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Author: Digital Editor

Ethio telecom Posts Record Growth While Power Shortfalls, Disclosure Raise Concern

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Ethio telecom’s latest annual performance review painted a picture of rapid infrastructural expansion and commercial resilience. However, behind the growth lies a deepening strain on the country’s ailing energy grid and unresolved questions about financial transparency and market discipline.

In the past year alone, the state-owned telecom operator has added 1,683 new mobile sites, bringing its total nationwide to 10,010. Nearly half of these installations now dot the rural landscape, regions that have long been deprived of basic infrastructure and even access to the national electricity grid.

Last week, Frehiwot Tamiru, CEO of Ethio telecom, presented the results at the Science Museum on Menelik II Avenue, revealing that the network’s user capacity had risen to 104 million, an increase of 35.3 million in a single year.

LTE coverage now blankets 936 towns, while 5G services are available in 26 locations, including 16 new towns. The company’s rural connectivity program linked six million people across 2,388 villages, a feat that few government utilities can currently match in reach or pace.

But that very pace now appears to be outstripping the country’s foundational capacity to support it. With 43pc of telecom sites dependent on diesel generators and only 21pc powered by solar systems, the rollout exposed the acute mismatch between the federal government’s digital ambitions and its energy realities.

The company’s heavy dependence on alternative energy sources is no longer a temporary measure.

“Many of these sites are not connected to the national grid,” said Frehiwot.

Ethio telecom increased its solar energy capacity from 20MW to 27MW, while expanding its fleet of backup generators from 3,814 to 4,305 units. These investments, although necessary to maintain service continuity, are both costly and logistically challenging.

Yemanebrehan Kiros, general manager at Yomener Energy Auditing & Engineering Plc, was blunt in his assessment.

“It’s not for economic benefits,” he told Fortune.

He questioned the long-term feasibility of relying on solar and diesel systems, particularly in a country where electricity is heavily subsidised but often unreliable. Yemanebrehan attributed the high capital costs, spatial footprint, and battery degradation to serious drawbacks.

“Efficiency is a virtual dam,” he said, arguing that optimising existing infrastructure would deliver better returns than simply scaling generation.

Ethiopia’s electric grid coverage reaches 25pc of the country’s landmass, and household access hovers at 22pc, figures that underline the gravity of the problem. The average household experiences 35 power interruptions per month, each lasting approximately 21 hours. Distribution losses exceed 20pc, and regional disparities are glaring, while urban areas like Addis Abeba enjoy 93pc access. Rural regions of the Afar and Somali regional states remain below 12pc.

The Ethiopian Electric Power (EEP) utility, now scrambling to meet surging industrial and digital demand, faces its own headwinds. It hopes to generate 426 million dollars in export revenue this fiscal year, even as it struggles with voltage fluctuations, overloaded lines, ageing conductors, and environmental interference.

By March 2024, Ethiopia’s generation capacity stood at 4.3GW, driven primarily by hydropower. Ambitions remain high. With GERD and other large-scale hydro projects, the country targets a capacity of 10.7GW by 2027. The federal government expects solar power to comprise 17pc of total generation by 2040.

However, the infrastructural groundwork to distribute this power equitably remains worryingly inadequate.

While the telecom operator basks in operational success, posting 162 billion Br in revenues, a 72.9pc year-on-year (YoY) increase, and a 99pc fulfilment of its annual target, financial analysts are raising concerns over transparency and governance.

A dividend payout of 12 billion Br to the federal government, its sole shareholder, was made without accompanying disclosures on whether the sum was derived from current profits or accumulated reserves.

Frehiwot avoided directly addressing the dividend allocation for the 47,000 new shareholders who bought into the company’s shares this year. She disclosed that registration remains incomplete for one percent of shareholders and that certificates will be issued.

Mesay Woubeshet, a company representative, confirmed that there will be no dividend distribution or shareholders’ meeting this year, citing pending registration. For market watchers, this is a troubling signal.

“Was it based on current-year profits or retained earnings?” asked Mekbib Tesfaye, a London-based analyst, who argued that such ambiguity impacts any reliable assessment of long-term sustainability.

According to Mekbib, a broader issue, such as the lack of detailed financial disclosures, where Ethio telecom has yet to publish unaudited income statements, balance sheets, or cash flow summaries, deprives market observers of tools for independent evaluation.

“If Ethiopia hopes to build a credible capital market, it must enforce transparency standards on its flagship SOEs,” he said.

Adding to the concern is the fate of three billion Birr in new shareholder investments, made in anticipation of privatisation. Without dividend rights, audited returns, or board representation, Mekbib questioned the opportunity cost of those funds.

“They could have earned 300 million to 450 million Br in a deposit account,” he said.

Ethio telecom’s market dominance, especially its low tariffs, has come under scrutiny from new entrant Safaricom Ethiopia Plc, which recently crossed the 10 million user mark. CEO Wim Vanhelleputte warned that current prices are unsustainable.

“This is not profitable for us in the long run,” he said, implying looming tariff adjustments.

Ethio telecom, meanwhile, insisted it offers one of the lowest rates globally, leveraging its scale and entrenched infrastructure to crowd out competition. However, this could raise regulatory questions, particularly in the context of the authorities’ commitments to telecom liberalisation under their broader economic reform agenda.

Beyond digital connectivity, Ethio telecom is also pushing into e-commerce. Its online marketplace, Zemen Gebeya, now hosts 195 active merchants and nearly 3,800 products, processing 7,000 orders worth 15.3 million Br. A modest beginning, but one that signals a strategic shift toward platform economics and value-added services.

Tourism Collapse Triggers Foreclosure Threats in Sacred Town

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Once a crown jewel of the country’s tourism circuit and a beacon for international pilgrims, Lalibela now finds its lifeline severed. Its hospitality industry, the backbone of the local economy, is buckling under a weighty mix of militarised conflicts, pandemic-induced stagnation, and mounting debt obligations.

Almost half of the 37 hotels affiliated with the town’s Hotel Association have received foreclosure notices, giving them 30 days to settle their ballooning debts or forfeit their properties to creditors, chief among them the state-owned Commercial Bank of Ethiopia (CBE).

“Tourism is the area’s bloodline, and it has dried up,” lamented Yohannes Assefa, president of the Lalibela Hotels Association.

