New Pharmacy Rules Promise Order But Threaten Survival of Small Businesses

Posted on May 18, 2025May 23, 2025 by Digital Editor

In a sweeping move that has triggered applause from regulators and alarm among small operators, the federal government has rolled out new national pharmacy standards, ushering in stricter operational guidelines that redefine everything from infrastructure to location criteria.

Issued by the Institute of Ethiopian Standards (IES), the latest rules stipulate detailed requirements covering everything from the minimum floor space and equipment pharmacies can have to staff qualifications and precise distancing measures from other health-related establishments.

The new guidelines, enforced by the Ethiopian Food & Drug Authority (EFDA), require pharmacies to have designated areas for dispensing, counselling, compounding, and storage. They should also maintain a dedicated drug information centre of 12Sqm. The total operational space should now be at least 50Sqm, a considerable increase that surpasses what many smaller pharmacies currently manage.

Pharmacies should be located 100 metres away from hospitals, clinics, health centres, and other pharmacies, except those operating within health facilities. They should maintain the same distance from potential contamination sources, including public toilets with leakage problems, garages, chemical plants, grinding mills, gas depots, waste disposal sites, and industrial sites that produce dust, smoke, or excessive heat.

According to Wendu Ketele, the Authority’s executive director for branch coordination, these measures were prompted by concerns from the World Health Organisation (WHO), which had noted the absence of a uniform national pharmacy standard during a review of Ethiopia’s regulatory systems.

“This was a long-overdue measure to harmonise pharmacy services across the country,” Wendu told Fortune. “Uniform standards help protect patients, guide professionals, and improve access to medicines.”

However, the implementation has caused anxiety among small pharmacy operators who say these standards do not reflect their realities.

For many, finding a suitable location that complies with these requirements is nearly impossible, and when one is available, the costs are often prohibitively high. Pharmacy owners, crucial parts of the healthcare system, express concerns that many may struggle to remain open under the new regulations.

Dagmawi Wondwosen operates a small pharmacy near the Meskel Flower neighbourhood and views the new regulations as a direct threat to his business. With monthly rents in central areas already reaching 60,000 Br, meeting the new space requirements presents an enormous financial burden.

“It’s pushing us out of the market,” Dagmawi said. “The standards may look good on paper. They don’t reflect economic reality.”

Mehari Goytom, who has operated a pharmacy in the Jemo area for nine years, criticises the 100-meter distance rule as particularly troubling.

“Our customers are patients, people coming out of clinics and hospitals,” he told Fortune. “It makes no sense to push pharmacies away from the very places where they’re needed most.”

Existing pharmacies have been given a two-year grace period to adapt to the changes, providing some temporary relief from immediate disruption.

Wendu insists the standard is both essential and thoughtfully developed. He pointed to studies on average pharmacy sizes and layouts, arguing that the new rules reflect these conditions.

The financial implications of the new requirements extend beyond rental costs. Pharmacies are now obligated to provide changing rooms, administrative offices, toilets with running water, and patient waiting areas. These demands raise the entry costs for new pharmacies and the ongoing operational expenses.

Despite these, some pharmacy owners recognise potential benefits.

Emawaysh Tefera, who has 14 years of experience and owns Tsedey Pharmacy in Jemo 1 neighbourhood, sees the regulation protecting her business from market oversaturation.

“There’s no pharmacy near me right now,” she said. “If someone wants to open one, the 100-meter rule protects my business.”

However, Emawaysh remains concerned that regulators might have underestimated the economic pressures imposed by the new standards.

Approximately 618 pharmacies are operating nationwide, with a 12.3pc increase from 2023. More than half of these are located in Addis Abeba, which saw an 11.88pc increase during the same period. The pharmaceutical sector is witnessing steady growth, with projected revenue reaching 476.89 million dollars in 2025 in the pharmacy market.

Experts remain divided over the regulation’s potential impact. Sisay Endale, a lecturer at Addis Abeba University who also trains pharmacists on compliance with EFDA rules, believes the rules are a crucial initial step in raising industry standards.

“This is a starting point,” he said, encouraging pharmacy professionals to focus beyond immediate commercial impacts. “If challenges emerge, the policy can evolve.”

Dula Desalegn, a 15-year pharmacy lecturer at Jimma University, takes a more critical view. While supportive of national standards, he advocates for gradual implementation.

“The rollout should be gradual,” he urged. “If someone in the emergency room can’t get needed medicine, they shouldn’t walk 100 meters to find a pharmacy.”

Nonetheless, EFDA remains firm in its position. Wendu argues the rules prevent unhealthy clustering and ensure fairer access to pharmacy services.

“Pharmacies are part of the healthcare system, but they’re also businesses,” he told Fortune. “Overconcentration distorts competition and accessibility.”

The regulations are already in effect for new pharmacy licenses, while notification efforts are underway for existing operators to comply within the two-year grace period. The Authority’s officials believe these measures will improve service delivery and enable consistent nationwide oversight once fully implemented.

Addis Abeba’s New Policy Makes Landlords Tax Watchdogs

Posted on May 18, 2025May 23, 2025 by Digital Editor

A new measure from the Addis Abeba Revenue Bureau (AARB) makes commercial landlords partly accountable for their tenants’ unpaid taxes, an attempt to plug revenue leaks and prevent alleged tax evasion. But the move has raised a red flag for property owners who now find themselves thrust into a quasi-regulatory role, alarmed by murky legal obligations and strained relationships with tenants.

“Some business owners habitually evade tax obligations by relocating operations and re-registering under new licenses, often in the names of relatives,” said Sewnet Ayele, head of communications at the Bureau. “When we investigate tax issues, we usually find the property owner, not the tenant.”

According to Sewnet, the Bureau’s latest push seeks to recover more than 10 billion Br in outstanding taxes from the previous fiscal year. So far, only six billion Birr has been collected.

Sewnet stated the role of public participation in the enforcement effort.

“Failing to report tax evasion is tantamount to cooperating with a criminal,” he said. “Offenders could face fines or even imprisonment under the tax law. Ultimately, property owners bear the responsibility. Property owners renting to businesses must ensure tenants settle their tax dues before vacating.”

The policy shift, however, has ignited considerable concern among property owners.

Belayneh Desta, who owns about a dozen rental properties at various locations, regularly supervises his tenants to ensure the properties are clean and compliant with regulations. For him, cooperation with tax authorities is both a civic duty and a way to protect his financial interests. However, he does not recall issues with unpaid taxes, for his tenants have generally been reliable to him.

“I supervise the shop to ensure the safety of the premises,” Belayneh told Fortune. “I pay my taxes on time, and so do most of my tenants, though there are a few exceptions.”

Belayneh agreed that providing information to the Bureau is essential, but argued that monitoring taxpayers should remain the Bureau’s responsibility. While acknowledging the necessity of cooperation, he worries about the practical challenges landlords often face when tenants leave unexpectedly.

Others view the measures as burdensome and unfair.

Tedla Asmamaw, who manages a building with 20 tenants on Cameroon Street near Bole Brass, argued that the policy unfairly transfers responsibility from the Revenue Bureau to property owners.

“Tenants have an agreement with the Revenue Bureau, not me,” Tedla told Fortune. “Until now, we were not expected to monitor their tax status. It places an undue burden.”

He fears this measure could strain relationships with tenants who had never experienced such scrutiny.

Property owners often found themselves vulnerable when tenants failed to secure tax clearance, holding them accountable for liabilities they never incurred. The old system applied broadly to various transactions, including Code 2 vehicle transfers, unfinished residential or commercial properties, and vacating leased spaces. Criticism mounted over the years, citing the lack of transparency and the frequent disruptions to legitimate property and vehicle transactions.

Bureau officials issued a new circular last week to address these concerns and refined the tax clearance requirements. Under the updated guidelines, only taxpayers with tax obligations unpaid for more than a month will require clearance. While legal extensions are possible, compliance remains mandatory.

“This change is long overdue,” said Dawit Kejela, a private tax advisor and former auditor at the Ministry of Revenues. “Expecting landlords to ensure tenants’ compliance was punitive and detached from how tax obligations are defined. Income generation, not tenancy, should be the basis.”

To reduce manual bottlenecks and replace the outdated clearance system, the Bureau has started deploying an integrated digital platform working in partnership with the Land Development & Administration Bureau and the Driver & Vehicle Licensing & Control Authority. The new digital system links tax records directly to ownership and tenancy databases, allowing authorities real-time monitoring capabilities.

“This is not just a service tool, it’s a digital monitoring platform,” Sewnet said.

Once a taxpayer falls behind by more than a month, the system flags them. Until dues are settled, services such as title deeds transfers or vehicle registrations will be suspended. However, Sewnet acknowledged that the previous setup had numerous shortcomings, including delays and technological inefficiencies.

