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Ermias Amelga in detention over Imperial hotel transaction

The infamous business person Ermyas T. Amelga was arrested by the Federal Police and appeared before the Federal High Court on Friday, January 11. The arrest was related to the procurement process of the Imperial Hotel which he sold on February 2, 2012.
The government military complex, Metals and Engineering Corporation (MetEC), bought the hotel with 75 million birr from Ermyas with two round payments, divided within several months. The hotel was bought by Access Real-estate two years before at a total cost of 47 million birr, from Afaw Tefera’s family.
The hotel which lies on 3,411sqm was among the suspected buildings that MetEC owned which were subject to corruption.
Bekalu Zeleke takes reigns of BoA

By Muluken Yewondwossen
The former chief economist and vice governor of the National Bank of Ethiopia (NBE), Bekalu Zeleke, began working as president of the Bank of Abyssinia (BoA) a day after the Ethiopian Christmas holyday. In addition three new vice presidents (VPs) were also assigned by the board of directors which is being chaired by Meseret Taye.
A few months ago, the former president, Mulugeta Asmare resigned from his position. When he did so,
Sources said that as per the time frame that Mulugeta gave, the new president officially started his work as of January 8.
The board approved the position of two new VPs about two weeks ago and another one became acting VP during a special meeting of the board of directors held on Thursday.
The three VPs that assigned by the board are Meseret Assfaw, chief enterprise officer, and Daniel Hailu, chief information officer, Asaminew Deribew, who was assigned last Thursday will manage the chief customer service, according to sources.
Currently the bank has five VPs and two executives under its structure.
Under his leadership in the past five years Mulugeta has registered magnificent performance at the bank. Previously they experienced trouble with non-performing loans. Bekalu, who also registered several achievements under his leadership at Commercial Bank of Ethiopia (CBE), the state financial giant, has been assigned as chief economist and vice governor of the central bank by Prime Minister Abiy Ahmed (PhD), but he left after a couple of months service.
When he was president of CBE he registered massive deposit mobilization and expanded the bank’s branches by close to four fold. The total number of CBE’s branches has now reached about 1,300 from 220 as of June 30, 2010.
Bekalu has been president of CBE for close to a decade by replacing Abe Sano, who is now president of Oromia International Bank.
BoA is one of the two oldest private banks and in the past decade it has made several remarkable achievements.
In the past fiscal year the bank that has 2.56 billion birr paid up capital has registered assets of 31.9 billion birr for the year, which was 25.8 billion birr a year ago, while their capital has reached 4.3 billion birr which is a 27 percent increase. The paid up capital, assets and others statements put the bank one of the top three on the private banking industry.
The number of depositors at the bank has dramatically increased. In the 2016 /2017 fiscal year the number of depositors stood at 750,000, while it has now increased by 35 percent and reached more than one million.
Besides the growth in the number of customers the bank’s deposit mobilization went up by five billion birr within a single year.
The report indicated that the total deposit mobilization at the end of June 30, 2018 reached 26 billion birr, which was about 21 billion birr a year ago. The growth of deposit mobilization has placed the bank as one of the most competitive banks and a key player in the sector.
In terms of advances and loans BoA has facilitated close to 4 billion birr during the fiscal year amounting to a total of 18 billion birr.
Loans and advances grew by 28 percent compared with the preceding year. Term loans and over drafts grew by 35 percent. According to BoA’s financial report, the proportion of loans indicated that term loans took the lion’s share by 66 percent and over drafts and advances stood at 21.3 and 12 percent respectively. From the total loans domestic trade took the highest portion followed by exports, construction and industry.
Bekalu Zeleke
Leather’s difficult times

