ethiopiantimes

August 13, 2014

Premier’s Office Reversed MIDROC’s Land Ownership Cancellation

Filed under: Midroc — ethiopiantimes @ 6:45 pm
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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.

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August 7, 2014

Quality of Chinese made roads in Ethiopia: Around 765 thousands birr damaged due to heavy flood

Filed under: chinese roads — ethiopiantimes @ 7:52 pm
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As Fire and Emergency Prevention and Control Authority Communication Office head Ato Nigatu Mamo told to DireTube media; yesterday at 10 O’clock local time in Bole sub city woreda 13 in Sunrise building property of 700 thousands birr damaged as a result of flood.

In the same way the same day as a result of flood has entered in 7 residencies property of 65 thousands birr has been damaged in Kirkos sub-city woreda 15 around Kera behind the Mosque at 10:30 local time.

At 01:30 the same day around Olompia heavy flood brought passengers and vehicles to stay for a long time.

May 22, 2014

Ethiopia: New Study Reveals Ethiopian Customs & Revenue Authority Most Corrupt

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A new survey conducted by Selam Development Consultants, assisted by JGAM Donors in collaboration with the Federal Ethics and Anti Corruption Commission, revealed Ethiopia’s Customs and Revenue Authority as the most corrupt government office followed by the construction permit and land administration offices.

Entitled “Perception of the Level of Corruption by Foreign Investors in Ethiopia”, the study, which also aimed at identifying public sector institutions that are more prone to corruption according to foreign investors operating in Ethiopia, states corruption in Ethiopia has generally decreased.

However, according to the survey, in institutions dealing with customs, import & export, foreign currency, taxes and tax collection, land acquisition for business purposes and other public utilities such as electricity and telecom corruption has shown an increase. “Even if there were no documented and study based focus areas so far in the commission, the findings of the survey are not new,” Ali Suleman, Commissioner of the Federal Ethics and Anti-Corruption Commission told Addis Standard. “Customs and Revenue, and public financial institutions have been the focus areas of the commission and will continue to be,” he added.

The survey stated that government contracts still need to be further improved as some respondents perceived that at least half of the government contracts involve unofficial payment averaging 24% of the value of contracts.

“This implies that the government still needs to work on the reform processes and reviewing the salary of civil servants,” says the survey.

The survey result also showed that lack of evidence, actions against those who commit corruption and clarity about corruption proceedings as the three top reasons why people would not report corruption to the relevant authorities.

More than 400 foreign investors, who are currently investing in Ethiopia, were included in the survey.

May 18, 2014

Unused government properties worth the annual foreign aid and loan the country gets: FEACC study

Filed under: Uncategorized — ethiopiantimes @ 2:41 pm
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Unused government properties worth the annual foreign aid and loan the country gets: FEACC study

The study conducted by the Federal ethics and anti corruption commission (FEACC)on the property administration and related issues of the government offices discloses that the value of unused government properties in the government offices across the country equals the amount of money the country is getting annually from foreign aid and loan.

The study points out various mismanagement practices in the purchasing, handling and protection of the government properties which are aggravated to a shocking condition. Purchasing processes which are prone for corruption, expensive items that are kept without use for years and properties that are lost, damaged or unaccounted are some of the problematic issues that are observed in the study.


Deputy Commissioner of FEACC Ato Wedo Ato discussed the result of the study with representatives of different government offices.

“The problem is of all of us; and you have to look into your organizations and try to correct the problem which is possible” He said. The country spends about 14% of its GDP for the purchase of various properties for the government offices and most government offices and agencies are known to have used from 60% to 70% for the purchase of various items and properties. In connection to this, the study depicts that in government offices across the country government property which worth what the county gets as loan and aid annually is accumulated without any use.

Girum Tebeje of DireTube from the Reporter

May 13, 2014

Ethiopian Regime Quietly Disintegrating

Although Prime Minister Haile Mariam Desalegn holds the highest office in Ethiopia, he has no real authority. He is described as a  Medvedev for a group of Putins in the ruling TPLF party.



Ethiopian Regime Quietly Disintegrating

By AfricanIntelligence,

The general election looming ahead in 2015 is already casting a shadow over the Ethiopian government, whose sole uniting bond would seem to be its praise for the memory of its late Prime Minister Meles Zenawi.

His portraits are on all the walls in Addis Ababa, which was not the case when he was alive, and in the Federal Assembly a video projector plays his speeches with the aim of inspiring the new MPs. And yet, since Meles Zenawi died in August 2012, the federal government has been rudderless, lacking a descendent.

His successor as Prime Minister, Haile Mariam Desalegn, has neither the grip nor the political clout and has not managed to impose himself on the other political leaders. He frequently has to be content with merely dealing with everyday business. While it is true the Ethiopian State, whose tradition goes back a long way has not fallen into decadence, the different factions and regionalist tendencies are making federal power increasingly fragmented.

Divisions produce inertia – Going beyond appearances, the ruling coalition Ethiopian People’s Revolutionary Democratic Frong (EPRDF) is in embryonic Crisis state. Its central core, the Tigray People’s Liberation Front (TPLF), is deeply divided between “provincial” faction led by the Tigray Regional State President Abay Woldu, and the “modern nationalist” faction headed by Deputy Prime Minister Debretsion Gebremicahel, not to forget the various other Tigrayan sub-factions such as those of the elderly Marxist Sebhat Nega and the Meles Zenawi’s widow Azeb Mesfin.