“The updated system was developed rapidly to address these issues,” he told Fortune.

However, small business operators remain sceptical.

Bisrat Temesgen, a café owner on Djibouti Street (near Awraris Hotel) who recently closed due to financial difficulties, questioned the system’s responsiveness.

“I paid my taxes, but I’ve been waiting six months for a clearance,” he said. “There is no transparency in the delay. Paying doesn’t seem to guarantee anything.”

Biruk Nigussie, a tax expert with 15 years of experience at the Ministry of Revenues, attributed delays mostly to audits and the complexities of large asset transactions. He noted that individual taxpayer clearances proceed quickly unless complicated by arrears or corporate issues.

“The new system streamlines that,” Biruk said. “But, its success will depend on enforcement.”

Biruk believes clarity in policy enforcement is critical. He argued that people are more inclined to comply when obligations are clearly defined and enforcement encourages cooperation rather than coercion.

“The Bureau has legal grounds to involve landlords,” he told Fortune. “But vague proclamations can overwhelm compliant taxpayers and invite unintended consequences.”

Federal Tax Tribunal to Extend Wings to Regional Capitals

Posted on May 18, 2025May 23, 2025 by Digital Editor

The Federal Tax Appeals Commission is preparing to open regional branch offices next year in the Amhara, Oromia, and Sidama regional states, a move hoped to ease the long-standing logistical and financial burdens taxpayers face when contesting tax and customs assessments.

Mulugeta Ayalew, president of the Commission, announced the initiative during a press conference held on May 15, 2025, at the Commission’s headquarters in Alsam Cheleleke Tower on Chad Street. The announcement marks a major operational shift for the quasi-judicial body, which was established under the Federal Tax Appeal Tribunal Establishment Proclamation of 2001.

Designed to serve as the primary platform for tax and customs disputes, the Commission currently operates solely from the capital. However, under the law, it is mandated to expand nationally, an option now being exercised, albeit two decades late.

Taxpayers outside Addis Abeba have long decried the arduous journey to pursue their appeals, often incurring prohibitive travel and accommodation costs, compounded by procedural opacity and repeated delays.

A corn and sesame farmer from near Bahir Dar, in Amhara Regional State, who requested anonymity, recounted spending over 100,000 Br on multiple trips to the capital to dispute a tax assessment. Another taxpayer, Haymanot Tafere, a poultry farmer based in Hawassa, has made nine trips to Addis Abeba since initiating her appeal four months ago, each trip costing her over 3,500 Br in travel and lodging, excluding income lost from business disruption.

“The local federal tax appeal office in Hawassa would dramatically streamline the process,” she told Fortune, voicing frustration over unclear documentation requirements and a lack of administrative guidance.

In the third quarter of the current fiscal year, the Commission received 818 new appeals, bringing its case load to 1,144. It decided on 686 cases, 210 involving revenue disputes totalling 1.79 billion Br and 476 customs-related cases amounting to 1.8 billion Br. Together, they represent 3.59 billion Br in contested tax liabilities.

While 691 cases were heard during the quarter, 458 cases remained unresolved, and 356 were escalated to the High Court.

The Commission disclosed that a 120-day processing period is needed, extendable to 180 days for complex cases. Yet, delays are reportedly widespread. A procedural issue remains the upfront deposit requirement: 75pc of the assessed tax or the previous year’s tax liability, whichever is less, but not below the declared income. For first-time filers, the full declared tax should be deposited; for sales and excise disputes, 50pc is required.

Legal experts and practitioners caution that physical decentralisation alone may do little to address the system’s entrenched inefficiencies.

“Merely opening branch offices won’t solve the fundamental issues,” said Ketema Adane, co-founder and partner at Ethio-Alliance, a firm specialising in tax and corporate law.

He identified the absence of taxpayer support mechanisms, such as legal guidance and procedural clarity, as a major barrier. According to Ketema, these gaps lead many to abandon valid appeals or escalate unresolved cases, further burdening the judicial system.

He advocated for a two-pronged reform: procedural simplification and technological integration. He argued that introducing virtual hearings would reduce the case backlog and enhance accessibility for remote appellants.

“Unless these offices open promptly and offer comprehensive support mechanisms, their impact may be limited,” Ketema said.

Tourism Ambitions Hit Roadblocks as Violence, Red Tape Undermine Recovery

Posted on May 18, 2025May 20, 2025 by Digital Editor

The tourism sector, battered by security risks, bureaucratic slowdowns, and infrastructure gaps, is struggling to regain its footing despite promising signs of recovery. In an address to federal legislators, Selamawit Kassa, minister of Tourism, presented a mixed picture of the industry’s performance over the past year. Her report balanced tempered optimism and a sober accounting of persistent setbacks.

A former journalist, Selamawit spoke with characteristic frankness, acknowledging shortfalls in meeting key targets while defending the Ministry’s efforts during rising economic and political uncertainty.

“We’ve made some progress, but there is much more to do,” she told lawmakers last week.

The numbers unveiled both traction and trouble. The Ministry registered 148 new tourism-related investments, an impressive figure, though below the 175 forecasted. Official data claims tourist arrivals hit 942,000 last month, marking a nine percent increase over the same period a year ago. But this uptick still fell short of the one million visitor target set by the Ministry. The authorities report tourism revenues came in at 3.5 billion Br, underperforming by about 200 million Br compared to the projected amount.

Part of the government’s strategy has been to leverage heritage and cultural tourism, promoting museums and historical sites as key draws. One major initiative sought to attract 1.5 million people to the country’s national museums. But the goal remained unmet. The Ethiopian Heritage Authority reported a shortfall, with only 60pc of the attendance target achieved. According to the figures, national museums hosted 584,460 visitors, while regional heritage programs brought in an additional 311,573 people.

Restoration efforts, another pillar of the Ministry’s agenda, remain incomplete. Work on six key heritage sites, including the Dire Dawa Rail Terminal, the National Museum, and the former residence of renowned artist Afework Tekle, was just 58.6pc completed by year-end. Even more troubling, only seven of the 24 artefacts slated for repatriation were returned to Ethiopia.

Abebaw Ayalew (PhD), director of the Ethiopian Heritage Authority, was candid on some of the obstacles.

“Experts were kidnapped in conflict areas,” he said, referring to fragile regions such as Wag Hemra and the Lake Tana basin, particularly in the Amhara Regional State.

He also pointed to the complexity of cultural repatriation efforts, which often involve difficult diplomacy and intricate legal proceedings that defy fixed timelines.

Staffing shortages across critical departments compound these challenges. The Ministry’s infrastructure, quality control, and promotional divisions remain understaffed. Legal disputes over wildlife rights, filming permits, and fee collection further slowed progress. Conservation efforts suffered as well, impeded by conflict and funding constraints.

The Ethiopian Wildlife Conservation Authority, under director Kumera Wakjira, disclosed that deadly encounters between humans and elephants led to the death of 13 people and 12 elephants last year.

“Compensation is beyond our budget,” the authority said.

They attributed much of the problem to poaching, which has disrupted animal habitats and driven elephants into populated areas. Veterinary outreach efforts also fell short. Of the 200,000 livestock vaccinations planned, only 54,932 doses were delivered.

Environmental restoration has fared no better. The Ministry planned to rehabilitate 500hct of land but managed to restore barely a fifth of the target. The reasons were familiar, including limited funding and competing land demands. In Gambella Regional State, violent clashes over land designated for tourism investment left six people dead. Investment also encroached on 200hct of protected land in Babile. In the Omo Valley, efforts to reclaim 30,000hct have stalled. Only Bale National Park saw modest progress, with just 15hct rehabilitated.

Still, Selamawit held firm in her belief that the sector’s long-term prospects remain bright. She pointed to a 40pc increase in tourist arrivals compared to pre-pandemic levels in 2019 as evidence of underlying momentum. Globally, international travel jumped 11pc in 2024, reaching 1.4 billion. Africa, for its part, attracted 74 million tourists.

According to the Minister, one of the more persistent external threats to tourism is the wave of travel advisories issued by foreign embassies. These warnings, she said, deterred visitors. Her Ministry has begun hosting guided tours for foreign diplomats in an effort to soften the country’s image abroad.

Domestically, new fire safety regulations imposed by the Addis Abeba Fire & Disaster Risk Management Commission have triggered backlash from hotel owners. The reforms, which sought to reduce fire incidents by over 70pc, are proving costly to implement.

Fetih Woldesenbet, president of the Ethiopian Hotel Employers Federation, called the new rules impractical and burdensome.

“The necessary equipment is hard to find,” he said. “Veteran hotels, especially, are at a disadvantage.”

Many older structures now require partial reconstruction to meet the standards.