Lalibela’s financial unravelling traces back to 2016, when dozens of hotels took on loans totalling 160 million Br, an optimistic bet on a thriving tourist economy. But what followed were years of systemic shocks, including COVID-19, which shuttered the global travel industry, and militarised conflict in the Amhara Regional State turned the town into a battlefield, derailing any hopes of recovery.

Now, seven years later, that initial debt has metastasised to 250 million Br, despite repeated extensions and grace periods. Twelve properties are on the verge of foreclosure. Owners say they are ensnared in a credit trap, interest accrued during deferrals added to their burdens, even as their revenue streams vanished.

“They gave us 30 days to pay millions with zero guests in sight,” said Kassahun Tadele, manager at Mountain View Hotel.

Before the pandemic, Lalibela thrived, welcoming over 50,000 international tourists annually. Between October and February, peak tourist season, the town saw up to 100 visitors daily. Tourism accounted for approximately 70pc to 80pc of the local economy, generating annual revenue of around 5.4 billion Br, according to data from the Amhara Regional State Tourism Bureau.

However, the COVID-19 pandemic, followed by prolonged regional conflicts, devastated local businesses, leaving hotels unable to repay their loans. Four hotels were destroyed because of the conflict, while widespread theft stripped other hotel owners of their valuable assets.

Abebe Demsash, owner of the 30-room Zan Siyum Hotel and a board member of the Lalibela Hotels Association, borrowed 14 million Br seven years ago, a debt now inflated to over 22 million Br. His hotel operations came to a standstill during the conflict, and he lost his car to thieves who left it ransacked some 80Km away.

“I’ve not been working since,” Abebe recounted.

He had to lay off all his employees except security personnel.

Despite multiple loan extensions and an operational loan of 370,000 Br, many hoteliers find themselves barely holding on. Interest accumulated during loan extensions has only increased their burdens, pushing them further into debt.

“Some have left the country,” said Yohannes, describing the dire conditions faced by many hotel owners. “Others are at the mercy of other people.’

Habtamu Kindu, owner of Lalibela Lodge, is among those facing imminent foreclosure. His property, valued at 200 million Br, received a foreclosure notice despite debts amounting to only 10pc of its total worth. Habtamu initially borrowed 13.5 million Br six years ago, had paid much of it off, but still owed 7.5 million Br before the pandemic halted repayments. His debt has since risen sharply to 18 million Br.

Habtamu’s lodge, featuring seven buildings including a lobby, restaurant, and bar, was looted during the conflict, resulting in losses of around 20 million Br, including a vehicle and generator. To make ends meet, he shifted to running a modest tour and travel operation, managing to retain 14 employees. Of his 35 employees, he had to lay off 19.

“The money is nothing if the previous situation doesn’t return to normal,” he added. “We need breathing space.”

Bank officials are sympathetic yet cautious. A senior executive at CBE, speaking anonymously, acknowledged the complexity of the situation.

“There are reputational stakes for the Bank, the ability to recover money in the short term, and the need for regulatory approval,” he told Fortune. “What we lend is depositors’ money. We must maintain the quality of our assets.”

Regulators say any loan restructuring will heavily depend on banks’ willingness. The National Bank of Ethiopia (NBE) is expected to support proposed interest modifications but will not expedite the process. Banking regulations, specifically the National Bank’s 6th Replacement Directive on Asset Classification and Provisioning, place strict limitations on reclassifying NPLs. Loans unpaid for 90 days are classified as non-performing loans (NPLs) and cannot regain “performing” status without clear financial improvement, and restructuring options are limited.

Endalkachew Tsegaye, a senior corporate finance advisor at BDO Ethiopia, a consultancy firm, stated the importance of careful consideration in loan restructuring.

“Forbearance should never be automatic or indiscriminate,” he cautioned. “Repeated restructuring without clear evidence of viability risks undermines credit discipline and masks real exposure.”

He urged loan committees to base their decisions on realistic and forward-looking projections, rather than hopeful assessments, and to comply with international financial reporting standards. He also advised hotels to diversify beyond tourism, noting that Lalibela’s recovery has lagged behind the broader national revival.

Federal officials assert that tourism nationwide is showing signs of recovery. According to the Ministry of Tourism, the country has welcomed around one million tourists over the past nine months, representing a nine percent increase from the previous year. However, their claim that the economy generates approximately 3.5 billion dollars is challenged by operators in the hospitality industry, who attribute empty tables in restaurants to a decline in traveller numbers.

For a town like Lalibela, the drop is real, with only a handful of visitors.

Hotel owners, through their Association, have now petitioned the federal government for support. During last week’s Ethiopian Finance Forum, they submitted a formal request to Eyob Tekalign (PhD), the state minister for Finance, who received their plea with assurances of reconsideration.

Gender-Blind Fiscal System Overburdens Women: Study Finds

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A groundbreaking study has uncovered deeply entrenched gender disparities in the tax system, revealing how ostensibly neutral fiscal policies disproportionately burden women.

Contrary to the common assumption of neutrality, the tax regime imposes heavier obligations on women taxpayers, who tend to earn less and operate smaller and lower-margin businesses. Central to the imbalance is the presumptive tax regime, which targets small and micro-enterprises through turnover-based assessments. The methodology, unchanged since the 2017 Income Tax Regulation, overestimates profitability, particularly in sectors with high female participation, such as food vending, tailoring, and informal retail.

Presented by Kiflu Gedefa (PhD), an economist, at an international conference of the Ethiopian Economics Association, held at its headquarters near the CMC residential complex, the research draws on national datasets, fiscal incidence models, and granular expenditure surveys to expose systemic inequities embedded within income, business, and consumption tax frameworks. Kiflu’s study found the consequences are tangible.

Women-owned businesses pay 8.4pc more in individual taxes and four percent more at the firm level than their male counterparts, despite generating less revenue and holding fewer assets. On average, women pay 37,820 Br annually in taxes, compared to 34,980 Br paid by men. Turnover tax alone reveals a 24.6pc disparity.

Yet, women remain underrepresented in formal tax records. In 2025, women accounted for only 2.1pc of Category C taxpayers, those under presumptive taxation. Out of 407,428 Category C taxpayers in Addis Abeba, a mere 8,612 were women.