By Muluken Yewondwossen
External challenges like the latest perk of US and China trade war, revised FDI policies besides slow interest of the international market is continuing bleeding local and foreign trade of the Ethiopian leather industry.
The leather sector is one of the major historical sources of hard currency like coffee, while this day it has been substituted by other commodities like horticulture and khat.
The Leather Industry Development Institute (LIDI) stated that the latest trade war between the two world’s biggest economies has affected the export of leather and leather goods.
Berhanu Sirjabo, public relations head of LIDI said that the country’s export has been affected by the trade war between the US and China, who imposed tariffs on each other’s imports.
The public relations head claimed that the trade war affects the country’s revenue directly and indirectly. Both sides would buy our products and export to each other’s country, but this has now slowed due to the tariff that both countries imposed on each other in the past few months.
Experts at the Ethiopian Leather Industries Association (ELIA) said that the sector is going through a serious problem locally even though the international trend like the US China trade war is also pressuring the sector externally.
The leather sector actors are strongly arguing that the leather sector has declined in the past five years, despite the government’s statement that it has shown a slight improvement in investment and export revenue.
Local tannery owners who requested anonymity claimed that the government has been deliberately or ignorantly affecting the sector through its policy which was amended in the past years.
“The sector has been built for nearly seventy years and was expected to brew better achievements in these days, but the reality is different,” they complained.
Yared Alemayehu, owner of Wallia Leather and Leather Products and former president of ELIA, said that the problem in the leather sector is very wide and directly pointed to the government’s policy.
“In the sector we the local actors have over a half century of experience, but all of a sudden in the past five years it has collapsed. It has to be asked why the collapse occurred,” Yared said. “If the problem is seen in one or two factories it would likely be due to mismanagement by the companies but the problem is seen in all actors. Therefore, the government body considers that it is a problem of mismanagement by local companies and lack of competition with FDIs’ that invested in the sector around a decade ago,” he added.
That has caused stakeholders to develop incorrect policy in the sector and replace the former policy that only favor FDIs, according to the sector actors.
“Since the policy change is in favor of FDIs there is another question, does the country benefit in export revenue, value addition, technology and even employment? But the answer is that the sector does not show any change regarding the stated questions,” Yared told Capital.
Ethiopia’s rank in livestock population is 8th in the world while India is not far from Ethiopia in terms of the population number of livestock but the export of India excluding local business has reached USD 17 billion. “When it comes to the Ethiopian leather sector it did not show any change meanwhile the number of the size of FDIs increased,” experts said when pondering the role of FDI and its contribution.
“When FDIs expanded in the country why did the export revenue become stuck at the level where Ethiopian actors performed about a decade ago,” they asked.
They argued that the current export revenue is not comparable from the performance a decade ago.
“Ten years ago we exported natural leather, but now export items for instance footwear produced by synthetic materials is registered as the export of leather goods.”
“If excluding the non leather goods like the synthetic footwear and then comparing the leather export from exports ten years ago the current hard currency generation is lower than what we achieved years back,” they claimed.
“At the past we have earned the same export revenue by only the export of semi finished and finished leather not by exporting footwear. If they said that export of leather goods expanded why did the sector earn the same amount that we have contributed,” they asked.
In 2008 the government has imposed a high levy on the export of raw hide and skins and wet blue, pickle and crust, which are semi processed products to encourage the local production of finished leather and boost the country’s hard currency revenue.
Against the investment proclamation of 2003 the government has allowed foreign investors to invest in the leather sector from scratch which was claimed as illegal and affects the local investors.
The 2003 investment proclamation stated that FDI shall invest from the semi processed; while the local investor is protected to produce from raw to crust on the concept the country has adequate capacity to process by local investors. “But without a law the government has allowed FDI’s to invest from the raw level that we argued it is a displacement of local investors,” experts claimed, “they even amended the investment proclamation that highly favors the FDI without evaluating the outcome of the allowed foreign investors in the sector.”
They argued that the government policy has affected one of the oldest businesses that Ethiopian developed for close to 70 years.
“We have argued that the foreign investors do not have a long term vision and that they are now engaged on environmental challenges, lack of working safety,” they claimed.
Currently about 16 local tanneries have suspended their production, however the government claimed that there are 8, according to sources. The sector has been one of the major areas to manage a huge amount of employees, but it declined.
Experts also claimed that the other reason the sector did not show improvement in revenue is that the FDI’s export their products for their chained companies or affiliates by offering a lower price or under invoice.
“If the sector was protected on some level for local investors the customs shall cross check the cost of production of the finished and goods products, but when we challenged the idea allowing foreign investors to engage on all sectors the officials ridiculed us and blamed us saying that we are backward,” experts claimed.
According to Berhanu, the limited capacity of Ethiopian leather goods manufacturers regarding the management and weak technological capability also negatively affects the sector. “Technological transfer on the sector is the major issue that the sector needs is tackling the inner challenge, while the external challenge is difficult to be solved,” Berhanu said.
“When the technology advanced at the leather industries the sector shall keep the standard and improve the export value and volume,” he argued.
“The Prime Minister shall interfere and solve the problem by changing the policy,” local actors expressed hopefully.
Experts at the association have also stated that the international trends in the past couple of years have changed in the leather sector.
Currently the synthetic industry is booming and major manufacturers are also engaged in the sector that affects the Ethiopian export.
“The sector is very dynamic which also is a significant factor in the slowdown of the Ethiopian leather sector in the past couple of years,” sources at the association said.
According to Berhanu the country has now a capacity to produce 20 million pairs of footwear per annum for the export market, while the revenue expected from the sector has not grown as per the expectation. “Currently the country has a single factory that shall produce 50,000 pairs of footwear per day,” Berhanu indicated.
The country’s revenue from leather and leather goods exports stood at USD 134 million based on the past budget year’s performance.
At the end of the first Growth and Transformation Plan (GTP I) the government has targeted to generate half a billion USD, while the actual performance did not show change for the past decade.
In the past few years the sector investment has grown significantly. For instance the number of tanneries has reached 32 from 20 about a decade ago, but some local tanning facilities became bankrupted, according to the sector actors.
“Previously they have killed the local investors by buying the product with high price and now they are saying they do not want to use the local raw material that is the reason for price reduction and wastage of the national resource,” a tannery owner, who declined to be named, told Capital. “Currently we are very few struggling to service, while most of them are out of the market,” he said. “The companies that currently existing are also in trouble of heavy debt and even consumed significant amount of running cost in the past ten year,” he added, “if the government want the existence for the industry has to right off the debt of the companies what Egypt made in the past.”
However even the number of tanneries increased more, in the past couple of years the raw material price has significantly dropped and that forced to waste the resource. To keep the resource from wastage the government itself is engaged on buying the raw hide and skin from suppliers on major holiday seasons and processed the raw to semi stage via private tanneries.
On the latest holiday, Christmas, the raw hide and skin has been rated a price of up to 25 birr and 35 birr for goat and sheep skin respectively, while the demand of hide is very low that it has been sold by 4 birr per kilogram. The institute official said that lack of industrial salt has been slowed the hide trading on the holiday morning but it has been revived in the afternoon after the collectors encouraged to use edible salt as optional.
There are 24 footwear factories and from those 16 are engaged in the export market. The international trend indicated that the price of footwear is from USD 9 to 23, but the locally produced footwear is not worth more than USD 13.
CCD real-estate
founder summoned to court