Fetih also advocated for designated hotel zones in municipal planning, arguing they could streamline regulatory processes and encourage compliance. The rising cost of fuel and frequent power outages have only worsened the situation. Hotels that invested in backup generators now face problems sourcing fuel and absorbing steep energy costs. Infrastructure bottlenecks continue to undermine operations.

Lawmakers were unimpressed.

Asha Yahya, chair of the Standing Committee on Trade & Tourism, questioned the Ministry’s sluggish pace in infrastructure development, inability to attract foreign direct investment, and poor record on illegal hunting and heritage site renovations. She also cited the acute shortage of skilled personnel.

In defence, the Ministry’s officials cited ongoing collaborations with the Ethiopian Roads Authority and Ethio telecom to address core service gaps and improve access to tourism zones.

Beyond Addis Abeba, hotel operators face similar regulatory and infrastructure constraints. Many regional governments lack local offices to certify fire safety compliance, placing the burden on business owners to travel long distances or proceed without certification. Fetih warned that without affordable regulatory solutions, growth in the hospitality sector would grind to a halt.

In regional states like Sidama, the potential is clear but largely unrealised.

Abebe Marimo, deputy head of the Sidama Tourism Bureau, acknowledged gaps in infrastructure and service quality. According to him, the region welcomed roughly three million tourists over the past year, almost all domestic, but revenues have remained flat. Total earnings over the last nine months were 2.9 billion Br.

“We plan to double revenue in four years,” he said.

However, poor road access continues to constrain growth. Only two of the 25 new hotel projects launched in Sidama Regional State are by foreign investors. Their combined estimated worth is around 30 billion Br. Major international brands, including Hilton and Sheraton, are reportedly among those in early-stage talks.

Tourism expert Shiferaw Muleta, an associate professor at Addis Abeba University, placed the blame for falling foreign investment squarely on deteriorating security. Once concentrated in the country’s northern regions, tourism flows have shifted southward, following relative calm. But the South is underdeveloped.

“The industry has high resilience,” Shiferaw said, citing its rebound from COVID-19 disruptions.

He remains confident that tourism could recover swiftly with a return to peace.

The Ministry’s annual report, despite its aspirational tone, offered a stark assessment: chronic underfunding, regulatory friction, staffing woes, land disputes, and security concerns continue to hold the industry back. Yet Ethiopia’s natural and historical assets remain a powerful draw. Whether the country can translate that promise into sustained growth depends on how quickly it can align its policies, secure peace, and rebuild the confidence of tourists and investors alike.

Germany Champions Reforms While Industrial Model Faces Global Stress Test

Posted on May 18, 2025May 23, 2025 by Digital Editor

Jens Hanefeld, Germany’s envoy in Addis Abeba, touched down last September with a resume that mixes three decades of diplomacy, a decade running Volkswagen’s global lobbying shop and the trained eye of a historian. Serving as ambassador to Ethiopia and Berlin’s permanent representative to the African Union (AU), he oversees a diplomatic mission marking 120 years of formal ties with Ethiopia while setting foot in Africa for the first time.

In an interview with Tamrat G. Giorgis, managing editor, the Ambassador dismissed talks that Europe’s export powerhouse is in permanent decline. Inflation, he noted, has eased to 2.1pc, even if growth is flat. He believes the new government under Chancellor Friedrich Merz’s coalition has room to kick-start the economy by trimming the civil service by eight percent and unleashing “the Mittelstand,” the small, specialised firms he credits for Germany’s engineering edge. Deregulation, not dirigisme, will restore Germany’s lead in the European Union, despite the looming 2035 ban on combustion engines and a shortage of battery metals.

In Ethiopia, the Ambassador struck a warmer tone. He praised the government’s “home-grown” reforms, from a new foreign-currency regime that lets investors repatriate dividends to broader macro fixes the IMF has welcomed. He sees big promise in green energy, pointing to hydropower that could feed a global appetite for clean hydrogen. He called the long waits for Ethiopian visa applicants to Europe a temporary European Union tool, improving cooperation on returning migrants. Development aid, re-routed during the northern war, is still flowing, he said, cushioning the pain of reforms and shoring up the Pretoria peace deal.

The envoy often reaches back to history. He recalled that Germany merged NATO and Warsaw Pact forces after 1990, proving that adversaries can forge a single army when compromise is genuine. He said Berlin prefers quiet persuasion to “megaphone diplomacy” on human rights, but it does expect progress on transitional justice, a freer press and credible elections. If, in two or three years, he can point to deeper German investment, steadier peace and Ethiopian children thriving at the 70-year-old German Embassy school, Ambassador Hanefeld will count his tour of duty a success.

Fortune: I understand that the new government faces two critical economic issues. One is the stagnation of the German economy and the rising cost of living, which many pundits attributed to the outdated model of German growth after the Second World War, where the economy is essentially based on exports. With many things changing since WWII and the ongoing geopolitical realignment in the world, where the liberal order has become more protectionist with the tariff war, do you believe that the new government, continuing with the old model, will be sustainable?

Ambassador Jens Hanefeld: You touched upon the complicated situation we currently face in the world, and this is indeed an issue that all economies must grapple with. However, I have to beg to differ a little with your question. While Germany has indeed had a period of sluggish growth for the last three years, the rise in the cost of living is not that much of a problem at this point. We currently see an inflation rate of around 2.1pc, which is not overly alarming.

While the cost of living is naturally something to keep an eye on, I believe the bigger issue is economic growth.

We have a new government with a strong mandate for reform. Chancellor Friedrich Merz’s statement this week outlined a very ambitious plan to address this, and I am optimistic that Germany will return to its traditional position as an economic powerhouse in Europe.

Q: Do you think Germany can look within instead of anchoring its economic model on outside markets?

Germany has always very much relied on skills for its economic model. We do not have many natural resources in the sense of raw materials. We are dependent on open trade and open borders — engaging with the world — while fundamentally depending on the skills and expertise of our people.

One of Germany’s particular economic strengths has always been its culture of small and medium enterprises (SMEs). These firms, sometimes known only within very specialised fields, often emerge as world leaders in their niches, particularly in machinery and, increasingly, new technologies.

What we now see, and what the new government has been adamant about, is a protracted policy of deregulation and cutting back on state intervention. Among the coalition’s commitments is an eight percent reduction in the public sector over the coming four years, a strong signal that the government intends to allow the private sector the necessary breathing space for innovation.

Q: Germany has generated close to one billion euros in business and investment for Ethiopia since 1964. But, German companies that have invested and are doing business in Ethiopia are no more than 30. Why is Germany not one of the major trading partners compared to newer arrivals like China or Turkey?

We should be careful when comparing across such a historical timeline. Ethiopia has undergone numerous political transitions, from monarchy to communist rule to its present system, each profoundly affecting the business climate.

Nonetheless, there is certainly room for improvement in foreign investment. Ethiopia has tremendous potential, particularly in green energy, where it can leverage abundant, CO-neutral power, something highly valued abroad and by Germany. Our task now is to work together to create a business environment that instils confidence in both foreign and domestic investors, ensuring they experience Ethiopia’s reforms as credible and sustainable.

Q: Last August, a major policy decision was made to liberalise the forex regime. Are you happy with the progress made since then?

The progress in macroeconomic reform – much more than liberalising the forex regime – has been truly impressive. The term “homegrown economic reform” signals strong national ownership, and not something imposed from outside. From my conversations, there is widespread appreciation for the speed and commitment to these reforms. Of course, there is room for improvement, but maintaining the course is critical.

Through our development cooperation, we also seek to alleviate any hardships these reforms might impose on parts of the population, reinforcing social stability alongside economic adjustment.

Q: However, in practice, the forex market operates as a managed floated currency regime rather than the full liberalisation it has been promised.

From our perspective, the system has been liberalised. We see how most banks adjust the exchange rate according to demand and offer. The fact that foreign companies can now transfer dividends out of Ethiopia demonstrates that the mechanism is functioning. It was understood from the outset that it would not operate flawlessly overnight. Nevertheless, I am impressed by its performance and echo the IMF’s positive assessments.

Q: You consider Ethiopia a peace anchor in Africa, yet insurgency persists in regional states like Amhara and Oromia, and the Electoral Board dissolved the TPLF, casting doubt on stability. Could these developments prompt Germany to reconsider its views of Ethiopia’s status as a regional anchor?

Germany values national reconciliation and a peaceful political system that includes all stakeholders. We fully support the Pretoria Agreement and commend Ethiopia’s partners, including the African Union, for facilitating this peace framework.

Germany is committed to backing Ethiopia — politically and financially — through next year’s elections, ensuring broad representation and internal stability.

Q: Speaking of reconciliation, Germany suspended development aid after the 2020 civil war in the north and stayed until the Pretoria Agreement was signed. There’s a lot of talk about national dialogue but less about justice and accountability for crimes and atrocities committed during the war. Why the quiet on accountability?