According to experts, the crux of the issue lies in the design of policies. They say that the federal tax laws, while gender-neutral in text, are functionally blind to the structural disadvantages women face, such as lower earnings, informal employment, limited capital, and weaker institutional access.

Officials acknowledge these issues but note substantial data limitations as a significant hurdle.

“We collect data from all categories, but we don’t separate them by gender,” admitted Sewenet Ayele, communications head at the Addis Abeba Revenue Bureau.

The Bureau still uses the 2017 Income Tax Regulation, assessing presumptive taxes based on a turnover schedule.

According to the regulation, “Category C pays a presumptive business tax from a turnover-based schedule that should be revised at least every three years.”

However, reforms appear imminent. A new federal income tax regulation in 2025 has removed estimation methods previously applied to Category C. Tax officers are undergoing training to adapt to these changes.

According to Tsehay Befikadu, director of Women & Children’s Affairs at the Addis Abeba Revenue Bureau, the Bureau conducts regular outreach, offering “business consultancy and tax training for women under Category C every month.” However, she admitted the collected data remains general.

“We don’t yet have any initiative to track how much tax women pay versus men,” she said.

An outdated income tax bracket system has compounded women’s tax burdens. Low-income earners, often women, face “bracket creep,” which occurs when higher taxes result from nominal wage increases that are not matched by updated tax thresholds. According to a 2025 World Bank fiscal review, men disproportionately benefit from the progressive tax framework, while inflation and underemployment intensify women’s financial vulnerability.

With 63pc of women in informal employment compared to only 38pc in formal jobs, many women encounter a tax system insensitive to income fluctuations and lacking protective mechanisms.

Estimates from presumptive tax data show that women pay roughly 1.03 billion Br more in taxes annually than men, despite operating smaller businesses. Women’s total tax contributions were approximately 4.83 billion Br.

Consumption taxes further exacerbate the disparities. Female-headed households spend a larger portion of their income on value-added tax (VAT) and excise taxes. Before recent tax reforms, middle-income female-headed households paid up to 5.3pc of their income in VAT, compared to 4.7pc among male-headed households. Recent adjustments have slightly narrowed this gap, but the differential persists because women more frequently purchase taxed essentials, such as feminine hygiene products, baby formula, cooking oil, salt, and household cleaning supplies.

The expansion of excise taxes on these items further burdens women financially. A 2022 World Bank analysis disclosed the poverty-inducing nature of indirect taxes for female-headed households, resulting from their lower disposable incomes and distinct spending patterns.

Financial exclusion also perpetuates tax vulnerabilities among women. According to the National Bank of Ethiopia’s (NBE) 2025 Financial Inclusion Scorecard, only one in 30 banks provides transformative financial services to women, despite commitments under the second edition of the National Financial Inclusion Strategy. Women are underbanked and underserved, lacking access to accounts, credit, insurance, and digital banking. They struggle to access formal tax relief, register their businesses, or file taxes electronically, which reinforces their tax-related hardships and limits their economic advancement.

Institutional coordination gaps further complicate addressing these inequities. Although joint initiatives between revenue offices and social ministries exist, accurately tracking women’s tax contributions remains elusive.

Zekariyas Desalegn, a gender-based violence prevention expert at the Ministry of Women & Social Affairs, noted that despite joint training and data collection efforts, “tracking women’s financial contribution remains a gap.”

To tackle structural inequalities, Kiflu’s study urged immediate reforms, including adjusting tax brackets for inflation to shield low-income earners, particularly women, from bracket creep. It recommends revising presumptive tax models with updated gender-specific data and implementing temporary tax relief measures for women-led microenterprises. The removal of VAT and excise taxes on essential goods, along with increased access to gender-sensitive financial services, is proposed to reduce persistent inequities.

While policymakers have initiated discussions, advocates insist that data alone cannot resolve the issues. They argue for robust administrative reforms and a political commitment to thoroughly incorporate gender considerations into fiscal policies.

“We must stop confusing formal neutrality with actual fairness,” said Kiflu.

According to him, tax systems imposing higher burdens on women reinforce existing inequalities.

For Fitsum Atnafework, founder of Self Reconciliation Event Organiser, grassroots financial literacy and local-language tax education are essential to achieving fairness.

“Education is the first step to fairness,” she said. “If women do not understand the system, they cannot trust it.”

She advocates for mentoring programs, simplified business registration, mobile tax services, and the establishment of a “Women’s Small Business Tax Credit” to promote business formalisation and growth. Her recommendations include grace periods, customised presumptive models, flexible payment plans, and subsidised advisory services for emerging women-owned businesses.

 

Addis Abeba Businesses Face Mandatory Health Insurance Fee Stirring Dissent

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The Addis Abeba City Administration has mandated all businesses to contribute to the Community-Based Health Insurance (CBHI) scheme as a precondition for accessing essential government services, including trade license renewals and tax clearance certificates.

The circular, signed by Biniyam Mikru, head of the Addis Abeba Revenue Bureau, took effect on July 17, 2025, with immediate enforcement, sparking a flurry of confusion, resistance, and criticism over a lack of stakeholder engagement.

City officials argue the measure is not a new levy but rather an extension of an existing national healthcare framework.

“This isn’t an additional charge,” said Yohannes Chala (MD), head of the city’s Health Bureau. “We’re simply bringing the business community into a national health framework that already exists.”

The 2017 CBHI Regulation serves as the legal foundation for the measure, categorising taxpayers into three tiers with annual contributions: 10,500 Br for Class A, 6,900 Br for Class B, and 2,000 Br for Class C.

The administration insists that the contributions will enhance healthcare access, particularly for uninsured urban residents, and points to last year’s one billion Birr public spending on health insurance subsidies.

“Healthcare costs are rising,” said Abdulkadir Redwan, head of the city’s Finance Bureau. “Everyone must play a role. Businesses that benefit from a healthy workforce and community should be part of the solution.”

However, the rationale has done little to assuage growing frustration within the private sector. The Addis Abeba Chamber of Commerce & Sectoral Associations (AACCSA), representing tens of thousands of enterprises, has condemned the rollout as abrupt and exclusionary.

“We’re blindsided,” said Zahara Mohamed, president of the Chamber. “No consultation, no preparation, just a bill slapped on businesses already struggling to stay afloat.”

