion people.

Why is that?

The US alone is reputed to have the capacity to produce 4.7 billion doses by the end of 2021 – four billion more than America needs. Again, according to Amnesty International, the G7 will have “three billion doses surplus to requirement by the end [of 2021].”

Where are those doses going?

Apparently to wealthy customers. This includes 1.8 billion doses committed to the EU for “booster shots,” as reported by Varsha Gandikota-Nellutla of Progressive International. Meanwhile, outside the rich-country bubble, the virus can spread, mutate, sicken, and kill.

This is not merely a humanitarian issue. If viruses are not eradicated, they evolve. Already, multiple variants of the coronavirus have appeared. As far as we know, none can overcome the available vaccines. But no one can say for sure that such a variant will not emerge, and the more time lost, the greater the risk—and not merely for the world’s poor.

One obvious solution is to get the hoarded stockpile into arms all around the world. A second would be to waive patent protection and supply restrictions on the Western vaccines so that they can be produced more rapidly in other countries. If India alone, the world’s largest vaccine producer, could overcome current production difficulties, it could resume exports and start supplying doses to the rest of Asia and to Africa, while meeting its own requirements by the end of this year. And enough doses could be produced to end the pandemic, for practical purposes, by the end of 2022.

In early May, the Biden administration announced its support for a proposal, advanced by India and South Africa, to waive Trade-Related Aspects of Intellectual Property Rights (TRIPS) enforcement on COVID-19 supplies, including vaccines.

But what does this amount to? Thus far, just support for negotiations. With whom? Over what?

It was the government, not the big drug companies, that underwrote the basic research used to invent these vaccines. The companies have patents only because they were granted as an “incentive” to produce them. The claim that they would not do as such otherwise is absurd: the US government has the power of compulsion under the Defense Production Act, which it has already used to get vaccine production ramped up—including in a way that briefly disrupted Indian production.

Meanwhile, there is China, and at a smaller scale, Russia. China currently is vaccinating more than ten million people a day, an accelerating pace that will cover their entire population this year. In 2022, China could produce up to five billion doses for the world—enough for India and Africa combined. Meanwhile, Chinese producers are determined to build production sites worldwide, beginning recently in Egypt. And Russia has plans to produce over 850 million doses of Sputnik V in India alone this year. That is just about the same as the entire G7 commitment—and it will happen sooner.

Not everything we read on these matters is necessarily reliable. Not every projection will work out. It may be true, as reported, that the Chinese vaccines are less effective than those produced by Pfizer-BioNTech, Moderna, AstraZeneca, Johnson & Johnson, and Sputnik V.

But for now, where this is heading is obvious. The US and Europe are offering crumbs, protecting their billionaires, their pharmaceutical lobbies, and their politicians’ campaign contributions. Meanwhile, China and Russia have other ideas and the capacity to realise them. So, before too long, when the back of this pandemic is finally broken, the world will have fresh evidence about who is reliable and who is not.

I would say that all of this is unprecedented, but it is not. In the cold and hungry European winter of 1947-48, Jan Masaryk, the Czechoslovak foreign minister, pleaded with the US for food shipments. The US dithered, imposing conditions. Klement Gottwald, head of the Czechoslovak Communist Party, appealed to Joseph Stalin, who put 300,000 tons of wheat onto trains. Czechoslovakia fell under full communist control in February 1948.

Samantha Power is right. It is all about tangible results.