Let me clarify that we did not stop our development cooperation after the outbreak of the war but we shifted our efforts to support the Ethiopian people directly. We believe in the importance of transitional justice and have consistently designated it as a key priority within our EU and bilateral support frameworks. Ultimately, Ethiopians must agree on and implement their own mechanisms for justice and reconciliation. We stand ready to support these efforts. The pace of transitional justice is a matter for domestic judgment, but from our view, there is room to accelerate processes without undermining local ownership.

Q: The EU’s “Jobs Compact” was designed to provide opportunities to reduce migration pressures. How do you see its effectiveness?

The Jobs Compact, which has come to an end, has largely achieved its initial goals, particularly in responding to the COVID crisis. We are cooperating closely with Ethiopian authorities on the longer-term migration management.

Germany believes in qualified, regulated migration rather than unregulated flows., we are designing frameworks that offer clear and legal pathways for skilled workers. Public sentiment around migration is highly charged, but by focusing on skills and legal channels, we plan to address both economic needs and societal concerns.

Q: The EU recently imposed a 45-day delay on visas from Ethiopia to Schengen states due to unsatisfactory cooperation on returns. There is a widely held public misgiving over this issue.

This is a European issue, not a bilateral one, but I can explain the facts. The extended visa processing time – not an impediment to travel – reflects challenges in the return process for Ethiopians residing irregularly in Europe. Ethiopian authorities are taking steps to improve cooperation, and we are monitoring progress to ensure the measures remain temporary.

We address this in the spirit of partnership, ensuring it does not become a lasting impediment to EU–Ethiopia relations.

Q: However, public opinion in Ethiopia views the visa delay as unfair, affecting many individuals unrelated to the issue.

It is important to note that the delay does not reduce the number of visas issued; it only extends the processing time to 45 days. While I understand the inconvenience, we are seeing constructive steps from Ethiopian counterparts, and I expect the situation to normalise.

I believe clear communication about the temporary nature of this measure is essential to allay public concerns.

Q: Germany champions a global green hydrogen economy, while Ethiopia anchors its industrial strategy on hydropower (GERD). Where does Germany’s strategic support lie between small-scale renewables and large hydro projects?

Germany’s primary commitment is to reduce CO under the Paris Agreement. Hydrogen became a strategic focus after Russia weaponised energy supplies with its war of aggression against Ukraine. Ethiopia’s hydropower success is remarkable because the green electricity share here is among the highest globally.

We support all renewable energy projects that reduce carbon emissions, respecting each country’s sovereign choices while encouraging best practices.

Q: Does Germany’s domestic energy policy dictate support for similar projects abroad?

Ultimately, each country makes its own energy decisions. Germany advocates global climate commitments and encourages partners to meet their CO targets. We provide technical and financial assistance where it aligns with these shared goals.

Our role is to facilitate, not prescribe, respecting national sovereignty while promoting international cooperation.

Q: The EU has mandated the end of combustion engines by 2035. Germany’s automotive industry, long dependent on engineering expertise, seems less aggressive than China or the US in EV adoption. Why?

The situation is complex. For probably a century, the German automotive industry has relied primarily on its engineering expertise in the construction of combustion engines. The shift towards emission-free mobility is obviously a challenge for a country that lacks raw materials.

We have to bear in mind that the normal engine in a combustion engine vehicle, for example, consists of up to 4,500 parts. This is quite an engineering feat. The engine in an electric vehicle consists of less than 400 parts in most cases, and the value-added component of the battery makes up a far higher share in an electric vehicle than raw materials do in a combustion engine vehicle.

For a country with few raw materials and an engineering-based industry like Germany, transitioning to a propulsion technology, which essentially needs a high volume of raw materials sourced elsewhere, including all the necessary transitions to the business model, presents a challenge.

I would not say that we see a crisis or anything but a transition, which is fundamental to a key industry in Germany. But at the same time, it is not as if the German industry is failing in this field, quite on the contrary. I am convinced that the German car industry will continue playing a very strong role in our industrial base.

Undoubtedly, it took the German car industry a while to adapt to this. They have a proven business model that is still very successful worldwide. At the same time, German carmakers, while perhaps a little hesitant initially in adopting new technologies, have now wholeheartedly embraced them and are increasingly becoming world leaders in this field as well.

Q: Will Germany meet the 2035 deadline?

The 2035 combustion-engine ban is EU law. Member states must comply, and I am unaware of any plans to amend it. If adjustments become necessary, they will be debated within the EU framework. For now, all signs point to Germany meeting its legal commitments.

Q: Considering Germany’s historically high national saving rates, which encourage domestic banks to channel household savings into foreign investments, can Germany restructure its financial sector to stimulate domestic innovation and entrepreneurship instead?

I think Germany has something like a 10pc savings rate. This puts us a lot higher than other countries, but we are not the highest. I think the savings rate is a stabilising factor in many ways, including domestic spending and expenditures, as well as the credit rating of the country as a whole.

The new government has made it clear that it intends to ensure regulations, which will incentivise increased investment by private investors. Given the financial requirements, we will also have to carefully follow what will happen to the international bond markets.

I have been working in both the public sector and in industry for a number of decades. The question of whether Germany’s share of industrial production is an asset or a liability has been hotly debated and remains controversially discussed numerous times. There was a time when people believed it was an old economy. Then there was a time when people said, “Oh, thank God they have that because you still have the jobs.”

We have seen a back-and-forth discussion on the respective advantages and benefits of being a service, digital, or the more traditional concept of industry. At the end of the day, you need to find a balance that reflects your national interest.

One of the things which we have definitely discovered, and I think we’re not the only ones, is that a more traditional industrial base tends to provide very well-paying jobs. There is a strong interest everywhere in the world at this point in time to maintain this kind of employment, and I think Germany is well positioned for that.

Q: Given the debate on Germany’s industrial base (old economy) versus services and digital sectors, are you comfortable with the traditional manufacturing-led model?

Germany’s model, rebuilt after World War II, has proven its resilience and adaptability, often quietly led by family-owned SMEs. This model delivers high-quality jobs and sustained competitiveness. While the service and digital sectors are growing, industry remains a cornerstone. A balanced economy that preserves strong manufacturing while embracing innovation reflects our national interest.

Q: You’ve drawn parallels between Germany’s reunification and Ethiopia’s ongoing national reconciliation processes. Given your firsthand experience of German reunification, what specific, actionable lessons on reconciliation, trust-building, and security-force integration can Ethiopia realistically adopt from Germany’s model, particularly in light of Ethiopia’s ongoing difficulties in building a cohesive national army?

I think you are referring to my speech on our national day shortly after arriving in Ethiopia. I made two points in that speech.

One is indeed the need for national reconciliation. Germany, as a once divided country – which after all was on two sides during the Cold War – has learned quite a bit about national reconciliation and bringing people together, who have sometimes had very different experiences.

The concrete example is the fact that we are having the anniversary of the creation of the German armed forces this year. The German armed forces are a case in point because they integrated an army of the Warsaw Pact (the National People’s Army of East Germany) and that of NATO (the Bundeswehr of West Germany) into one new united force.

National reconciliation is never easy; it is hard. You have to work for it, commit to it, and compromise. It will never work without these. Germany’s experience showed genuine reconciliation requires commitment, compromise, and inclusive institutions.

Q: Could Germany ever impose preconditions (such as issues of human rights, press freedom, and democratic governance) for its engagement with Ethiopia?

Our relationship with Ethiopia is built on open dialogue and mutual respect, not unilateral preconditions. We address sensitive issues through diplomatic channels, encouraging constructive solutions rather than public ultimatums. Maintaining trust and partnership is more effective than imposing rigid external demands. Also, almost all of our humanitarian and development support directly benefits the people of Ethiopia.

Q: How much leverage do you believe Germany has in shaping Ethiopian policy decisions?

Ethiopia is a proud, independent nation with its own history and vision. Our influence is exercised through partnership and shared interests, not imposition. Diplomacy is about balancing respect for sovereignty with advocacy for common goals.

True leverage comes from demonstrating value as a reliable partner in areas like development cooperation, trade, and investment.

Q: To the time that you have spent here, what keeps you up at night about Ethiopia?

To be honest, nothing keeps me awake. All the interlocutors I have met are deeply committed to Ethiopia’s future. My hope is that Ethiopia continues to play a constructive role internationally at a time when the rules-based order faces challenges. Ensuring peace, stability, and a thriving economy will allow Ethiopia’s voice to be heard as a force for good.

Q: Are you not worried that Ethiopia is not yet able to resolve its violent conflicts?

I see many dedicated people working earnestly on reconciliation and peacebuilding. Conflict resolution is never easy, but commitment and dialogue are key.