Facing this inter-Tigrayan squablle, the Amhara in the ANDM and the Oromo in the OPDO (two of the parties in the ruling coalition) are watching from the wings, biding their time before they go into the arena. This freezes the decision-making power, as each faction does not want to make the wrong decision and yield an advantage to its rivals. In early April, speaking on a live TV debate (a rare event in itself), Amare Aregawi the editor of The reporter asked the Prime Minister who is it that makes the decisions in the office and whether he is capable of making any himself. Much to the surprise of the viewers who are used to seeing decisiveness on their screens, Haile Mariam Desalegn mumbled an unconvincing response, confirming that the question had indeed struck home.

The economy and diplomacy are broken – Ethiopian diplomacy suffers from a lack of leadership at the top of country. Questions about the situation in Somalia are left to the head of the Ethiopian army which is intervening directly in its neighbour’s territory. In the case of the IGAD mediation in the South Sudan crisis, the former foreign affairs minister Seyoum Mesfin was recalled from his post of ambassador to Beijing to lead the mediation. He nevertheless played a fairly effective role of mediator, which was largely taken over by the Ugandan President Yoweri Museveni even though Ethiopia did at the time hold the presidency of IGAD.

Similar blockages have produced similar effects in the management of the State-oned companies. The telephone network run by Ethio Telecom (formerly ETC) provides a very poor service, mainly because of frequent electricity outages which also affect the water distribution system when the electric pumps stop running. The cause is breakdowns of the aging transformers purchased second-hand from India by the Ethiopian Electric Power Corporation (EEPCO) several years ago. Today, EEPCO and ETC are squabbling over who should pay the cost of renovating the electricity system, a problem which Debretsion Gebremicael, the chairman of the EEPCO and ETC boards, has been unable to settle.

Regionalism becoming more intense – Since the end of April, the federal police have brutally repressed student protests against the Master Plan in several universities in the Oromia Regional State. This Master Plan involves the expansion of Addis Ababa whose mayor, Diriba Kuma, is also an Oromo.

In the students’ view, this project would eat into Oromo land and reduce the area their language is used. This is regionalist exacerbation is illustrated by certain of the student slogans, proclaiming “Oromia for Oromos” and by the start of misdemeanours against Amhara farmers obliged to leave their land and take refuge in Addis Ababa.

Certain TPLF officials have no qualms to explain that in their view, some ultra-regionalist elements of the ruling OPDO are discreetly fueling this student protest movement against the Master Plan.

Read more: http://www.madote.com/2014/05/ethiopian-regime-quietly-disintegrating.html#ixzz31d66oVVH

April 22, 2014

Ethiopia’s ‘villagisation’ scheme fails to bear fruit

MDG:  Ethiopia's forced villagisation scheme in Gambella province

In the village of Elay, people are defying the government and returning home. Photograph: William Davison

The orderly village of Agulodiek in Ethiopia‘s western Gambella region stands in stark contrast to Elay, a settlement 5km west of Gambella town, where collapsed straw huts strewn with cracked clay pots lie among a tangle of bushes.

 

Agulodiek is a patch of land where families gradually gathered of their own accord, while Elay is part of the Ethiopian government’s contentious “villagisation” scheme that ended last year. The plan in Gambella was to relocate almost the entire rural population of the state over three years. Evidence from districts surrounding Gambella town suggest the policy is failing.

 

Two years ago people from Agulodiek moved to Elay after officials enticed them with promises of land, livestock, clean water, a corn grinder, education and a health clinic. Instead they found dense vegetation they were unable to cultivate. After one year of selling firewood to survive, they walked back home.

 

“All the promises were empty,” says Apwodho Omot, an ethnic Anuak, sitting in shade at Agulodiek. There is a donor-funded school at the village whose dirt paths are swept clear of debris, and the government built a hand pump in 2004 that still draws water from a borehole. Apwodho’s community says they harvest corn twice a year from fertile land they have cleared. “We don’t know why the government picked Elay,” she says.

 

Gambella region’s former president Omod Obang Olum reported last year that 35,000 households had voluntarily moved from a target of 45,000. The official objective had been to cluster scattered households to make public service delivery more efficient. Critics such as Human Rights Watch said the underlying reason was to clear the way for agricultural investors, and that forced evictions overseen by soldiers involved rape and murder. The Ethiopian government refute the allegations.

 

Last month the London-based law firm Leigh Day & Co began proceedings against the UK Department for International Development (DfID) at the high court after a man from Gambella alleged he suffered abuse when the agency supported the resettlement scheme. Since 2006, DfID and other donors have funded a multibillion-dollar programme in Ethiopia that pays the salaries of key regional government workers such as teachers and nurses through the Protection of Basic Services scheme.

 

A DfID spokesman said: “We will not comment on ongoing legal action, however, the UK has never funded Ethiopia’s resettlement programmes. Our support to the Protection of Basic Services Programme is only used to provide essential services like healthcare, schooling and clean water.”

 

Karmi, 10km from Gambella town, is a newly expanded community for those resettled along one of the few tarmac roads. Two teachers scrub clothes in plastic tubs on a sticky afternoon. A herd of goats nibble shrubs as purple and orange lizards edge up tree trunks. There is little activity in the village, which has bare pylons towering over it waiting for high-voltage cables to improve Gambella’s patchy electricity supply.

 

The teachers work in an impressive school built in 2011 with funds from the UN refugee agency. It has a capacity of 245 students for grades one to five – yet the teachers have only a handful of pupils per class. “This is a new village but the people have left,” says Tigist Megersa.

