Premier’s Office Reversed MIDROC’s Land Ownership Cancellation

Experts from Addis Ababa City Administration have been investigating the status of lands issued for MIDROC years ago for investment purpose. Plots of land besides Wabi Shebele Hotel in the Ledeta Sub City and the one around Beshale Hotel in the Yeka Sub City are those that are given to MIDROC and have been left without any construction for years.

Based on these, the experts had recommended for the land ownership licenses issued for MIDROC in these two locations to be cancelled. And hence, the licenses for both these locations are cancelled at the respective sub cities. Objecting the decision, MIDROC had filed its complaints on the case to the Prime Minister’s office and the Premier’s office has ordered the Addis Ababa City’s administration office to reverse the decision. 

 

The team of experts has also investigated the cases of 109 plots issued to investors that are left without any construction for years; among which it recommended license cancellation to 59 of them.
According to the Reporter, finally, after much delay, the city administration’s cabinet is preparing to decide on the land ownership cancellation recommendations this week.

The Asians at the Labor market in Ethiopia

In a country where 80 percent of jobs for youth are within the informal sector, as the formal sector has not been a dynamic engine for growth, creating more jobs should be the first among the many government priority lists. Unfortunately, the opposite has been happening in Ethiopia, and many believe that the MIDROC Ethiopia Project Office (MEPO) plan will be another factor negatively affecting the labour market–creating further job insecurity in an already weak economy. Recent studies by the World Bank estimate urban unemployment rates at around 21 percent based on the population age 10+. The rates vary in different urban setups. In Addis Ababa, for instance, the unemployment rate is 24 percent. This rate is even higher for woman, at 34 percent.

On a week day before three year, the street along De Gaulle Square, Piassa, was crowded with people. In the center stood five Chinese men, the crowd was amazed by what they saw and heard. The Chinese men were neither tourists nor artists, but street traders attempting to sell used items. In broken English, they called the prices aloud, “Thirty Beeer, Twenty Beeeer!” for used umbrellas, raincoats and many other household items. The scene clearly was a tragedy staged in a public place. Only few hundred meters away, police were busy disbanding and arresting local vendors selling second-hand goods and low-quality materials produced in China.
However, as if the economy was in short supply of unskilled labour, government officials did not respond to this market development. Interpreting their silence and indifference as a good opportunity, many more Chinese people began to engage in other service sectors as vendors, chefs, waitresses and technicians. In Ethiopia today, Chinese laborers some of who are allegedly prisoners–increasingly fill these and many other occupations.

Another story with a similar undertone came to the fore before two year.  According to the weekly English newspaper, The Reporter, the MIDROC Ethiopia Project Office (MEPO) is planning to recruit approximately 5000 Filipino workers to their construction sites in Ethiopia.

These Filipinos are day labourers, with no special skills that might qualify them above their local rivals. As common to construction work, the majority of the workforce is unskilled. One of the very reasons that governments and policymakers encourage the expansion of this sector is because it can create short term, decent-paying job opportunities for the mass of unskilled force in the market.
Considering the government’s proclamation of an increase in technical and vocational schools throughout the country, the labour market of the nation should certainly be capable of providing any amount of unskilled or even semi-skilled day labourers
However, the trend stands contrary to this claim of semi-skilled labour force creation. Due to the unchecked high population growth rate and a very low job creation capacity, a more unskilled generation is, in fact, entering the market.

In a country where 80 percent of jobs for youth are within the informal sector, as the formal sector has not been a dynamic engine for growth, creating more jobs should be the first among the many government priority lists. Unfortunately, the opposite has been happening in Ethiopia, and many believe that the MEPO plan will be another factor negatively affecting the labour market–creating further job insecurity in an already weak economy.

Recent studies by the World Bank estimate urban unemployment rates at around 21 percent, based on the population age 10+. The rates vary in different urban setups. In Addis Ababa, for instance, the unemployment rate is 24 percent. This rate is even higher for woman, at 34 percent.