Ethiopia’s geopolitical role, hosting refugees and combating terrorism, demonstrates its constructive engagement. Staying the course on reconciliation and inclusive governance remains the only viable path forward.

Q: It has been close to one year since you arrived here. How would you like to define your time serving in Ethiopia? Some ambassadors are more political, some more economic, and others focus on cultural affairs.

As a German diplomat, I am a civil servant, a career officer, and not a political appointee. I see my role essentially as serving the bilateral relationship between Germany and Ethiopia.

I try to support in whatever field is necessary, whether economic, cultural, or political. I do not see myself as the figurehead of change, but rather as an enabler, someone who provides support and sometimes guidance in the background. That, in essence, is how I would define my role in this post, a facilitator of cooperation who helps strengthen the longstanding ties between our two countries.

Q: How would you like to look back and understand your accomplishments after two or three years during your exit? What particular things would you like to have achieved?

I would be happy if the bilateral relationship between Germany and Ethiopia continued to thrive. We have a longstanding economic partnership, and there is room for improvement, particularly in stimulating foreign investment. I hope we will have proceeded further on Ethiopia’s path toward economic reform, building on the important steps taken last summer. I want to look back then on a flourishing cooperation in the field of culture and education; just to mention that the German Embassy school, where many Ethiopian children receive excellent education, is turning 70 this year.

One of the most significant achievements I would point to is national reconciliation and peace, which provide the groundwork for a prosperous future aligned with ongoing reforms. I also hope to see progress in the rule of law, transitional justice, and freedom of the press, issues that are crucial for sustainable development and international confidence.

Central Bank Tweaks Rates While the Birr Holds Its Breath

Posted on May 18, 2025May 20, 2025 by Digital Editor

The foreign exchange market had a telling week, and the story was all in the margins. Last week, the Central Bank nudged its official cash-buying rate from 130.47 Br to 132.17 Br for a dollar, a small but steady slide that reaffirmed the Brewed Buck’s continuing weakness.

The real issue, though, was in the gap between what the Central Bank paid for dollars and what it charged to sell them. That spread opened the week on May 12, 2025, at a roomy 2.39pc, retreated to a whisker-thin 0.01pc by midweek, and finished at 0.41pc six days later. In a market accustomed to rigid, predictable spreads, the whiplash unveiled that policymakers were tinkering with a new approach, perhaps testing how much wiggle room they have to manage liquidity without sparking panic.

Commercial banks had their average buying rate set at 131.79 Br, while the average selling rate was posted at 134.43 Br. The uniform spread between their buying and selling rates reveals an unwritten pact among bankers to shelter retail customers from daily volatility. Look closer, though, and the facade of solidarity begins to crack. Across those six days, the market’s composite figures came in lower, an average 128.73 Br on the buy side and 131.39 Br on the sell side, still about a two-percent margin but with notable dispersion behind the headline.

One point of convergence was the narrowing wedge between the Central Bank’s bid and the commercial-bank average. By May 17, the gap in buying rates had shrunk to 0.38 Br, while the selling rate was still more generous than the private banks’ mean. A tighter official spread lowers conversion costs for large trades and unveils a deliberate push to coax high-volume transactions back onto the books.

The week’s sharpest jolt came overnight between May 12 and 13, when the Central Bank bumped its buying rate by 2.32 Br to 132.79 Br. Such lurches are usually a telltale sign of stress, whether from import bills piling up, donor inflows lagging or hoarding by traders bracing for another depreciation. However, the Central Bank let the selling rate slip a bit, cushioning exporters who convert their dollar earnings. Policymakers swallowed part of the pain so that a sudden adjustment did not look like a rout.

That manoeuvre captures a broader dilemma. On one side stood a Central Bank willing to flex spreads, apparently as a fine-tuning tool linked to its bi-weekly foreign-exchange auctions. On the other side are banks that prefer calm to cleverness and leave their posted spreads untouched. The outcome is a dual-track system: cash counters at banks follow a rule book, while auction allocations to priority sectors dance to a different tune.

Experiments, of course, invite confusion. The midweek collapse of the spread to virtually nothing, and its rebound a day later, raised eyebrows in a market that prizes predictability. If players cannot guess tomorrow’s spread, they hedge harder or slip into the parallel market, where rates already trade at fatter premiums, now edging to 155 Br for a dollar.

Beneath the averages, individual banks have been telling their own stories.

Oromia Bank has cast itself as the price leader since mid-April, dangling 134.40 Br to buy dollars and 136.92 Br to sell, well above anyone else’s board. Its bold posturing is a magnet for diaspora remittances and exporters shopping for the best deal. On the opposite end sits the state-owned Commercial Bank of Ethiopia (CBE), which last tweaked its board in December 2024 and still posts 124.01 Br to buy and 126.49 Br to sell.

However, the CBE tops up incoming dollar deposits with a 10-Br bonus, keeping its posted rates stable for optics while narrowing the true gap. Private banks such as Enat, Wegagen and Amhara lie between those poles, which trace the Central Bank’s footprints but always keep a clean two-percent spread.

That variety sorts banks into three loose clusters. The “static conservatives” rarely change anything, a club that includes CBE and Berhan Bank, all keen to spare their depositors from daily dramas, or to obey tight internal edicts. Next come the “moderate adjusters,” such as Dashen, Zemen, Bunna and Nib banks, whose boards move in rhythm with the Central Bank yet still target comfort-size margins. There are the “aggressive leaders” — Oromia, Goh Betoch and Siinqee banks — whose big numbers bet that swooping in on premium business will outweigh the risk of regulatory pushback.

Whatever the strategy, all banks face the same headwinds.

Ethiopia’s current account deficit remains yawning. The permanent demand for dollars outstrips supply, and reserve cover is thin. The deficit is projected to be around three percent of GDP this year, roughly translating to 5.5 billion dollars based on the GDP estimate. Without an external lifeline, the Brewed Buck almost inevitably edges lower, and any whiff of policy improvisation can rattle confidence.

Still, a carefully managed divergence in spreads can reveal when and where pressure points lie. If the Central Bank can read that map correctly, it may tease out a transition to a more flexible regime while keeping the market onside.

Importers appreciate thinner spreads only as long as the rates hold. Exporters like an official selling rate that does not penalise them for converting hard currency. Always alert to mispricing, speculators watch for those fleeting windows when uneven spreads open arbitrage lanes before the Central Bank slams them shut. As each group probes the edges of policy, the Central Bank Governor, Mamo Mihretu, should juggle three tasks: signalling reform, keeping confidence and not draining scarce reserves.

Results from the next foreign-exchange auctions will show whether the official rate strategy clears the market or clogs it. Participation levels and bid ranges will signal how much hard currency remains in private hands. Commercial Bank should decide whether to mimic Oromia Bank’s high-octane pricing, stick to CBE’s glacial approach, or strike a safer middle line taken by the big five: Awash, Dashen, Abyssinia, Wegagen and Zemen.

The Brewed Buck had slipped only slightly at week’s close, but the conversation had moved a long way. Spread management, once a back-office routine, is now a front-burner signal watched by importers tallying invoices, exporters weighing contracts and households gauging the next jump in prices. Whether Ethiopia ends up with a smoother, market-friendly currency, or recoils to the shelter of tight regulation, will depend on how deftly Governor Mamo can keep writing, erasing and rewriting those thin lines between what the Central Bank pays and what it charges.

Researchers Churn Out Studies by the Ton. Quality Checks are Causality

Posted on May 18, 2025May 17, 2025 by Digital Editor

Ethiopia pours more than three billion Birr a year into academic research, yet too much of that money is vanishing into a sinkhole of low-quality work.

Since 2001, when the country contributed a mere 261 Scopus-indexed (the world’s largest database where 23,000 peer-reviewed academic works are stored since 2004) papers to global scholarship, output has surged nearly 23-fold, reaching 6,352 papers by 2020. That exceptional rise put Ethiopia among Africa’s fastest rising research hubs, in line with the African Union’s STISA2024 agenda, which casts knowledge production as the engine of development.

Ironically, the returns on that engine remain meagre, and in some respects damaging.

By one measure of quality control, Ethiopia now ranks worst in the world. Roughly 0.35pc of its published papers are retracted, representing more than 12pc of the work produced in the two years beginning in 2022.

Retractions of academic and intellectual works chip away at public trust and donor confidence alike. Each withdrawal should serve as a warning that the rush to publish has often come at the expense of rigour. A study at a public university found that 37.7pc of academics confessed to some form of misconduct. Plagiarism, data fabrication, or improper authorship, driven largely by the pressure to publish, are pervasive.