 

Kolo Cham grows sorghum and corn near the Baro river, a 30-minute walk from his family home at Karmi. The area saw an influx of about 600 people at the height of villagisation, says Kolo, crouching on a tree stump, surrounded only by a group of children with a puppy. Families left when they got hungry and public services weren’t delivered. “They moved one by one so the government didn’t know the number was decreasing,” he says.

 

The Anuak at Karmi have reason to fear the authorities, particularly Ethiopia’s military. Several give accounts of beatings and arrests by soldiers as they searched for the perpetrators of a nearby March 2012attack on a bus that killed 19. The insecurity was a key factor in the exodus, according to residents.

 

As well as the Anuak, who have tended crops near riverbanks in Gambella for more than 200 years, the region is home to cattle-herding Nuer residents, who began migrating from Sudan in the late 19th century. Thousands of settlers from northern Ethiopia also arrived in the 1980s when the highlands suffered a famine. The government blamed the bus attack on Anuak rebels who consider their homeland colonised.

 

David Pred is the managing director of Inclusive Development International. The charity is representing Gambella residents, who haveaccused the World Bank of violating its own policies by funding the resettlement programme. An involuntary, abusive, poorly planned and inadequately funded scheme was bound to fail, he says. “It requires immense resources, detailed planning and a process that is truly participatory in order for resettlement to lead to positive development outcomes,” he adds.

 

Most of flood-prone Gambella, one of Ethiopia’s least developed states, is covered with scrub and grasslands. Inhospitable terrain makes it difficult for villagisation to take root in far-flung places such as Akobo, which borders South Sudan. Akobo is one of the three districts selected for resettlement, according to Kok Choul, who represents the district in the regional council.

 

In 2009, planners earmarked Akobo for four new schools, clinics, vets, flourmills and water schemes, as well as 76km of road. But the community of about 30,000 has seen no change, says 67-year-old Kok, who has 19 children from four wives. “There is no road to Gambella so there is no development,” he says. One well-placed civil servant explains that funds for services across the region were swallowed by items such as daily allowances for government workers.

 

A senior regional official says the state ran low on funds for resettlement, leading to delivery failures and cost-cutting. For example, substandard corn grinders soon broke and have not been repaired, he says. The government will continue to try to provide planned services in three districts including Akobo this year and next, according to the official.

 

However, the programme has transformed lives, with some farmers harvesting three times a year, says Ethiopia’s ambassador to the UK, Berhanu Kebede. The government is addressing the “few cases that are not fully successful”, he says. Service provision is ongoing and being monitored and improved upon if required, according to Kebede.

 

At Elay, Oman Nygwo, a wiry 40-year-old in cut-off jeans, gives a tour of deserted huts and points to a line of mango trees that mark his old home on the banks of the Baro. He is scathing about the implementation of the scheme but remains in Elay as there is less risk of flooding. There was no violence accompanying these resettlements, Oman says, but “there would be problems if the government tried to move us again”.

April 7, 2014

20 years after Rwanda – Ethiopia’s ‘slow genocide’ in the Omo Valley

A ‘slow genocide’ is unfolding in Ethiopia – one driven by greed rather than hatred. With Chinese and World Bank finance, massive dams and plantations are robbing the Omo Valley’s 500,000 indigenous people of their land and water. The UK ‘sees no evil’.

If current plans to create new plantations continue to move forward, Lake Turkana could drop as much as 16 to 22 meters.

New satellite imagery shows extensive clearance of land used by indigenous groups to make way for state-run sugar plantations in Ethiopia‘s Lower Omo Valley.

According to Human Rights Watch and International Rivers, virtually all of the traditional lands of the 7,000-member Bodi indigenous group have been cleared in the last 15 months, without adequate consultation or compensation. HRW has also documented the forced resettlement of some indigenous people in the area.

The land clearing is part of a broader Ethiopian government development scheme in the Omo Valley – a United National Educational, Scientific and Cultural Organization (UNESCO) World Heritage Site -including dam construction, sugar plantations, and commercial agriculture.

500,000 indigenous people left without water

The project will consume the vast majority of the water in the Omo River basin, potentially devastating the livelihoods of the 500,000 indigenous people in Ethiopia and neighboring Kenya who directly or indirectly rely on the Omo’s waters for their livelihoods.

“Ethiopia can develop its land and resources but it shouldn’t run roughshod over the rights of its indigenous communities“, said Leslie Lefkow, deputy Africa director at Human Rights Watch.

“The people who rely on the land for their livelihoods have the right to compensation and the right to reject plans that will completely transform their lives.”

Forced relocation and land clearance

A prerequisite to the government’s development plans for the Lower Omo Valley is the relocation of 150,000 indigenous people who live in the vicinity of the sugar plantations into permanent sedentary villages under the government’s deeply unpopular ‘villagization’ program.

Under this program, people are to be moved into sedentary villages and provided with schools, clinics, and other infrastructure. As has been seen in other parts of Ethiopia, these movements are not all voluntary.

Satellite images analyzed by Human Rights Watch show devastating changes to the Lower Omo Valley between November 2010 and January 2013, with large areas originally used for grazing cleared of all vegetation and new roads and irrigation canals crisscrossing the valley.

Lands critical for the livelihoods of the agro-pastoralist Bodi and Mursi peoples have been cleared for the sugar plantations. These changes are happening without their consent or compensation, local people told Human Rights Watch.