The Addis Abeba Health Bureau reports that 2.5 million city residents are already enrolled in CBHI, which provides subsidised treatment at public health facilities. Officials argue that involving the business community is the next logical step in expanding coverage. Still, critics insist that without clear communication, transparency in how fees are calculated, and adequate grace periods for payment, the policy may inadvertently undercut public trust in the insurance model it seeks to strengthen.

Addis Abeba hosts approximately 28,348 microenterprises, which generate livelihoods for over 1.3 million people. One of these business owners is Semira Mudesir, a Class C taxpayer operating a small retail shop near 22 Mazoria. According to her, the policy compounds financial pressures. Her tax obligations have already ballooned from 15,000 Br last year to 35,000 Br this year, and the CBHI fee feels like the last straw.

“This is unfair and unsustainable. I don’t know what to do. I’m waiting to pay,” she said, lamenting that small businesses like hers are struggling under rising costs and economic uncertainty. “We’re being squeezed from every side.”

Critics also blame flaws in the scheme’s design. Former Ethiopian Insurance Corporation (EIC) executive, Mekonnen Gebreweld, dismissed the directive as coercive and counterproductive.

“The tiered contributions are inequitable, considering all enrollees get the same healthcare coverage,” he told Fortune. “You can’t build a sustainable insurance model through forced compliance.”

Research appears to back the scepticism. A 2023 study in Annals of Global Health revealed that only 24pc of urban Ethiopians surveyed supported mandatory payments into a proposed Social Health Insurance scheme, with an average willingness to pay 1.6pc of income, far below government expectations. Particularly among higher earners, mandatory contributions were perceived as inequitable and burdensome. Respondents in the two highest income quintiles are 10 to 13 percentage points more likely to oppose the scheme, viewing the premium as unfair.

Negotiations are ongoing. Business associations are lobbying for phased implementation and extended payment deadlines. As the dust settles, the standoff has revealed a broader tension between fiscal necessity and governance legitimacy in a city facing inflation, economic slowdown, and increasing demands for social services.

“This undermines the whole purpose of insurance,” said Mekonnen. “Businesses deserve to get clear information on how the system works, the benefits it offers, and its financial impact.”

The domestic insurance sector, particularly the life insurance segment, remains severely underdeveloped. Insurance penetration (premium as a percentage of GDP) remains below one percent, and industry analysts attribute the lack of awareness, limited distribution, few products, and underinvestment in talent to low penetration.

“Once people see the value of insurance, many will join willingly,” said Mekonnen. “Forcing it only breeds resentment

Elite School in 129m Br Tax Crosshairs

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A simmering tax dispute between federal tax authorities and Sandford International School (SIS) is threatening to escalate into a courtroom confrontation, putting the status of nonprofit education under legal scrutiny.

The School, one of the oldest elite institutions in Addis Abeba, is implicated in operating like a for-profit entity despite its charitable registration.

The Ministry of Revenues demanded more than 129 million Br in profit tax from the School, covering the five years beginning in July 2018. The sum includes substantial penalties and interest charges.

The tax claim has surprised and shaken the School’s community, raising broader questions about the classification of nonprofit educational institutions under the tax law.

Sandford International School, established in 1947 during Emperor Haile Selassie’s era, began as a modest community school. Over its 78-year existence, the institution has expanded, now educating over 1,000 students from nursery through year 13. Its students include both international students paying tuition in dollars and national students who pay in Birr.

In 2013, the School underwent a restructuring, officially registering as Sandford International Endowment School, a charitable organisation regulated by the Authority for Civil Society Organisations. The School operates under a governance board comprising representatives from the ministries of Education and Foreign Affairs, as well as public figures and parents.

Despite this charitable status, in April 2025, the Medium Taxpayers Office formally assessed the School, asserting it should pay income tax due to the “significant fees collected from parents.” A tax notice issued on April 30, signed by Bedasa Tekesa of the Tax Calculation Team, detailed the liabilities, including over 2.5 million Br for 2018, approximately 4.8 million Br in 2019, more than 56 million Br in 2020, nearly 29 million Br in 2021, and around 37 million Br in 2022.

Federal tax officials claimed that their assessments were based on audited financial statements and expense reports, arguing that the School’s revenue constitutes taxable income.

School administrators strongly oppose the claim.

“We’ve never been asked to pay income tax in the School’s history,” said Mamaru Gislaw, head of Internal Control & Audit at Sandford School. “This demand contradicts our status and mission.”

The School submitted a formal complaint to the Tax Appeal Office, insisting that it operates as a nonprofit entity, reinvesting all its revenues in school operations, salaries, educational resources, and infrastructure improvements, rather than distributing profits.

“The School was established as a charitable organisation serving the public and third parties,” the complaint reads. “It isn’t a commercial entity with shareholders. Therefore, this income should not be subject to income tax.”

However, the Appeal Office rejected the School’s appeal. In a ruling, it stated that although Sandford is officially registered as a charitable organisation, its operations are akin to those of a profit-driven business.

“Sandford is registered as an international school and collects tuition fees for its services,” reads the ruling signed by Alem Tadesse, the head of the Office. “It doesn’t serve the public or third parties in the charitable sense. It must be taxed similarly to other private international schools.”

Displeased with the outcome, Sandford administrators are now preparing to escalate their appeal to the Federal Tax Appeal Commission and potentially pursue the matter in court.

“Even if our appeal is denied at the commission level, we will go to court to seek justice,” Mamaru told Fortune, disclosing the School’s determination to challenge the government’s position.

Legal experts remain divided over the legitimacy of the tax claims.

Natae Eba, a tax specialist and legal director at Mehreatab & Getu Advocates LLP, believes the Ministry’s demands are justified.

“Sandford collects substantial income from tuition fees and doesn’t allocate the majority of these funds directly to charitable activities,” he said. “Providing limited scholarships or educational support, while commendable, does not set it apart from other private schools that also offer such benefits and still pay profit tax.”

Natae argued that Sandford essentially operates similarly to profit-making educational institutions and thus should not receive preferential tax treatment. However, he also criticised the government’s delayed action.

“If the school has been operating under a charitable status for years without being flagged, the government’s oversight is equally at fault,” he said.

