May 16, 2011

Share Over $8bn Flee Ethiopia in Two Decades

Filed under: Ethiopia — ethiopiantimes @ 6:18 pm
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Ethiopia may be touted at international conferences on development agendas as one of the 10 fastest growing economies in the world, but it is also one of the top 10 out of the 45 least developed countries (LDCs) where foreign currency flows out in an illicit manner, worse than countries such as Sudan, Djibouti and Eritrea, a new study found.

Over 8.3 billion dollars left Ethiopia in 18 years after 1990, an amount comprising an average 3.6pc of its GDP, a damning and first of its kind study, conducted by the United Nations Development Programme (UNDP), revealed last week.

This is part of the one trillion dollars that is believed to have left LDCs over the years covered by the study, an amount estimated to be 10 times larger than what these countries receive from rich countries in the form of official development assistance (ODA).

Ethiopia’s loss of over eight billion dollars in the past nearly two decades represents an average of 3.6pc of the amount it has received from its development partners during the same period, the study revealed.

The worst period was in 2006, when illicit funds representing 9.2pc of foreign assistance for the year, amounting to 1.4 billion Br, was believed to have left the country.

Bangladesh stands above any of these countries found to be victims of the illicit outflow of foreign currency; it has lost 34.7 billion dollars (equal to 3.4pc of its GDP) to illicit money transfers, followed by Angola, which lost 34 billion dollars, 10.9pc of its GDP.

“This money could be used for the countries’ development efforts,” Helen Clark, UNDP administrator, said at a panel discussion held in Istanbul, Turkey, on the side of the UN’s fourth conference on LDCs.

The 63-page report by the UNDP was released on the afternoon of Wednesday, May 11, 2011, where Abdella Hamdok, an expert on the issue from the UN Economic Commission for Africa (ECA), was one of the panellists.

“It is an excellent report that has managed to capture the extent of the problem,” she said.

Although there are 49 countries listed as LDCs, and 45 of them were covered under the study, 70pc of the illicit outflows of funds as “any money that is illegally gained, transferred, or received” originated from Africa, according to Hamdok.

Another finding of the report that raised eyebrows among panellists was the revelation that the usual suspects of African dictators and their cronies do not have as much part in the money laundering scheme as members of the private sector. A staggering 79pc of money laundering out of these countries was funnelled through what the studies described as the “mispricing of trade.”

The mispricing of trade involves businesses under or over invoicing of their merchandise, according to Clark.

“When a ton of bananas is sold for a dollar, but the invoice says 50 dollar cents, the other half is slashed to be sent to an offshore account,” said Geraldine Fraser-Moleketi, a former senior official from South Africa who now serves UNDP as director of Democratic Governance Group.

The source of illicit money is tax evasion and an attempt to launder the gains through the international financial system, according to the UNDP study.

“That there is a lack of adequate global tax monitoring and the absence of information sharing has contributed to the outflow,” said Moleketi.

Macroeconomic problems such as high inflation, structural characteristics of an economy including non-inclusiveness of growth, and overall governance issues such as political instability were blamed by the UNDP experts as the reasons behind money laundering from poor countries.

Ethiopia, sharing all or some of these factors, lost an annual average of 491 million dollars over 18 years, the study disclosed. The highest amount to have fled the country, 2.1 billion dollars, was recorded in 2008.

It claims nearly eight per cent of the country’s GDP registered that year, according to the UNDP study.

Ethiopia’s loss of foreign currency to money laundering between 1990 and 2008 was 1.2 points below the 4.8pc average recorded for all the countries covered in the study, while 27 of these countries are above this average which bleeds their economy. Chad is the biggest prey with a loss of 15.4 billion dollars (27.3pc of its GDP).

Government representatives at the discussion were advised by the UNDP officials to modernise their customs systems and undertake public administration reforms to provide expertise to fight money laundering. No Ethiopian government delegate was present; while over 30 had arrived in Istanbul, they left the day before.

Apart from an Ethiopian working for the UN and stationed in New York, there were two other Ethiopians in the room where the discussion took place. Among them was a shareholder of a prominent importing company in Ethiopia, Garad Plc. They had also left before the recommendations of the UNDP were read out.


Ethiopia rebels say govt troops kill 100 civilians

Filed under: Ethiopia — ethiopiantimes @ 6:13 pm

ADDIS ABABA, May 16 (Reuters) – Ethiopian government troops have killed more than 100 civilians, including a local U.N. worker, during a five-day military operation in the oil and gas-rich Somali Region, a rebel group said on Monday.

More commonly known as the Ogaden, the ethnic Somali province is home to a low-key insurgency led by the Ogaden National Liberation Front (ONLF), which has fought for independence since 1984.

Government officials could not be reached for comment.

“The Ethiopian army and its local conscripts killed more than 100 civilian people from May 10 – 15 in the area, (and it) is still on going,” the ONLF said in a statement.

“The (ONLF) intelligence service has ascertained that the Ethiopian army conducted the killing and abduction of U.N. local staff in the Ogaden jointly with the notorious militia of the (local) administration,” it said.

The United Nations’ World Food Programme (WFP) said on Saturday that one of its drivers had been killed in an ambush by unknown gunmen in an attack that left another staff member wounded. [ID:nLDE74D0CU]

Two members of the convoy were also missing, WFP said.

The ONLF said the incidents occurred while government troops conducted “kill-on-sight” operations in the Ogaden’s Fafan valley and that the attack on the U.N. convoy was an attempt to “silence” its employees who had witnessed the operations.

Authorities in Addis Ababa were not immediately available for comment, but they usually reject the group’s claims as “baseless propaganda”.

The allegations are impossible to verify because journalists and aid groups cannot move unhindered in the area.

This is not the first time the ONLF has accused government troops of atrocities in the region. The group said in January that soldiers had arbitrarily executed civilians and carried out ethnic cleansing in the province, a charge dismissed by the authorities. [ID:nLDE70K10N]

Ethiopian forces waged an offensive against the rebels in late 2007 after the ONLF staged a pre-dawn attack on a Chinese-run oil facility, killing 74 people. Analysts say the rebels have since been weakened, but are still capable of launching hit-and-run attacks.

Ethiopia signed a peace deal in October with one faction of the ONLF, though another wing labelled the deal “irrelevant”. The faction with which Addis Ababa sealed the accord says it represents 80 percent of the group’s fighters.

The Horn of Africa nation says the Ogaden basin may contain gas reserves of 4 trillion cubic feet and major oil deposits. (Editing by Richard Lough and Elizabeth Fullerto

BREAKING NEWS: Taxi drivers in Ethiopia go on strike

Filed under: Ethiopia — ethiopiantimes @ 11:18 am
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Source: Ethiopian review

Ethiopia’s capital Addis Ababa is hit with a work stoppage by taxi drivers today. Most taxi drivers have stayed home this morning, causing a massive transportation disruption in the city. Many residents are observed walking to work. The taxi drivers are protesting the unbearable cost of living and a recent regulation that limits them to certain areas of the city. [more update later]

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