By Haimanot Ashenafi
Messele Haile (PhD), founder of the Country Club Developers (CCD), has been summoned to court after people asked for his arrest.
The complainants appeared in court on January 1.
The plaintiffs had paid for six houses each resting on 1,000sqm of land and had been waiting for them over a ten year period. They then sued the real estate company and eventually the Federal High Court ruled in their favor. The court ordered the real estate company to deliver the houses in 16 months.
They were given four more months to complete the import process but still no house materialized. Then, 5 months later the creditors went to the court to force the company to deliver the homes.
Lawyers for CCD told the judge that they couldn’t deliver the houses on time because of the foreign currency shortage and the quality of products the company use for finishing materials.
The applicants wanted over one million birr in damages calculated at 30,000 birr every month of delay in getting the homes.
The applicants also reported to the court that they sent CCD three different letters notifying the company that it had failed to live up to its end of the bargain.
Tamagn Beyene, the lawyer for CCD said that it is illegal to arrest the general manager because he acted in good faith and forces beyond his control caused the company to be unable to finish the house.
A move towards state of the art

Great Run Ethiopia has launched a new website with the latest technology called progressive web apps. The website is able to operate well in every online platform and is mobile friendly. The previous website of the company got 1.7 million hits last year. The development of this new website will eliminate the paper based registration within five years.
“Progressive web application is the latest technology created by Google a few years ago,” Dr. David a delegate from the UK stated. “It takes the advantages of what you get on the desktop to a telephone, which saves a lot of money. The technology is said to add many new features to the website including saving dates and Google can save with it a security certificate.”
The adoption of the new technology is also expected to make the events organized and make it more accessible outside the country and facilitate the communication with its customers.
Online reservations for the 19th Great Run was also launched last week and will be conducted using the website.
Great run
Ministry begins counting water and wash facilities