Free and informed consent?

Governments have a duty to consult and cooperate with indigenous people to obtain their free and informed consent prior to the approval of any project affecting their lands or territories and other resources.

The imagery also shows the impact of a rudimentary dam built in July 2012 that diverted the waters of the Omo River into the sugar plantations. Water rapidly built up behind the shoddily built mud structure before breaking it twice.

The reservoir created behind the dam forced approximately 200 Bodi families to flee to high ground, leaving behind their crops and their homes.

The lure of year-round commercial agriculture

In a 2012 report Human Rights Watch warned of the risk to livelihoods and potential for increased conflict and food insecurity if the government continued to clear the land.

The report also documented how government security forces used violence and intimidation to make communities in the Lower Omo Valley relocate from their traditional lands, threatening their entire way of life with no compensation or choice of alternative livelihoods.

The development in the Lower Omo Valley depends on the construction upstream of a much larger hydropower dam – the Gibe III, which will regulate river flows to support year-round commercial agriculture.

new film produced by International Rivers, ‘A Cascade of Development on the Omo River’, reveals how and why the Gibe III will cause hydrological havoc on both sides of the Kenya-Ethiopia border.

Lake Turkana – waters could drop 22 meters

Most significantly, the changes in river flow caused by the dam and associated irrigated plantations could cause a huge drop in the water levels of Lake Turkana, the world’s largest desert lake and another UNESCO World Heritage site.

Lake Turkana receives 90% of its water from the Omo River and is projected to drop by about two meters during the initial filling of the dam, which is estimated to begin around May 2014.

If current plans to create new plantations continue to move forward, the lake could drop as much as 16 to 22 meters. The average depth of the lake is just 31 meters.

The river flow past the Gibe III will be almost completely blocked beginning in 2014. According to government documents, it will take up to three years to fill the reservoir, during which the Omo River’s annual flow could drop by as much as 70%.

After this initial shock, regular dam operations will further devastate ecosystems and local livelihoods. Changes to the river’s flooding regime will harm agricultural yields, prevent the replenishment of important grazing areas, and reduce fish populations – all critical resources for livelihoods of certain indigenous groups.

These developments must be halted

The government of Ethiopia should halt development of the sugar plantations and the water offtakes until affected indigenous communities have been properly consulted and give their free, prior, and informed consent to the developments, Human Rights Watch and International Rivers said.

The impact of all planned developments in the Omo / Turkana basin on indigenous people’s livelihoods should be assessed through a transparent, independent impact assessment process.

“If Ethiopia continues to bulldoze ahead with these developments, it will devastate the livelihoods of half a million people who depend on the Omo River”, said Lori Pottinger, head of International Rivers’ Ethiopia program.

“It doesn’t have to be this way – Ethiopia has options for managing this river more sustainably, and pursuing developments that won’t harm the people who call this watershed home.”

Background

Ethiopia’s Lower Omo Valley is one of the most isolated and under-developed areas in East Africa. At least eight different groups call the Omo River Valley home and the livelihood of each of these groups is intimately tied to the Omo River and the surrounding lands.

Many of the indigenous people that inhabit the valley are agro-pastoralist, growing crops along the Omo River and grazing cattle.

In 2010, Ethiopia announced plans for the construction of Africa’s tallest dam, the 1,870 megawatt Gibe III dam on the Omo River. Controversy has dogged the Gibe III dam ever since.

The Ethiopian government announced even more ambitious plans for the region in 2011, including the development of at least 245,000 hectares of irrigated state-run sugar plantations. Downstream, the water-intensive sugar plantations, will depend on irrigation canals.

Although there have been some independent assessments of the Gibe dam project and its impact on river flow and Lake Turkana, to date the Ethiopian government has not published any environmental or social impact assessments for the sugar plantations and other commercial agricultural developments in the Omo valley.

Funding from China, World Bank, African Development Bank

Of all the major funders who considered the dam, only China’s Industrial and Commercial Bank of China (ICBC) provided financing.

The World Bank, African Development Bank, and European Investment Bank all declined to fund it, though the World Bank and African Development Bank have financed related power lines.

According to the regional government plan for villagization in Lower Omo, the World Bank-supported Pastoral Community Development Project (PCDP) is funding some of the infrastructure in the new villages.

Despite concerns over human rights abuses associated with the villagization program that were communicated to Bank management, in December 2013 the World Bank Board approved funding of the third phase of the PCDP III.

PCDP III ostensibly provides much-needed services to pastoral communities throughout Ethiopia, but according to government documents PCDP also pays for infrastructure being used in the sedentary villages that pastoralists are being moved to.

The US Congress has acted – but not the UK

The United States Congress in January included language in the 2014 Appropriations Act that puts conditions on US development assistance in the Lower Omo Valley requiring that there should be:

  • consultation with local communities;
  • that the assistance “supports initiatives of local communities to improve their livelihoods”;
  • and that no activities should be supported that directly or indirectly involve forced evictions.

However other donors have not publicly raised concerns about Ethiopia’s Lower Omo development plans.

Justine Greening, the British Secretary of State for International Development, in 2012 stated that her Department for International Development (DFID) was not able to“substantiate the human rights concerns” in the Lower Omo Valley – even though DFID officials heard these concerns directly from impacted communities in January 2012.