In general, excluding the disguised unemployed in the rural area, unemployment in Ethiopia seems to be an urban phenomenon. Particularly, the high growth rate of youth entering the labour market makes the unemployment situation worse. According to research, reducing unemployment in the country today is very difficult as a result of new developments. A rising skill profile of the urban work force, changes in the educational composition of employment (which includes both those who completed Grade Four and those who graduated from Technical and Vocational Education Training schools), an increased level of urban labour supply due to high internal migration and many more characteristics of the labour market present significant obstacles to reducing unemployment.
Despite many constraints on enhancing employment, economists have been advising the government to focus on industries that are highly labour-intensive. Such industries, such as agro-processing, are assumed to help the economy by providing employment to the unskilled and semi-skilled work force both in urban and rural areas.

However, in a country in which the politician’s daily rhetoric plays a dominant role over the expert’s advice, it is not uncommon to see such oddities in everyday life. The intension to recruit 5000 Filipinos is one indicator. The irony is beyond comprehension. Anyone who walks along the road to Gerji can see thousands of unemployed Ethiopians lining up outside the gates of a construction company or site where only three daily labourers are needed.  Thousands of youngsters in Wolayita continue to wait by the side of the main road for someone who may or may not come to take them for a job of any kind.

Bringing these 5000 Filipinos into the work force does not only affect the unemployed competing for the same opportunities. It will also affect those who have been working under the MEPO on different construction sites, as the construction industry is very sensitive to marginal labour increases and seasons. Casual workers might be evicted from their positions and forced to face the challenges of the ever-rising cost of living. As these terminated labourers would then increase the general pressure on the labour market in the entire construction industry, sector wage rates may be reduced. This, in turn, will surely affect thousands of labourers and their families.
The government has not yet issued a statement on the issue, and so it remains unclear how they intend to deal with it. Yet we can rest assured that a news story will inevitably be released from the state media: “5000 Filipinos significantly contribute towards the success of the Growth and Transformation Plan.

Guest Writer

Al Amoudi’s Company refuses to pay 200 million Br after acquiring around 80,000tns of coal it had imported

The warehouse that Derba cement stores the coal that it bought from the enterprise.

The Ethiopian Petroleum Enterprise (EPE) is threatening to sue Derba MIDROC cement factory, a new entrant into the industry alleging that it has not paid around 200 million Br after acquiring around 80,000tns of coal it had imported, sources disclosed to Fortune .

The enterprise, which also imports petroleum for nation, claims that its working capital is tied up and hence is eying the court as an alternative means of getting its money back.

The enterprise has been delegated by the Ethiopian government to import coal since December 2011 when the government, decided to replace the Heavy Furnace Oil (HFO), a source of energy that cement factories use to burn the clinker to coal aiming at reducing their production cost and hence make them competitive.

The enterprise thus made a deal with the large-scale factories such as Mossobo, Derba and National Cement factories owned respectively by the Endowment Fund for the Rehabilitation of Tigray (EFFORT), Mohammed Hussien Ali-Al-Amoudi(sheikh) and East Africa Industrial Group as a major shareholder.

Accordingly, based on their reported demand, the EPE inked multimillion dollars contract with Hyton Inc, an international coal supplier company for the supply of 600,000tns of steam coal for these factories in December 2011.

Out of these, Derba which has the capacity to producing 2.5 million tonnes of cement on annual basis has the highest demand and takes the largest share, which is estimated at 50,000tns on a monthly basis.

The EPE so far has imported and distributed 144,000tns of coal to the three factories. However, all did not pay on time. Mossobo and National Cement also owe the enterprise 52 million Br and 30 million Br, respectively, according to sources at the Ministry of Industry (MoI).

Nonetheless, Derba did not effect any payment so far while it has been taking the coal from the enterprise that made it eying the court as alternative to get its money back, according to these sources.

This had drawn the attention of the MoI, which called three cement factories, and the enterprise for a meeting led by Tadesse Haile, state minister for MOI, last week.

Tadesse told Fortune that a consensus has been reached between the factories and the enterprise. “Since the coal is imported to reduce the costs of the factories, they should share a loss in case there is any.”