At some point, Bahir Dar University annulled more than 25 promotions after uncovering fraudulent articles in predatory journals. The drive for numbers is baked into the promotion rules. A harmonised policy introduced in 2013 rewards raw publication counts, with hardly any regards for impact or integrity.

Smaller campuses, lacking modern laboratories, fast internet, or even basic journal subscriptions, feel that pressure acutely. They are as bound by the ‘‘publish or perish’’ ethos as Addis Abeba University, the undisputed leader in research output, and its more endowed brethren in Jimma and Gondar.

However, investment in research remains modest. Ethiopia commits an estimated 0.27pc of GDP to research and development, less than half of South Africa’s 0.60pc and well below the African Union’s one percent target. Research typically accounts for a mere four percent of spending within university budgets, with the balance devoted to teaching and administration.

That imbalance leaves academics dependent on foreign grants, mostly from health sector donors such as the Bill Gates Foundation and USAID. Not surprisingly, biomedical and life sciences dominate the publication world, while social sciences and humanities struggle to attract funding.

International cooperations have provided a lifeline. Partnerships with foreign coauthors and peer reviewers open doors to higher-ranked outlets and English-language publication, but they cannot mask severe limitations on the home front. In 2019, the Ministry of Science & Higher Education mandated open access for publicly funded work and tightened accreditation for local journals in a bid to weed out predatory titles.

Implementation has been spotty, however, and cultural change is slow to materialise.

The consequences stretch far beyond academia. Retractions have dented the government’s ambition to ground policy in local evidence.

When the Addis Abeba Education Bureau imported a Scandinavian-style continuous assessment system, it did so without robust domestic studies. Class sizes are vast and teaching aids scarce, yet officials pressed on, only to find the model unworkable in the classrooms. Health authorities, too, borrowed a blueprint for primary healthcare with limited adaptation to the country’s patchwork of rural clinics, leading to fitful results.

Industry can feel the gap acutely. Only in agriculture has the research apparatus yielded a clear win. Scientists developed the Quncho variety of teff, a hardy grain that boosted farmers’ yields and was swiftly embraced.

Nonetheless, outside this sector, the handshake between campus and factory floor—what the economics pundit likens to “academia-industry linkages”—remains weak. Manufacturers and software firms often bypass local universities, buying foreign blueprints instead of homegrown solutions.

As a result, successive governments’ economic policy goals, from export growth to job creation and value-added production, are held hostage by a disconnect between research and application.

Pundits argue that the first step is fixing incentives. Promotion criteria should reward research impact and citation strength rather than raw output. Policymakers desire to establish a council for national research integrity, but this has yet to materialise.

Improving infrastructure could be yet another priority. The relatively better-equipped universities, already setting the pace, are not the ones most at risk of cutting corners. However, they may not be immune to the practice, although not to the extent that their younger peers have. Extending resources, such as plagiarism detection software, data validation systems, and reliable internet, to smaller campuses could reduce errors and temptations alike.

Lighter teaching loads for faculty, rather than heavier ones, would give researchers time to pursue thoughtful and high-quality work.

In a country where agriculture thrives on a virtuous cycle of donor support, government backing, and commercial partnerships, funding source matters, too. Other fields lack the bounty accorded to those in the agricultural sector. Raising research and development (R&D) spending to one percent of GDP, as the African Union recommends, would enlarge the domestic funding pool and reduce dependence on foreign grants tethered to external priorities.

A broader base of support would let Ethiopia diversify into underfunded fields, from mental health and governance to digital finance. Smaller and targeted reforms could also tighten the chain between knowledge and action.

Ministries might require pilot studies before importing foreign programmes, ensuring policies rest on local evidence. Universities could pair graduate students with industry mentors, a practice commonplace in several parts of the world. Journals could adopt open peer review, giving readers a window into the vetting process and deterring misconduct.

Judging by past records, academia has demonstrated the capacity to scale up production of research papers, but without reforms, that expansion risks deepening credibility gaps.

The choice is to continue chasing publication counts and squander public money, or invest time, resources, and energy to ensure integrity, inclusivity, and impact, converting universities from paper mills into engines of applied change. Each retraction today should be seen as a missed opportunity, and each unchecked shortcut a breach of trust. The time for course correction could be fast closing.

A Typo Takes Five Days, a National ID to Fix

Posted on May 18, 2025May 17, 2025 by Digital Editor

A woman on an adjacent white plastic chair suggested, half-joking, that we should start paying rent there. It was my third morning at the District Revenues Bureau. By then, a silent community of taxpayers had formed, bound by the shuffle from wooden bench to plastic seat in a queue that refused to shrink.

The errand was supposed to be simple. I was there to correct a typo in my Taxpayer Identification Number (TIN). I planned for half a day. Instead, it became a five-day lesson in the bureaucratic maze, complete with seating rotations, a cast of familiar faces and an ever-shifting set of rules. Each dawn, I arrived early and still found a crowd. There was no clear line, only a collective instinct about who had come first, enforced by fragile memory, fraying tempers and the occasional bench migration.

By midweek, I knew “my neighbours” by name, an odd camaraderie born of shared futility. We compared notes, watched for our turn and traded jokes to dull the edge of frustration. Every clerk delivered the same flat refrain for three days that “the system is down.” The words were spoken so often that they sounded rehearsed.

Studies on e-tax adoption in Addis Abeba say such outages, often blamed on power cuts, are “very common” and slow service across tax and licensing offices. Hundreds of walk-in clients arrive daily, but many leave empty-handed and only return because staff cannot reach the database or required documents are missing.

The blackout of administrative functions consumed my first three days. When the computers finally whirred back to life on Day Four, a new rule had appeared. No service without a national ID. That launched a side quest. Officials want every transaction tied to a digital identity, yet by mid-2024, only about seven to eight million people, roughly six or seven percent of a population topping over 100 million, had enrolled in the new national ID program the authorities dubbed Fayda. Those without it, including many in the queue, had no path forward.

I hurried to secure my card. On returning, I found the queue system in disarray. A clerk’s ledger had been replaced by loose-leaf sheets scrawled with names. The order relied on volunteers who simultaneously guarded their places in line. Minor offences, such as an accidental cut or a misunderstood priority number, provoked sharp words and near scuffles. The tension felt inevitable after so many stalled hours.

Service delivery in Addis Abeba’s public offices is chronically slow. Local media and officials concede that visitors often wait “hours” but offer no official clock-time statistics. My tally ended at five full working days — 40 hours — to fix a single misspelling. If roughly 200,000 annual visitors to Addis Abeba’s revenue bureaus each lost even 20 hours, the city would forfeit more than four million workdays, 16,000 person-years of productivity.

Multiply that by the thousands encountering similar desks nationwide, and the lost productivity becomes hard to digest. The time tax is the most regressive of all. Self-employed individuals, day labourers and street vendors cannot easily sacrifice a week’s earnings for a five-minute correction.

Yet, the tools to erase such delay already exist. Basic databases, online forms, appointment slots and SMS alerts could cut foot traffic and waiting times. The government’s Digital Ethiopia 2025 agenda and the National ID Program promise exactly that. Implementation, so far, has produced its detours.

When my paperwork was finally stamped, I stepped outside and breathed. The relief lasted seconds. Ahead, I saw another slow-moving trail where commuters were edging toward minibuses. Surveys of Addis Abeba taxis show average waits of about 35 minutes during rush hour, a reminder that queues extend well beyond government corridors.

My week of waiting ended as it had begun, with more waiting. But I carried one important lesson. If Ethiopia hopes to reach middle-income status or build a digital economy, it should first ensure citizens do not spend five days correcting a typo.

Moonlight in Zoma

Posted on May 18, 2025May 17, 2025 by Digital Editor

A leisurely Sunday afternoon at a coffee shop near Mekanisa Abo Mazoria turned into a spontaneous adventure. Over coffee, my friend mentioned a nearby park often described as a nature lover’s paradise, Zoma Museum. I had heard about it in passing and through media coverage but never made the trip myself. The word “museum” seemed slightly misleading for what turned out to be a mostly open-air haven bursting with indigenous vegetation.

We bought our tickets at a small kiosk that doubled as a souvenir stand. The 150 Br entrance fee felt reasonable, though I reserved judgment for after the experience. My first impression was the park’s uneven, sloping terrain, which must have posed challenges for development. A narrow cobblestone path led us in, flanked by raw, wooden handrails and winding walkways.

Immediately, the park’s lush greenery revealed itself. Indigenous plants, carefully landscaped gardens, and vibrant pathways greeted us with fragrant air infused with scents of besobela (Ethiopian basil), ariti (wormwood), coffee, mint, and more. Splashes of color from flowers blanketed the compound like a living tapestry.

What fascinated me most were the fruit trees, guava and avocado, heavy with ripening fruit. Avocados littered the ground beneath one tree, returning nutrients to the soil as natural compost. It was a quiet, self-sustaining ecosystem, beautifully maintained and deeply intentional.