 

April 5, 2014

Ethiopian economy is failing to provide basic necessities to the people, despite the government claims of economic growth

Filed under: Ethiopian Economy — ethiopiantimes @ 10:57 pm
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Evidence clearly suggests that the economy is failing to provide basic necessities to the Ethiopian people, despite the government claims of economic growth. Officials need to examine and discuss the quality of life beyond the GDP growth.

Kefeyalwe weldegiorgies (not his real name), a thirty-four-year-old physics teacher at one of the high schools in Harer, has been in the teaching profession since 2001. If you knew him four or five years ago, you likely remember him as the best teacher who used to tell everyone how much he loved teaching. This is understandable, as he was one of only a few among his fellow staff members admired by their pupils for their teaching methodology and good manners.

Kefeyalwe is a completely different chap today. He has lost his appetite for going to work and meeting his professional obligations. For him, there was no correlation between his willingness to teach and his salary earnings even during the first few years of his career. Now, it seems that those “good old days” are gone. “Imagine living on a monthly disposable income of Birr 1754 and worrying about my professional competency,” he grumbled.

Five years ago, Kefeyalwe was able to cover at least his monthly expenses for basic necessities with a salary of Birr 1250. “I also used to save some amount of it,” he explained. Despite the fact that his salary was raised three times over the last five years, he is no longer able to cover his basic necessities today, let alone save for the future. “The question is not how to save but how to survive.”

Being paid this sum of money may seem a luxury to the majority of Ethiopians; many wish they could get even half of it. Unfortunately, the tangible facts suggest otherwise. The real value of such an amount indicates nothing more than the face value of the currency. The prices of major commodities bundles have tripled in recent days and significantly devalued the Birr.

The high price trend that the country is currently experiencing is causing the living standards of many people to plummet to the worst possible conditions. 39 percent of people were classified as living in extreme poverty, on a $1.25 per day threshold. That is the old story. A “new” day has arrived to polish the old threshold, at least theoretically. Even worse, a new study tells us that even Ethiopian professionals like Kefeyalwe now also fall below the minimum living standards.

The new poverty index developed by Oxford University and the United Nations Development Program has come up with new findings. The Multi Dimensional Poverty Index (MPI), which measures multidimensional aspects of poverty, shows that 90 percent of the Ethiopian people are today living in extreme poverty.

The MPI is intended to assess the nature and intensity of poverty at the individual level according to three critical dimensions, namely education, health and standard of living. According to the study, Ethiopia has the lowest performance indices in all three aspects and said to be the poorest of the poor. For the last two decades, the “$1.00 per day” and then the “$1.25 per day” thresholds have been highly criticized for focusing solely on income. Economists have argued that family income cannot be the only determinant, whether that particular family is extremely poor or not. As Nobel Prize winning economist Amartya Sen clearly points out, using income as a major determinant to measure human progress offers a narrow view of development. Simply earning more than $1.25 per day cannot, for instance, clearly show whether children have access to school and health care.

Considering those critiques, the new index tries to address both individual and national poverty levels by using 10 indicators. Thus, educational access for children, health services for infants and mothers and many other dimensions are assessed when measuring poverty levels. More than answering the usual “who is poor” question, it also tells us how they are poor. The MPI, estimates the poverty levels across 104 developing nations; the greater the MPI value, the greater the level of poverty in a country. This value reflects both the incidence (percentage of people who are poor) and intensity of poverty–the sum of weighted deprivations that each household faces at the same time. Accordingly, the MPI value of Ethiopia is 0.58. This value is even greater than that of neighboring countries such as Somalia and Kenya.

At home, however, the music is different. According to Ethiopian government statistics, poverty levels have been decreasing as a result of the “double digits economic growth” rhetoric. It has been proclaimed over and over again that the quality and access to basic education and health services have improved. Yet the MPI indicates that school enrolment in Ethiopia is far below the sub-Saharan average. 84.9 percent of school-aged children are not attending schools in years one to eight; 81.5 percent are further deprived of schooling, unable to complete even five years of education. The living standard of the majority of Ethiopians is also declining. The MPI indicates that 94.1 percent of people are poor and deprived of at least three of the living standard indicators–primarily assets, cooking fuels, electricity, floor (a household is said to be deprived in floor if the household has dirt, sand or dung floor.. for instance, 87.5 people of Ethiopia is said to be poor and deprived in floor), water and sanitation.

Consequently, 54.3 percent of the people lack access to clean water, while 89.8 percent cook using dung, wood or charcoal. Evidence clearly suggests that the economy is failing to provide basic necessities to the Ethiopian people, despite the government claims of economic growth. Officials need to examine and discuss the quality of life beyond the GDP growth. Rather, they prefer to stick with their double-digit rate projections, although no research can be seen to support their claims. In the meantime, the quality of life for Kefeyalwe and his colleagues is diminishing, and most of them are joining the poor majority. This begs the question: who will comprise the intended middle class group if Kefeyalwe is slipping behind?

March 30, 2014

Ethiopian farmer gets legal aid from UK – to sue UK for giving aid to a brutal regime of Ethiopia

Filed under: UK — ethiopiantimes @ 12:10 pm
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An Ethiopian farmer has been given legal aid in the UK to sue Britain – because he claims millions of pounds sent by the UK to his country is supporting a brutal regime that has ruined his life.Gift: Prime Minister David Cameron claims the donations are a mark of Britain's compassion

He says UK taxpayers’ money –  £1.3 billion over the five years of the coalition Government – is funding a despotic one-party state in his country that is forcing thousands of villagers such as him from their land using murder, torture and rape.