While Natae believes the principal tax should be paid, imposing penalties under these circumstances could be unfair.

“It’s enough if the School pays the tax,” he told Fortune. “Imposing penalties under such circumstances is unjust.”

Not all legal experts agree on the dispute. Yared Siyum, principal attorney at Yared Siyum & Associates Law Office, views the tax authorities’ approach as contradictory and legally problematic.

“The Ministry is essentially accusing Sandford of engaging in commercial activity without a business license,” Yared stated. “If that is the case, this is more than just a tax matter; it potentially involves criminal violations.”

Yared challenged the legitimacy of retroactive taxation without prior legal reclassification.

“You can’t simply claim an entity has been operating as a business, demand taxes, and ignore the regulatory gap,” he argued. “That is not how the law works.”

According to Yared, the need for proper legal procedures requires Sandford first to be reclassified with a commercial license before tax liabilities can be lawfully assessed.

“Only then can tax liabilities be assessed in a legally consistent way,” he said. “The Ministry should transparently demonstrate the thoroughness of its audit and establish that the income taxed is genuinely derived from business activities.”

The Ministry denied giving  a comment citing that the case is pending.

 

Rogue Accountants Bleeding Businesses

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In recent months, a troubling pattern has emerged across Ethiopian businesses: a wave of rogue accountants exploiting the very companies they are meant to serve. Once viewed as custodians of financial integrity, these professionals now pose a threat to the lifeblood of small and medium-sized enterprises. What’s unfolding is not mere negligence or poor service; it is coercion and, in some cases, extortion. Small businesses, especially, are finding themselves ensnared in a battle they never anticipated.

Two companies I know recently confided similar ordeals with their accountants. In both cases, accountants withheld critical financial documents and demanded large sums of money in exchange for their return. They also threatened to file false reports with the customs commission. One company paid hundreds of thousands of birr to avoid confrontation and keep its operations running.

The other remains locked in a legal and operational nightmare, unable to recover its data. These are not isolated stories. At social gatherings, more business owners are speaking up about accountants abusing their access for personal gain. What was once considered a rare form of malpractice is becoming a mainstream method of extortion, with tangible consequences.

The tactics used are disturbingly simple yet devastatingly effective. Many SMEs entrust the complete control of their finances to a single in-house accountant. That person holds access to sensitive records—payroll, tax filings, invoices, and more. In a healthy setup, this trust fuels financial stability. However, in the wrong hands, it becomes a weapon.

Some accountants threaten to report their employers for tax evasion or underreporting, which can trigger audits through anonymous tips. Even unfounded accusations can lead to frozen bank accounts, penalties, and reputational damage. Without access to documents, companies are left powerless, their operations suspended in uncertainty.

This crisis stems from a web of weak regulation, institutional loopholes, and digital vulnerability. Too many businesses trust too quickly. Few establish internal checks. Fewer still maintain backups. The profession itself lacks accountability. Licensing requirements are minimal, and oversight is patchy. As a result, unethical actors operate freely, confident they will never be held to account.

The continued reliance on manual accounting compounds the risk. Secure digital platforms, like Odoo, endorsed by the government, offer audit trails, data protection, and continuity. But implementation costs run into the millions. Most small businesses can’t afford them. A digital divide has opened up: large firms can shield themselves; smaller ones are exposed.

Startups and informal businesses suffer most. One accountant is expected to do everything—recording, filing, managing payroll. It’s cost-effective, but dangerously centralised. If that person turns rogue, there are no safeguards in place. Owners face a terrible choice: pay up or lose everything.

This isn’t just a technical or legal problem. It’s a direct threat to the future of Ethiopia’s small enterprises. If trust in professional services erodes, so too does business confidence. Innovation, job creation, and economic diversification all take a hit.

The emotional toll is no less severe. Victims often feel ashamed or unsure where to turn. Speaking out feels risky. Legal options are murky. And without industry standards or clear complaint systems, justice remains elusive.

Change must come from all fronts. First, professional certification and licensing must be strengthened. An independent body should regulate the field, empowered to enforce ethics and revoke credentials. Businesses must also retain the right to access their records, no matter who manages them.

Customs authorities must revise their procedures for processing whistleblower reports. A pre-audit verification unit could help screen malicious tips and focus on credible claims. For businesses, even that layer of protection could make all the difference.

Internally, resilience is vital. Even basic digital tools, whether free or low-cost, can offer some level of security. Open-source software, if properly backed up and shared across stakeholders, can break the dependence on a single individual. Odoo and similar platforms should be subsidised for SMEs or supported through private partnerships.

Education matters too. Entrepreneurs need training in basic bookkeeping, fraud prevention, and digital literacy. With knowledge comes protection. Every startup should be equipped with the tools to guard against manipulation.

Business associations must also play a role. They can vet accountants, offer support, and publish blacklists of offenders. A central complaint platform would help victims speak out while protecting their identities. Exposure is a rogue accountant’s greatest fear.

If we stay silent, the problem will fester. But if business owners speak up and support one another, they can confront it. Ethical accountants still exist, many, in fact. However, those who weaponise their access are jeopardising not only individual companies but the economy as a whole.

Trust is the bedrock of commerce. It must be earned, monitored, and protected. Accountants are meant to be guardians of the truth. When they become the enemies, we all lose.

 

 

 

The Law, the Guards, and the Doghouse

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A recent incident in my residential compound reinforced a growing sense of unease: our society struggles with the idea of the law. Rather than treating rules as shared agreements for mutual benefit, many appear more interested in spotting loopholes. This instinct to circumvent the spirit of the law undermines trust and breeds inconsistency. It signals a deeper problem in how rules are viewed, understood, and enforced.

Not all laws are clear or intuitive. Some raise more questions than answers, making their original intent difficult to discern. One often wonders whether certain rules exist to serve the public or to complicate daily life. The gap between intent and execution frequently distorts the rule’s effect. Well-intentioned laws can become burdensome in practice. Poor implementation, red tape, and vague enforcement reduce credibility. People begin to see regulations as hurdles rather than protections. When enforcement adds frustration instead of resolution, cynicism takes root.