Nearly everything within the compound is crafted from natural or reclaimed materials. Stools, bridges, walls, even the restrooms, are built with wooden frames and clay. The landscape, vegetable nurseries, and pristine gardens bear witness to the insight and care of its founders: Meskerem Assegued, a curator and anthropologist, and Elias Sime, an acclaimed artist.

Young couples, parents with children, and solitary visitors wandered the grounds in quiet reflection. The rustle of dry leaves underfoot, the chirping of birds, and the cracking of tree bark served as a natural soundtrack. There was a shared, unspoken reverence for the place, an oasis for those deprived of their birthright to clean air and serene surroundings.

Everyone I observed appeared calm and joyful. I was reminded how kindly nature treats us, when we treat it kindly. Yet, too often, we defy the balance, disrupting ecosystems and inviting disaster. At Zoma, I was reminded of an alternate path.

A sudden wave of nausea had me searching for a restroom. Expecting a rudimentary setup, I was surprised by the clean, well-lit, and cozy interior. The facilities were simple, yet far better maintained than those in many of Addis Abeba’s more modern establishments, where automatic sensors and “state-of-the-art” toilets often malfunction. Zoma’s restrooms, by contrast, were fully functional and abundant.

In fact, the thoughtful provision of such basic amenities should be a standard for any public facility. Yet in Addis, access to a clean toilet remains a luxury in too many places. Legislating for mandatory sanitation standards in recreational and public spaces would be a major step forward in improving public health and dignity.

Refreshed, we sought a place to rest our legs. The central garden lounge was the perfect retreat, surrounded by towering trees, climbing vines, and wooden stools tucked discreetly among the foliage. We ordered freshly made pineapple and strawberry juices, served cold and generous in portion. Sipping them in this tranquil hideaway felt like indulgence at its finest, as though we had stumbled upon a tropical sanctuary untouched by the rush of city life.

As twilight fell, the compound took on a magical tone. We wandered toward the vegetable nursery, following a cobblestone path alongside gabion stone walls. At the end was a wide garden sloping gently downward. Beside it stood a striking rectangular building with large French windows, stone pillars, and warm amber lighting—evoking the classical charm of Rome’s Pantheon.

Children played on slides while youth somersaulted across the grass. We gave in to the temptation and kicked off our shoes, lying back on the soft lawn. Above us, the moon beamed gently. I was reminded of an old jazz ballad I loved during my university days: Moonlight in Vermont by Ella Fitzgerald and Louis Armstrong. I played it on my phone. As Ella’s angelic voice intertwined with Armstrong’s husky croon, the atmosphere took on an almost cinematic softness.

Nearby, a clean cattle shed housed a gentle herd chewing their cud under the moonlight, as if listening too.

Zoma is not just a park; it is a rare ecological vision brought to life. Indigenous herbs like flourish here. Clay houses, long abandoned in modern construction, have been reborn as living spaces in harmony with the land. Wooden benches tucked among the gardens offer moments of rest and reflection. Cobblestone paths weave through cascading slopes that beckon visitors to linger, to snap photos, to remember.

Zoma is proof that coexistence between people, animals, and nature is not only possible, but also deeply nourishing. It is a model worth emulating if we are to heal our fractured relationship with the earth.

Demographic Dividend Drains Away When Youth Policy Drifts

Posted on May 18, 2025May 17, 2025 by Digital Editor

In contemporary sub-Saharan Africa, young people drive the economy. Nearly two-thirds of the population in many countries is under age 35. The share is even higher in Ethiopia, at roughly 70pc. Twenty years ago, enrolling in university almost guaranteed a job in the public or private sectors. Today, that promise has evaporated. Young graduates find themselves adrift, with no clear policies or programs to chart their futures.

The existing Ethiopian Youth Policy, drafted in 2004, pledged to empower individuals aged 15 to 29 by equipping them with skills, knowledge and ethical integrity to participate fully in a democratic system and thrive in economic and social activities. The policy even declared a youth fund, championed by Prime Minister Hailemariam Desalegn. Yet the fund, hailed as a lifeline for entrepreneurial young people, collapsed due to mismanagement and a lack of transparency.

On the ground, technical and vocational education and training programs have made a difference, helping some young Ethiopians acquire market-ready skills. But, higher education remains stuck in limbo: Universities and government leaders show no urgency to reform curricula to match labour market demands. New graduates, even those from the regional states’ top schools, often struggle to secure paid internships or entry-level jobs. Medical doctors, engineers and lawyers can wait months, even years, before landing their first professional roles.

The mismatch between a swelling young workforce and a sluggish economy presents a depressing dilemma. The World Bank estimates that Ethiopia sends nearly two million new job seekers into the labour market each year. The public sector, once the principal employer, cannot absorb new graduates in meaningful roles. The private sector, still dwarfed and undercapitalised, lacks incentives to expand hiring.

Public investment focuses heavily on supply-side measures, such as expanding school enrollment, building campuses, and launching skills training. Demand-side initiatives, such as stimulating enterprises to create jobs, remain underdeveloped.

The result is a dynamic yet disillusioned youth cohort. When policymakers discuss the problem, many default to lamenting the quality of education and the absence of an entrepreneurial mindset among graduates. Yet, anecdotal evidence tells a different story.

At a recent workshop, a State Minister urged young people to master technologies invented in Europe during the early 1900s. Outside the hall, their peers worldwide were busy solving today’s and tomorrow’s challenges, developing fintech apps, experimenting with renewable energy and pioneering sustainable agriculture. The State Minister’s advice uncovered a troubling disconnect. Ethiopia’s leadership struggles to grasp the rapid pace of global change.

Civic and nonprofit groups, once viewed as vital partners in youth development, now operate in an uncertain environment. The government was unprepared when crises hit these organisations, and support systems to sustain them are scarce. As a result, many promising initiatives falter before reaching scale.

Ethiopia’s standing as a top recipient of United States Agency for International Development (USAID) support, with nearly 1.2 billion dollars allocated in 2024, showed the depth of the country’s development challenges. Despite this influx of aid, basic issues persisted, including stubborn youth unemployment, skill gaps and weak private sector growth. Added to that mix, internal conflicts continue in the Amhara and Oromia regional states, further inhibiting economic activities and scaring off potential investors.

Meaningful progress will require political courage and new strategies. It demands that the government address the root causes of unemployment rather than its symptoms. Some suggest constitutional amendments to decentralise power and give regional states more autonomy over economic planning. Others point to successful models abroad, such as several East Asian countries, for example, which combined government-led vocational programs with tax incentives for small and medium-sized enterprises to spur job creation.

Policymakers should acknowledge that leadership failure is not the only factor at play. The education system needs to evolve, as global economic conditions exert headwinds, and rapid demographic growth strains resources. Technological change offers both risks and opportunities. Getting the policy mix right, aligning supply-side investments with demand-side incentives, will be critical.

A more coherent approach could include closer collaboration with the private sector, having clear targets for government-led internships and employment schemes. It can be complemented with rigorous measures to curb nepotism and corruption. It might also involve benchmarking against countries that have successfully undertaken similar transitions. For instance, Malaysia and South Korea once faced surging youth unemployment but now boast vibrant private sectors supported by public policies that linked university outputs to industry needs.

Sadly, time is not on Ethiopia’s side. As the labour force grows, the cost of inaction will rise, risking social unrest and an erosion of hard-won development gains. Frustration will mount if university graduates cannot translate their skills into jobs. That could destabilise communities, fuel migration pressures, and reverse progress in poverty reduction.

The next generation of leaders should embrace a pragmatic vision, treating youth unemployment as a macroeconomic priority, not a social footnote. They should reinvigorate the private sector, making hiring easier for startups and established firms. They should reform universities so that curricula reflect real-world needs and expand government-supported internships to give graduates a foot in the door. They also have to attack corruption head-on, for resources to flow to the most capable and deserving.

Ethiopia possesses much of what it needs for a breakthrough. A dynamic and educated youth population, substantial international goodwill, and a public administration capable of large-scale interventions are all here for use. What is lacking is the political will to transform a strategically coherent plan into tangible outcomes.

Protectionism Will Not Protect Against Pandemics

Posted on May 18, 2025May 17, 2025 by Digital Editor

As many Global North countries turn inward, foreign assistance has become an easy target. The decimation of the US Agency for International Development (USAID) has dominated headlines, but the United Kingdom and many European countries have also cut their foreign-aid budgets. Policymakers in these countries view this spending as a form of charity and think that bolstering their economic and military might will deliver more benefits for more people.