The landmark case is highly embarrassing for the Government, which has poured vast amounts of extra cash into foreign aid despite belt-tightening austerity measures at home.

Prime Minister David Cameron claims the donations are a mark of Britain’s compassion.

But the farmer – whose case is  set to cost tens of thousands of pounds – argues that huge sums handed to Ethiopia are breaching the Department for International Development’s (DFID) own human rights rules.

He accuses the Government of devastating the lives of some of the world’s poorest people rather than fulfilling promises to help them. The case comes amid growing global concern over Western aid propping up corrupt and repressive regimes.

If the farmer is successful, Ministers might have to review major donations to other nations accused of atrocities, such as Pakistan and Rwanda – and it could open up Britain to compensation claims from around the world.

Ethiopia, a key ally in the West’s war on terror, is the biggest  recipient of British aid, despite repeated claims from human rights groups that the cash is used to crush opposition.

DFID was served papers last month by lawyers acting on behalf of ‘Mr O’, a 33-year-old forced to abandon his family and flee to a refugee camp in Kenya after being beaten and tortured for trying to protect his farm.

He is not seeking compensation but to challenge the Government’s approach to aid. His name is being withheld to protect his wife and six children who remain in Ethiopia.

‘My client’s life has been shattered by what has happened,’ said Rosa Curling, the lawyer handling the case. ‘It goes entirely against what our aid purports to stand for.’

 

Mr O’s family was caught in controversial ‘villagisation’ programmes. Under the schemes, four million people living in areas opposed to an autocratic government dominated by men from the north of the country are being forced from lucrative land into new villages.

Their land has been sold to foreign investors or given to Ethiopians with government connections.

People resisting the soldiers driving them from their farms and homes at gunpoint have been routinely beaten, raped, jailed, tortured or killed.

Exodus: The farmer claims villagers are being attacked by troops driving them from their land

Exodus: The farmer claims villagers are being attacked by troops driving them from their land

 

‘Why is the West, especially the UK, giving so much money to the Ethiopian government when it is committing atrocities on my people?’ asked Mr O when we met last year.

His London-based lawyers argue that DFID is meant to ensure recipients of British aid do not violate human rights, and they have failed to properly investigate the complaints.

Human Rights Watch has issued several scathing reports highlighting the impact of villagisation and showing how Ethiopia misuses aid for political purposes, such as diverting food and seeds  to supporters.

Concern focuses on a massive scheme called Protection of Basic Services, which is designed to upgrade public services and is part-funded by DFID.

Force: Ethiopian federal riot police point their weapons at protesting students in a square in the country's capital, Addis Ababa

Force: Ethiopian federal riot police point their weapons at protesting students in a square in the country’s capital, Addis Ababa

 

Critics say this cash pays the salaries of officials implementing resettlements and for infrastructure at new villages.

DFID officials have not interviewed Mr O, reportedly saying it is too risky to visit the United Nations-run camp in Kenya where he is staying, and refuse to make their assessments public.

A spokesman said they could not comment specifically on the legal action but added: ‘It is wrong to suggest that British development money is used to force people from their homes. Our support to the Protection of Basic Services programme is only used to provide healthcare, schooling, clean water and other services.’

BRUTALLY DRIVEN FROM HIS FERTILE LAND – AND HE BLAMES BRITAIN 

Intimidation: Riot police confront a man (not the claimant) near the Tegbareed Industrial College as officers beat rock-throwing students during a demonstration

Intimidation: Riot police confront a man (not the claimant) near the Tegbareed Industrial College as officers beat rock-throwing students during a demonstration

 

As he showed me  pictures on his mobile phone of his homeland, the tall, bearded farmer smiled fondly. ‘We were very happy growing up there and living there,’ he said. This was hardly surprising: the lush Gambela region of Ethiopia is a fertile place of fruit trees, rivers and fissures of gold, writes Ian Birrell

That was the only smile when I met Mr O in the Dadaab refugee camp in Kenya last year. He told me how his simple family life had been destroyed in seconds – and how he blames British aid for his misery. ‘I miss my family so much,’ he said. ‘I don’t want to be relying on handouts –  I want to be productive.’

His nightmare began in November 2011 when Ethiopian troops accompanied by officials arrived in his village and ordered everyone to leave for a new location.

Men who refused were beaten and women were raped, leaving some infected with HIV.

I met a blind man who was  hit in the face and a middle-aged mother whose husband was  shot dead beside her – she still bore obvious the scars from  her own beating and rape by three soldiers.

Unlike their previous home, their new village had no food, water, school or health facilities. They were not given farmland and there were just a few menial jobs.

‘The government was pretending it was about development,’ said Mr O, 33. ‘But they just want to push the indigenous people off so they can take our land and gold.’

 

After speaking out against forced relocations and returning to his village, Mr O was taken to a military camp where for three days he was gagged with a sock in his mouth, severely kicked and beaten with rifle butts and sticks.

‘I thought it would be better  to die than to suffer like this,’ he  told me.

Afterwards, like thousands of others, he fled the country; now he lives amid the dust and squalor of the world’s largest refugee camp. He says their land was then given to relatives of senior regime figures and foreign investors from Asia and the Middle East.

‘I am very angry about this aid,’ he said. ‘Britain needs to check what is happening to its money.
‘I hope the court will act to stop the killing, stop the land-grabbing and stop your Government supporting the Ethiopian government behind this.’

As the dignified Mr O said so sagely, what is happening in his country is the precise opposite  of development.