Another common issue is the bottom-up application of rules. Too often, complaints become stuck at the lower rungs of institutional hierarchies. One might attempt to lodge a serious concern, only to be blocked by security guards or clerks with no real authority. This creates stagnation. Gatekeepers operate without oversight, sometimes dismissing valid concerns for arbitrary reasons. When institutions function like this, frustration and mistrust accumulate—not for lack of intent, but for lack of access.

At the heart of this dysfunction is a troubling emotional climate. Many seem ready to erupt at the slightest provocation. Misunderstandings that could be calmly resolved often spiral into verbal abuse or near-violence. Escalation has become the default, not the exception.

This brings me back to the episode in my compound. A group of young men arrived by taxi and entered one of the houses. A few minutes later, they emerged carrying a doghouse and attempted to load it into the taxi. At this point, the security guards intervened.

These guards, new to the job, demanded a permission slip. The young men had none, prompting a confrontation. From a window above, a woman—presumably a relative—shouted at the guards to let them pass. Her raised voice turned what could have been a minor misunderstanding into a spectacle.

The guards seemed more loyal to the compound committee than to the residents themselves. Fearing disciplinary action, they insisted on protocol. One phoned a committee member, who confirmed the item could be removed. Only then did the guards step aside.

But the situation did not end there. One of the young men, now agitated, launched into a tirade of insults, clearly trying to provoke a fight. The previously composed guard began to lose his temper. Caught nearby, I tried to intervene, urging restraint as the shouting intensified. Children watched in silent confusion.

The woman soon stormed down, face-to-face with the guards, berating them for denying her property’s removal. Tension thickened. Fortunately, the young men departed before the confrontation turned violent.

From a procedural standpoint, the guards weren’t entirely wrong. They were enforcing rules as they understood them. But once the resident had vouched for her family, some flexibility would have gone a long way. Common sense matters as much as technical compliance.

The item in question posed no real risk. Yes, theft does happen and vigilance is necessary. Still, the rigidity turned a minor issue into a public confrontation. The refusal to de-escalate transformed policy into provocation.

What played out in those twenty minutes reflects broader societal dynamics. Rules are necessary, but discretion is essential. Anger brews when people feel unheard, blocked by faceless systems or rigid protocol. That anger spills into confrontations that damage social cohesion.

Society does not need fewer rules, but better ones—clear, practical, and consistently applied. Yet even the best policy will fail without a culture of empathy. Mutual respect must undergird the law. Patience, dialogue, and flexibility should be social norms.

A culture that values de-escalation over dominance creates safer communities. When every encounter becomes a battle of wills, society suffers. Instead of entrenching positions, we must learn to listen and consider context. Conflict rarely solves what conversation could.

Ultimately, a harmonious society is not built solely by written codes. It is cultivated through shared values and the courage to act with humanity. Rules may govern behaviour, but compassion defines community. That, more than any regulation, is what keeps us whole.

Repackaging Dispossession as Modernisation. A Lesson.

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When I stepped onto campus life in the early 2010s, the place felt hushed, as if everyone shared a secret. Students queued for breakfast. Bread, eggs, and a swirl of injera cost 20 Br a day. It felt like a bargain, and it was a bargain. Nonetheless, the silence hinted at another bill coming due.

Outside the gates, the government was heralding “the age of wheat.” The EPRDFites stated that a vast expansion of state-led irrigation across Afar and Somali regional states, as well as the Bale Zone of the Oromia Regional State, would lift the country out of import dependence and into food security. Officials promised jobs, dignity and prosperity. They also promised growth, an annual average of 9.5pc for five years to 2019.

The numbers dazzled visiting donors and filled policy journals with praise for Ethiopia’s “developmental state.” At ground level, the reality looked different. Land that once fed families was swept into mechanised estates. Communal plots were reclassified as “unused” and leased to large investors, many of them foreign. Villagisation programs in Gambella Regional State and the lowlands have displaced agro-pastoralists from their ancestral lands, ostensibly to combat chronic food insecurity.

The government’s Constitutional mandate to all land, an inheritance from the 1975 Revolution, later cemented in the 1995 Constitution, became a powerful lever. Officials could allocate or withhold plots according to political prerogative, not productivity. The old revolutionary slogan “Land to the Tiller” returned, but now with an ironic twist. The state that once vowed to end serfdom had become the landlord.

Scholars such as Fana Gebresenbet (PhD) and others recognised the pattern. They traced how displacement was no policy accident, but a central feature of what geographer David Harvey calls “accumulation by dispossession.” Mechanisation and consolidation introduced a new rural labour regime. Women and the young bore the brunt of the insecurity due to short-term jobs, low wages, and revolving contracts.

Meanwhile, GDP worship crowded out questions of justice. Bright export figures masked a worsening food gap, as wheat and flowers were shipped abroad while local markets became increasingly thin. Sugar factories, launched with political fanfare, turned into financial sinkholes; viability bowed to loyalty. Ethiopia, far from offering an alternative to global capitalism, became another outpost, producing for others, extracting from itself.

On campus, the tension continued to build. Our subsidised meals came from wheat fields that were once family farms. The quiet in lecture halls mirrored the enforced quiet of villages. But silence has a breaking point. In 2015, the Addis Abeba Master Plan, which tried to extend the capital’s reach into farmlands on the outskirts of the city, sparked protests that soon engulfed the country. The demonstrations looked sudden only to outsiders; they were the stored up anger of people whose land, labour and lives had been subordinated to a development model that measured success in exports and statistics.

The contradiction lay at the heart of the stateled blueprint. In theory, centralised planning would lift the masses. In practice, party, state and market fused into a single command. Technocrats supplied rational language; political survival set the investment agenda. The model did not fail because it was misapplied. It unravelled because it worked exactly as designed, prioritising growth over equity, and scale over consent.

The crisis runs deeper than policy missteps. As thinkers such as Gilbert Rist and Arif Dirlik argue, “development” itself is an ideological construct that offers one road from “traditional” to “modern” and leaves little room for histories of extraction and inequality. Ethiopia adopted the script wholeheartedly, repackaging dispossession as modernisation.

Land remained the fault line. Farmers held userights but not ownership. As the population expanded faster than arable land, plots shrank, soils became exhausted, and competition intensified along ethnic lines. Environmental degradation followed. The legal ambiguity led officials to label certain groups “nonindigenous” and remove them, turning politics into a scramble for territory rather than a project of shared growth.