This instinct is short-sighted. It recalls the great-power ambitions of the 19th and early 20th centuries that culminated in two devastating world wars. The global governance architecture that emerged from this unprecedented tragedy, including the Bretton Woods institutions, the United Nations, bilateral foreign-aid programs, and NGOs like CARE and Oxfam, initially focused on responding to reconstruction needs and humanitarian crises, before turning to development.

Despite its flaws, this approach helped lift more than one billion people out of extreme poverty and build stable and thriving economies worldwide.

The global health system is a case in point. Built with funding from the United States (US), the UK, and other wealthy countries, it has substantially reduced infectious disease rates and health inequalities, creating a safer and more secure world. Five years ago, this system was instrumental in detecting COVID-19, tracking its spread, and mobilising a global response.

But, COVID-19 also illustrated how poorer countries and households are caught in an inequality-pandemic cycle. Contrary to claims that the Global North gives too much aid and receives too little in return, it is the Global South that is getting the bad deal. After compiling and analysing hundreds of peer-reviewed studies, the Global Council on Inequality, AIDS & Pandemics (of which we are members) found that poor and marginalised people struggle to access health services during disease outbreaks, leaving them more susceptible to infection, illness, and death.

Viruses and other contagions prey on these vulnerabilities, turning outbreaks into epidemics, and epidemics into pandemics, which deepen inequalities and reinforce the cycle.

In the early days of COVID-19, this inequality-pandemic cycle was on display in Global North countries. White-collar professionals worked safely from home, thanks to high-speed internet and teleconferencing platforms, whereas small businesses and factories closed, throwing blue-collar workers into financial crisis. In these countries, the pandemic hit low-income and Black and minority communities the hardest.

The unequal impact of the pandemic was also felt between countries. Vaccines were developed in record time – the result of a remarkable multilateral investment in strategic industries – but high-income countries purchased most of them, and then refused to share excess doses with the developing world. This vaccine hoarding caused more than one million deaths and cost the global economy an estimated 2.3 trillion dollars.

The same pattern played out in the early response to the AIDS pandemic. Effective antiretroviral drugs became available in the Global North at the end of the 20th Century. But AIDS continued to kill hundreds of thousands of people in the Global South, and especially in sub-Saharan Africa. The unconscionable denial of access to lifesaving treatment sparked global outrage, leading to the establishment of the Joint United Nations Programme on HIV/AIDS (UNAIDS), the Global Fund to Fight AIDS, Tuberculosis, & Malaria, and the President’s Emergency Plan for AIDS Relief (PEPFAR) in the US.

In 2002, fewer than one million people living with HIV had access to antiretrovirals, whereas more than 30 million do today. Expanding access to treatment has so far saved an estimated 26 million lives. And, before the recent foreign-aid cuts, the world could have achieved its goal of ending AIDS as a public health threat by 2030.

The decades-long journey to end AIDS has underscored the importance of investing in health systems, medical research, and vaccine and drug production in both the Global North and the South. It has also highlighted that people’s living conditions, often called the social determinants of health, including job security, income level, access to education and affordable housing, and respect for rights, determine their well-being.

For example, in 1996, Botswana, which was hit particularly hard by the AIDS pandemic, effectively added a year of secondary school to its public education system. This policy created a natural, population-level experiment on the effect of schooling on the risk of HIV infection. An analysis of huge cohorts of young people who went to school under the old system and the new system found that each additional year of schooling reduced a young person’s risk of HIV infection by 8.1 percentage points. This protective effect was strongest among women, whose risk of contracting HIV decreased by 11.6 percentage points for each additional year of school.

Building fairer societies leads to healthier populations that are better prepared to react to disease outbreaks and prevent pandemics. By contrast, defunding public education, slashing social safety nets, imposing tariffs, closing borders, cutting foreign aid, and disengaging from multilateral cooperation will widen inequalities, fuel political instability, accelerate economic migration, and create the conditions for viruses to thrive.

This is evident in Ukraine, where an overburdened healthcare system has accelerated the spread of drug-resistant infections through war-torn communities. Meanwhile, outbreaks of Ebola, mpox, measles, and Marburg are on the rise, partly owing to globalisation and climate change. Weakening the global health system will enable these outbreaks to fester and spread, taking lives, deepening inequalities, and potentially destabilising societies.

Experts are already warning that cuts to US programs (including those delivered by USAID) could lead to a 400pc increase in AIDS deaths by 2029.

The abiding lesson of pandemics is that no one is safe until everyone is safe. Building walls and shutting out the world will not protect people. The only way to do that is by reducing inequalities and investing in the global health system. In this context, cooperation is the ultimate act of self-interest.

The World Doesn’t Need Another Climate Fund

Posted on May 18, 2025May 17, 2025 by Digital Editor

Brazil has announced plans to launch a 125 billion dollar fund for the protection of tropical forests. It is a key element of the country’s plan to ensure the success of the next United Nations Climate Change Conference (COP-30), which Brazil will host.

But, at a time when some of the world’s wealthiest economies are slashing their foreign-aid budgets, and the United States is turning its back on climate action altogether, does the world need another climate fund?

Over the past three decades, more than 60 multilateral funds have emerged to raise financing for climate action in developing countries. Most are small and obscure, leaving around 19 sizable entities, including the Green Climate Fund (GCF), the Global Environment Facility (GEF), the Adaptation Fund (AF), and Climate Investment Funds (CIFs), that publicly report on their activities.

In theory, each entity serves a worthy purpose, and a few have gained some traction. In particular, the GCF has emerged as the second-largest multilateral provider of grant-based climate finance to the most vulnerable countries (after the World Bank). But, overall, their contributions are underwhelming. In 2021-22, the 19 funds tracked by the UN’s Standing Committee on Finance delivered a mere 3.7 billion dollars, roughly 195 million dollars per fund. That is far less than the 55.7 billion dollars that multilateral development banks collectively provided for climate action, and nowhere near the trillions of dollars that developing economies need annually to close the climate-finance gap.

A key problem is that donors have not been stepping up to fund these entities. The US, the world’s biggest economy and largest historical greenhouse-gas emitter, committed to providing a measly 17.5 million dollars to the much-touted Fund for Responding to Loss & Damage (FRLD), agreed at COP-28 in Dubai. At COP-29 in Baku, the AF fell well short of its 300 million dollars funding target, leaving it struggling to bankroll even the projects already in its pipeline.

Now, even these modest contributions are set to dry up.

President Donald Trump’s Administration has withdrawn the US from the Paris climate agreement, abandoned the FRLD and other funds, and dismantled the country’s foreign-aid apparatus. While not all wealthy economies are following in America’s footsteps, many, including Belgium, Canada, Finland, France, Germany, the Netherlands, Sweden, Switzerland and the United Kingdom, as well as the European Union (EU), are also tightening their purse strings.

Together with the US, these donors accounted for 69pc of bilateral climate commitments to developing countries in 2021-22 and supplied 74pc of contributions to climate funds since 2003. Raising climate finance, which is always a difficult task, is becoming a Herculean one, meaning countries will have to figure out how to do more with less. The last thing the world needs is for this limited capital to be funnelled into a fragmented, inefficient system composed of dozens of narrow climate funds.

Climate funds were created to address shortcomings of existing multilateral institutions like the World Bank. For example, they offer “direct access” funding to national and regional entities, thereby promoting country ownership and helping to build institutional capacity. Their smaller scale and larger numbers were supposed to promote healthy competition and give recipient countries more options.

But, the fund landscape has become so crowded, with each entity possessing its own accreditation rules, approval processes, and compliance requirements, that recipients should navigate a bureaucratic maze to access any financing at all. All this red tape, which slows disbursements considerably, is especially burdensome for the most climate-vulnerable countries, such as small island developing states, whose institutional capacity is already stretched thin.

It does not help that keeping all these funds running costs money. The overhead of the Special Climate Change Fund, for example, represented more than half of its project commitments in 2019-21. This is hardly the best use of limited climate finance. It is also worth noting that, while climate funds are generally supposed to raise “new and additional” financing, this has seldom happened. Instead, they tend to draw from a fixed pool of public funds for sustainable development, which includes different climate-related projects and other critical priorities, such as health, education, and poverty reduction.

Far from creating yet another climate fund, delegates at COP-30 should focus on streamlining climate finance. A handful of funds with harmonised standards and processes would be far better equipped to deliver efficient and accessible funding and ensure that as few dollars as possible are wasted.

Experience suggests that such an effort might run up against considerable resistance. The CIFs were supposed to be a storage, to be wound down following the rise of the GCF. But in 2019, their governing committee scrapped the sunset clause, insisting, over the objections of experts and civil society organisations, on their continued relevance.

Ensuring that future efforts to build a more efficient climate-finance architecture are not similarly thwarted will require powerful actors to bring their influence to bear. This is the kind of climate leadership the world needs from Brazil.

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Author: Digital Editor