Read more: http://www.dailymail.co.uk/news/article-2592534/Is-farcical-use-taxpayers-money-Ethiopian-gets-legal-aid-UK-sue-giving-aid-Ethiopia.html#ixzz2xRmd94Qr
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March 16, 2014

Ethiopia’s Growing Debt Appetite and Eurobond

Filed under: Debt — ethiopiantimes @ 2:42 pm
Tags: , , , , , ,

By Ezana Kebede

March 16, 2014

The Ethiopian government has significantly increased its borrowing in recent years. Debt-to- GDP ratio has reached an all time high of 35 percent and continues to grow. Lately, the country has also been shifting slowly from concessional loans to market based loans. The Ethiopian Ministry of Finance & Economic Development (MOFED) data shows that, since the beginning of the 2008 world financial crisis through 2013, Ethiopia’s external debt has grown by 156 percent from USD 4.35 billion to USD 11.17 billion. The total public outstanding debt was at USD 16.11 billion, excluding domestic lending to State Owned Enterprises. During the same period, IMF was estimating Ethiopia’s GDP at Birr 877.5 Billion (USD 46 billion).

At the moment, Ethiopia has a government guaranteed soft loan program with a rate below 2 percent, a grace period of up to 10 years, and longer duration loans with multilateral development banks, The World Bank loans maturing in 40 years and the African Development Bank loans maturing in 50 years. Both institutions require a service charge of 0.75 percents.

Looking at the current debt structure, Ethiopia has also borrowed at low rates from non-Paris Club lenders, particularly China and India. But most of the loans with China are floating or adjustable rates ranging between LIBOR 6 month +1.5 basis points to LIBOR 6month + 3 basis points, with a grace period of up to 6 years and maturity of 15 years. Ethiopia was able to get this low rate due to captive funding from the likes of Huawei and ZTE. Huawei and ZTE have been lending to Ethio-Telecom making this government owned company solely dependent on Chinese telecommunication equipment providers.

Lately, MOFED has initiated discussions with credit rating agencies with the intention of tapping into the sovereign debt market in search of financing for large investment projects. Ethiopia has not yet issued sovereign debt but is in the process of getting a sovereign rating. One of the renowned credit rating agencies, Moody’s, has visited Ethiopia and met with various stakeholders. This process will enable Ethiopia to be part of the list of countries whose financial standing and credit worthiness is known and thus has the opportunity to gain access to sovereign bonds.

The Prime Minister of Ethiopia, Hailemariam Desalegn, has recently announced that the government has hired the boutique French investment bank Lazard Ltd. as an advisory service to help facilitate the country’s credit rating in order to issue a sovereign bond. Most likely the underwriters will be a consortium of French banks. Credit rating is a mechanism that provides access to the international debt market. But in the end, it all boils down to the perception of the country’s ability to pay its debt. Until now, Ethiopia had no plan to get a credit rating and so far is unable to issue debt instruments on the international capital market. There is a strong indication that Ethiopia is headed towards borrowing at market rate. As reported on Bloomberg news,” the country has plans to issue not only Eurobonds but other bonds as well.”

Eurobond is a foreign currency denominated bond, usually in USD, EUR or JPY. According to Deutsche Bank AG, fourteen sub-Saharan African countries, namely Senegal, Zambia, Gabon, Nigeria, Namibia, Tanzania, Republic of Congo, Rwanda, Mozambique, Ghana, Ivory Coast, South Africa, Seychelles and Namibia have issued Eurobond. The average sub-Saharan Eurobond is paying an approximate yield of 6.9 percent, but this low rate will not remain low forever. The main reason for the recent growth in Africa’s sovereign borrowing is due to low yields in Europe and US sovereign bonds resulting in a strong demand from investors to look at emerging market bonds, such as those in Africa. The 2008 global financial crisis and global economy has also made grants harder to come by and donor funds usually come with attached conditions such as good governance.

For Ethiopia, obtaining a credit rating and issuing Eurobonds will create greater transparency and encourage sound public debt management policies. Moreover, as the current Growth Transformation Plan (GTP) 2010-2015 nears its end, Ethiopian authorities should re-focus their energy on establishing both primary and secondary markets for government and private debt issuance, where bonds are traded.

Two of the reasons luring African countries to explore the Eurobond market as an alternative source of financing with cheaper funding costs are inflation and fluctuating exchange rates in African countries. Inflation and fluctuating currencies make it more expensive to issue local bonds in the local markets. However, the story in Ethiopia is different in that the country does not have a well-developed primary market. In the absence of capital markets, domestic bonds were not adjusting for inflation, and investors (bond holders) were not getting the true market value.”

Furthermore, African countries that are reliant on commodities export to finance debt with Eurobond will be faced with difficulties to meet their debt obligations. Ethiopia is no different, for example, if there is a significant drop in the price of coffee on the international market, the Birr will as a result depreciates against major currencies and the cost of repaying debt will be higher. Regardless, it seems authorities in Ethiopia are determined to get additional funding by issuing sovereign bond.

Over time, foreign currency denominated bonds issued by African countries will not continue to be less costly. Especially when we take into consideration the ongoing development where the US Federal Reserve is tapering its long term asset purchase program which will set the US interest rate to rise, emerging market investors will be flocking back to the US market to capture higher returns. In order to attract investors African countries will have to issue their bonds at higher coupon rates, which also means authorities in Ethiopia and elsewhere in Africa will pay higher borrowing costs.