Philosopher Nancy Fraser calls such moments “hegemonic crises,” when the prevailing common sense no longer aligns with lived reality. Ethiopia entered that limbo around the mid-2010s, its grand narrative fraying even as cranes still dotted the skylines and export charts remained bright.

Back in the dining hall, our bread was real enough, and so was the rage rumbling in the countryside. Any honest account should have held both truths together. The developmental state sowed silence; the harvest, inevitably, was noise.

Teaching Hospitals Shoulder the Burden While Administrators Count the Beans

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Teaching hospitals everywhere juggle three jobs at once: teaching, curing, and discovering. But, few do so on a tighter rope than those in Ethiopia.

Around the world, these institutions shape medical minds while pushing the frontiers of science. In Addis Abeba, Gondar, Jimma, Hawassa, and Mekelle, they have taken on an additional role. They are compelled to rescue an overstretched public health system.

That extra duty has turned them into the country’s most critical clinical anchors even as their funding and management remain trapped inside university bureaucracies built for lecture halls, not operating theatres.

Take Tikur Anbessa, Addis Abeba University’s flagship hospital. Measured by patient load, it is the country’s busiest referral centre, yet only seven percent of the university’s budget reaches its wards.

Jimma University Medical Centre, vital for the entire southwest area of the country, manages on 10pc. Mekelle University scrapes by on 10.5pc. Hawassa, the best of the bunch, pulls in 16pc.

Ironically, these sums barely pay their bills. Hospital managers say supplies alone swallow 30pc to 40pc of what little they receive, forcing difficult choices between stocking antibiotics and repairing ventilators.

The mismatch between mission and money is only one symptom of a deeper malaise. There is also a blurred governance issue. Because teaching hospitals are departments within public universities, their chief executives hold impressive titles but feeble purse strings. They have to plead with academic accountants before hiring a nurse, let alone installing an MRI scanner.

Salaries are pegged to academic pay scales, so the country’s best surgeons drift to private clinics or board flights to the Gulf, as well as to Rwanda and Botswana. Those who remain face clogged wards, ageing equipment, and stalled research programmes.

There is an understandable concern that severing hospitals from universities would undermine medical education. Yet, evidence abroad shows the opposite. Where academic medical centres (AMCs) gain their own boards, budgets, and balance sheets, patient care and teaching often improve together.

A comparative study of leading AMCs discovered that teaching hospitals with robust governance and autonomous financing deliver better survival rates for complex cases.

However, the debate mirrors a wider ideological struggle. Market-minded reformers tout autonomy and efficiency, while public health traditionalists worry about equity. Ethiopia adds another twist: its university hospitals answer to the Education Ministry, while ordinary hospitals report to the Ministry of Health, breeding rivalries, duplicated paperwork, and incentives that collide.

Sadly, the price of this fragmentation is counted not only in Birr but in avoidable deaths.

A cure begins with clarity, though. Policymakers could establish joint boards drawing representatives from both ministries, alongside clinicians and community voices. Such bodies would give hospitals a single point of direction and scrutiny.

Financially, they would transition to a mission-based budgeting approach, allocating funds according to measurable clinical results, research output, and teaching quality, rather than historical line items. Hospitals could retain some revenue from paying patients and specialised procedures, cross-subsidising research and free care without undermining universal-coverage goals.

That, in turn, would let hospitals invest. Tikur Anbessa could replace geriatric radiology gear; Jimma could upgrade its laboratories; and Mekelle could rebuild war-damaged wards. The freedom to top up pay packets would help lure talent back home. Shared professorial appointments would preserve academic links, while students would gain richer bedside training in institutions no longer mired in crisis management.

Reform need not stop at the hospital gate. Ethiopia’s geography and patchy roads make regional health networks essential. Specialised centres should act as hubs, supporting district clinics through referral pathways and outreach.

Telemedicine pilots in Amhara and Oromia regional states already show promise. A consultant in Addis Abeba can guide a rural medic through a tricky caesarean section via video link. Scaling such schemes would spread scarce expertise more effectively and efficiently than building new tertiary hospitals in every province.

A unified health information system would let planners track disease trends, drug stocks, and workforce gaps in real time, matching resources with needs.

Community based health insurance (CBHI) is spreading; a national social health insurance (SHI) scheme is on the drawing board. Linking both to teaching hospitals would shield poor households from the shock of high-tech care and reassure policymakers that autonomy will not price out the vulnerable.

Satellite clinics, rotating surgical camps, and mobile diagnostic units could carry university know-how to remote districts.

Mandatory rotations would send junior doctors from university wards to rural health centres and back, fusing academic rigour with the gritty realities of primary care. Nurses, midwives, and technologists could join interprofessional programmes that blend campus learning with community postings. Such schemes would ease urban-rural divides and enrich curricula with practical experience.

Ethiopia faces the familiar double burden of infectious diseases and a surge in non-communicable health issues, such as diabetes, hypertension, and cancers. Teaching hospitals are natural laboratories for developing solutions, creating low-cost diagnostic kits, trialling treatment protocols tailored to local genetics, and conducting implementation science studies that demonstrate what works in resource-constrained settings.

Innovation funds embedded within autonomous hospital budgets would spur such work, with intellectual property returns shared between researchers and institutions.

The cost of doing nothing is clearer still. Starved of resources and shackled by bureaucracy, university hospitals will continue to haemorrhage staff and reputation. Patients who can afford to pay will flock to private facilities; the rest will languish in queues that stretch from the corridor to the courtyard.

Research output will wither, leaving Ethiopia to import medical advances instead of shaping them. Trust in public health institutions will erode, making it harder to rally society in future crises.

Two decades ago, Thailand granted its teaching hospitals semiautonomous status, coupling global budgets with strict quality metrics. Survival rates for neonatal emergencies and cardiac operations improved; faculty members no longer needed to hold second jobs. Kenya allowed Kenyatta National Hospital to set its own fees and pay scales in 2013, while retaining public oversight; brain drain slowed, and equipment downtime fell.

Ethiopia can adapt such models to its own federal structure and fiscal realities.

Suppose Tikur Anbessa Hospital controlled even half of Addis Abeba University’s budget instead of seven percent, and channelled half of that increase into staff remuneration. A modest pay rise of 30pc could retain senior specialists whose departure would cost the state far more in lost expertise and patient referrals.

Jimma’s budget share could rise to 20pc, funding a modern oncology ward that spares families a 300Km journey to Addis Abeba. Freed from month-to-month begging, administrators could sign multi-year procurement contracts, thereby trimming drug prices by volume and avoiding last-minute emergency purchases that inflate costs.

Hospitals can manage themselves within guardrails that keep them public-spirited. Autonomy is not an ideological luxury. It is a practical necessity if Ethiopia is to meet its ambitious targets for universal health coverage by 2030. The alternative is a slow slide into irrelevance for institutions that should be leading the charge against disease.

Ethiopia’s teaching hospitals began as classrooms with beds. They have grown into the backbone of tertiary care, yet their skeleton remains academic. Disconnecting their budgets and governance from academia would let them walk tall. That, in turn, would strengthen the wider healthcare service on which more than 100 million citizens depend.

 

The Language of Political Control

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Language shapes our thinking and perception of the world and, consequently, what happens in it. That is why I worry less about the troubling state of the world nowadays than about the words we use to describe it.

For example, we use the word “war” to describe a phenomenon that exists independently of our term for it. But if we consistently describe and perceive the world as hostile, it tends to become so. By the same token, declaring that we are on the verge of World War III, as many do nowadays, could become a self-fulfilling prophecy.

I first started contemplating the impact of evolving language on thought in the 1970s, after reading George Orwell’s essay “Politics and the English Language.” At the time, I was struck by the increasing vagueness of our political language. Writing in 1946, Orwell noted that the harrowing events of his time – the mass atrocities of Nazism, Soviet communism, and the atomic bombings of Hiroshima and Nagasaki – necessitated the use of doublespeak as a numbing agent.

“Political speech and writing,” he wrote, “are largely the defence of the indefensible.”

As an example, Orwell cited the euphemistic terms “transfer of populations” and “rectification of frontiers,” used to describe the forced relocation of millions of people.

Orwell viewed such euphemistic absurdities as a disease of democracy.

“When one watches some tired hack on the platform mechanically repeating the familiar phrases,” he wrote, “one often has the curious feeling that one is not watching a live human being but some kind of dummy.”

By the 1970s, many writers shared Orwell’s concerns about the deterioration of public language. Although the world had undoubtedly improved since the 1940s, the proliferation of euphemisms had intensified. Paul Johnson characterised this trend as the “effort of the well-meaning to avoid hurting others’ feelings.”

Why, I wondered, have we become so sensitive?

The vagueness of public language has markedly increased over the past few decades. Consider, for example, the Royal Society of Arts’ aim to foster a “resilient, rebalanced, and regenerative” world, or Ian Hogarth’s commitment, as head of the UK government’s AI Foundation Model Taskforce, to forging a “nuanced” policy that “manages downside risks while protecting the upside of this technology.” Such mission statements raise the question.

Are public-communication professionals handed playbooks filled with the right adjectives, acronyms, and stock phrases to construct sentences “tacked together like sections of a prefabricated henhouse,” as Orwell described them, or do they simply imitate what they perceive as industry best practices?

In his dystopian novel “1984”, Orwell explores how manipulating language can control thought, thereby rendering “thoughtcrimes” impossible. To be sure, Big Brother’s telescreens, successors to Jeremy Bentham’s panopticon, represent a technologically advanced form of surveillance foreshadowing today’s ubiquitous CCTV cameras. But Orwell’s greatest contribution to dystopian literature was not his depiction of the modern surveillance state, but rather “Newspeak”. If everyone used only the words sanctioned by Big Brother, laws and surveillance would become redundant.

Winston Smith, the novel’s protagonist, is tasked with rewriting history. His duties include altering yesterday’s news stories to conform with the latest policy shifts, removing outdated inscriptions, statues, memorial stones, and street signs, and burning old books. Meanwhile, his colleague Syme is responsible for “destroying [hundreds of] words” every day or translating them into Newspeak, the only language “whose vocabulary gets smaller every year.”

As Smith explains, “In the end, we shall make thoughtcrime literally impossible, because there will be no words in which to express it.”

Orwell regarded the purification of thought through language as a hallmark of totalitarianism. But as the “cancelling” or shaming of individuals for using “inappropriate” language shows, even democracies are not immune to such practices. In his 1978 novel “1985”, the British author Anthony Burgess observed, “If I, a writer, use words that betray even grammatical discrimination, I am in danger of legal punishment.”

While much of today’s language policing represents a deliberate attempt at social engineering, this is only part of the story. What we are facing is not state-generated Newspeak, but rather a politically correct vocabulary that has emerged from the mechanisms of liberal democracy itself. In “Democracy in America”, Alexis de Tocqueville warned against the unchecked power of the majority in a society free from traditional constraints and dedicated to equality. In traditional societies, he noted, “few new words are coined, because few new things are made.”

By contrast, democratic countries embrace change for its own sake, a characteristic evident not only in their politics but also in their language. Tocqueville observed that such societies tend to assign grandiose titles to modest occupations, apply technical jargon to everyday items, alter the meanings of words to make them ambiguous, and replace idiomatic expressions with abstract ones.

He states: “I had rather that the language should be made hideous by words imported from the Chinese, the Tartars, or the Hurons, than that the meaning of words in our language should become indeterminate.”

Unlike the largely homogeneous American society Tocqueville described, the tyranny of the majority does not drive today’s linguistic excesses. Instead, they are initiated by minorities, or lobbies claiming to speak for them, seeking “equal recognition” for their inherent or chosen identities. This shift imposes a moral obligation on outsiders to use language that avoids causing “mental distress” to members of these minority groups.

Democratic governments begin to regulate language to prevent distress from escalating into political disorder. Consequently, the category of “hate crime” has been introduced into the statute books. But the biggest problem with today’s democratic rhetoric is its tendency to frame international relations in moral terms, dividing the world into “good” and “bad” countries. While this dichotomy might boost morale, it impedes efforts to achieve global peace.

As the British historian A.J.P. Taylor famously observed, “Bismarck fought ‘necessary wars’ and killed thousands; the idealists of the twentieth century fight ‘just’ wars and kill millions.”