Moreover, in 2013 Ethiopian central government’s total domestic outstanding debt was at USD 4.9 billion, of which USD 634 million was issued as government bonds. The total domestic debt consists of Treasury Bill USD 1.37 billion at 59 percent and Direct Advance (MOFED overdraft from Central Bank) USD 2.9 USD billion, at 27 percent of the total domestic debt outstanding.

The current economic policy in Ethiopia is government led and policy makers should take into account that the growing public debt borrowing will not cause a “crowding out effect” on private sector funding. The government of Ethiopia is borrowing 31 percent of its debt locally. Unless there is a strong commitment by the government of Ethiopia to reform its financial sector, such as updating its commercial code and securities laws, it is less likely that the recently issued agency debt instruments, the Millennium Bond and the Diaspora Bond, will be successful.

Indeed, there is a strong case for establishing a domestic debt market in Ethiopia. Good examples are the low subscription of the agency bonds, EEPCO Millennium Corporate Bond Rate (Face Value 100, fixed interest rate between 4-5 percent and maturing between 5-10 years), and the Renaissance-Dam Bond ( Face Value USD 50, adjustable rate between LIBOR+125 basis point to LIBOR +200 basis point, maturing between 5-8 years).
Bloomberg news, quoting Berket Simon, the former Minister of Information of Ethiopia, reported “Birr 5 billion has been raised from the public by selling bonds.”Birr 5 billion translates to USD 263 million which is a small fraction of the USD 4.5 billion estimated funding needed to build the Grand Ethiopian Renaissance Dam.

There are several reasons for the meager Ethiopian government bonds subscription. (i) The double digit inflation rate at the time the bonds were issued gave bond holders a negative return on their investment. Agency bond holders in Ethiopia are unable to realize the true market value of their investments in government bonds and could only redeem the full amount at maturity; (ii) Economic and political risk considerations should have been addressed. Dilip Ratha World Bank Lead Economist and an expert on Migration and Remittance, was once quoted on Diaspora Bond and political risk considerations stating; “The Diaspora purchase bonds as long as they believe they have influence on policies”. ( iii) The inadequate bond subscription should have been avoided by establishing a well organized market similar to the Ethiopian Commodities Exchange Board for both primary and secondary bond markets, for domestic borrowing by the public and private sector, before venturing out to issue government bonds in the primary market.

Experts on Ethiopian economy stated, “the primary capital market in Ethiopia is characterized by low yield, markets are entirely dominated by state owned enterprises and there is a lack of competition. Therefore, under the current condition it is difficult to think of a secondary market.”
MOFED had a total projected expenditure of Birr 690 billion (USD 36 billion), 80 percent allocated to capital expenditure of which only 27 percent, or Birr 150 billion, was earmarked for road construction during the 2010-15 GTP.

Ethiopian policy makers should not only focus on the foreign currency needed for capital expenditure, but should rethink the country’s ownership and banking laws as well.
National Bank of Ethiopia (NBE) is showing some positive signs like the current move toward establishing a centralized credit bureau system for individual borrowers which could also extend for institutional borrowers through the formation of debt markets.

Ways to achieve sound public debt management and encourage the public sector include: (i) having no restriction on private corporations and financial intuitions from issuing debt financing in the local market; (ii) making sure that banking directives and regulations are predictable and not arbitrary, giving confidence to the private sector to participate in economic development of the country; (iii) making sure that NBE regulators are working in consultation with the banking industry and private sector at large; (v) and finally, while it is a positive sign that policy makers are aggressively looking to obtain credit rating to raise debt capital, they should also continue to strengthen the NBE’s capabilities.

In conclusion, in order to engage the private sector and retail investor (small investor) in the economic development of the country, Ethiopian policy makers need to establish a properly functioning primary and secondary market for debt issuance. There should be a regulated primary market for initial public offering of newly formed share companies. The current privatization program should jump start the financial intermediary functions of brokers and dealers, enabling the retail investor to participate in the acquisition of government owned public enterprises as a share company. But without a policy change and properly functioning primary market the privatization program will only benefit the highest bidder and not promote wealth distribution across the board.

The writer: is a graduate student in finance at Johns Hopkins University and could be reached at Ethiopia.capitalmarkets@gmail.com

References:

Bloomberg news http://www.bloomberg.com/news/2013-05-29/ethiopia-to-accommodate-nations-concerned-over-dam-on-nile-river.html

Deutsche Bank-Capital Markets in Sub-Sahara Africa
https://www.dbresearch.com/PROD/DBR_INTERNET_EN-PROD/PROD0000000000321468/Capital+markets+in+Sub-Saharan+Africa.pdf

Ethiopia Ministry of Finance and Economic Development, Source for Borrowing Cost: Public Sector Debt Statistical Bulletin

FDRE: Growth Transformation Plan (GTP) 2010-2015. Volume 1 Main Text

Invitation to Bidhttp://www.ethiopianembassy.org/PDF/Privatization_Opportunities_2013-2014.pdf

The Reporter, http://www.thereporterethiopia.com/index.php/news-headlines/item/1604-moody%E2%80%99s-in-town
US Federal Reserve
http://www.federalreserve.gov/newsevents/press/monetary/20131218a.htm

Note:
National Bank of Ethiopia USD/Birr exchange rate of 18.8598 on October 10/13/2013 was used.

LIBOR is the (London Inter Bank Borrowing Rate) is an index for floating rating or adjustable rate

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