By Tesfaye Getnet
To get an accurate picture of Ethiopia’s water infrastructure, the Ministry of Water, Irrigation & Energy (MoWIE) has started a count which will take a maximum of two months.
Pipelines that connect villages and houses, communal water, and water stores, and dams will be counted in the census.
The counting will cover all the nine regions and the two city administrations and will involve an estimated 600,000 water facilities and infrastructure.
An audit system, investment return, and software and manual administration drinking water institution will also be looked at during the counting.
To conduct the work, the ministry bought 4,475 tablet computers with USD 2.1 million and 4,000 counters and 500 coordinators are participating in the work.
Seleshi Bekele, Minister of MoWIE told journalists that the counting will be a good thing for all stakeholders who work on water related issues.
“From policymakers to regulators the counting will help us to know exactly where we work and I urge all stakeholders to collaborate with us to finish this task.’’
Seven years ago the Ministry conducted the same kind of counting but the result did not bring about what was expected.
Water crisis is one of the most serious global issues of our time. There are nearly 61 million people living without access to clean water. This means that about 7.5% of the global water crisis is in Ethiopia alone. Plus, nearly 65 million people live without access to improved sanitation, and approximately 27 million people still practice open defecation. The vast majority of those affected live in rural, hard to reach places.
Ethiopia’s future plans for economic growth call for expansion in irrigated agriculture, manufacturing, hydropower and municipal water supply – all of which depend on reliably available water. At the same time, Ethiopia’s population is set to nearly double by 2050, increasing the country’s overall thirst. This demand for water is clustered in cities, which are home today to nearly 20 percent of Ethiopians, compared to only 6 percent in 1960. Historically, Ethiopia’s economic prosperity has been heavily driven by rainfall and water availability. Recent periods of GDP growth and poverty reduction also coincided with periods of more reliable rainfall and greater public investment. In contrast, previous periods of drought have severely constrained economic growth and exacerbated food insecurity. Given the country’s historically highly variable rainfall patterns, the unreliability of rainfall has played a significant role in Ethiopia’s development -- and the health and growth of its children. As of 2014, 40.4 percent of children under age five suffered from stunting. Increased water scarcity decreases crop yields, which causes food insecurity and nutritional shortcomings in the crucial early years of children.
Seleshi Bekele, Minister of MoWIE
Tele to redistribute pay-phones, provide wifi on Ethiopian flights

Plans to charge for Whatsapp, Facebook texts

By Haimanot Ahsneafi

Ethio-telecom and Ethiopian airlines agreed to begin phone call service and WiFi services both on local and international flights.
Ethio-telecom has also decided to collect its existing 800 public pay phones and relocate them in prisons, hospitals and public universities. The telecom also has decided that there will not be more purchase of public phones as the penetration of other technologies diminished the demand.
“We were not getting reasonable revenue from the service and it is not feasible to run the technology without a profit,” said Cherer Aklilu, the Executive Manager of the CEO office. “After the penetration of the mobile phones the use for the public phones has become insignificant and that’s why we decide to relocate them in places where they can serve more.”
The public pay phones, which are already expired according to their production life span, are going to be maintained. The phones were bought before the introduction of the one birr coin and the maintenance is said to introduce the cents too.
The latest relocation will provide customers pay phone services at places where the possibility of access to other kinds of call services are rare.
The telecom also reached an agreement with Ethiopian Airlines to start air connectivity for local and international flights. The service is going to avail traveler’s need for WiFi.
“We have told the airline that we are ready to provide the service and now we are contacting global companies which are going to provide us an access to the satellite,” added Said Aragaw Chief International Business Officer.
The airline stated that it will launch the project after January 15 and that it expects it to transform its business and increase its competence in the global market.
The newly established division in the telecom, international business, also started negotiations with App operators like Whatsapp and Facebook to pay for SMS they send for their users, which was not monetized before.
“Currently we have international voice service agreements with 27 bilateral partners in order to provide voice service,” he said.
Ethio telecom
98% of decisions to prosecute made within 5 months

By Haimanot Ashenafi
The Attorney General announced that it has made decisions about pressing charges on 98% of the files given to them by police over the last five months. Berhanu Tsegaye, Attorney General, told the parliament that among the 304 transboundary crime files sent to the office 232 had been decided on by the Office. There were 894 Economic Crimes and 686 (81%) were decided on, there were 1755 corruption crime files and 1655(94%) were decided on and there were 17,213 miscellaneous crimes files and 17,109(99.4%) were decided on.
The office also issued new licenses. Out of the 235 lawyers who applied 178 were accepted. If a lawyer has a level one license they can try cases in all Federal Courts. The office gave out 129 of these licenses. They also gave out 49 licenses which allow lawyers to try cases in Federal First Instance Courts. The office was able to renew 1,363 existing licenses but 55 applicants were not able to pass the exam so they were denied the license.
The Attorney’s Discipline Board has reviewed 231 complaints and convicted 116 lawyers, while 18 were acquitted, in the past five months. The discipline was unable to rule on 97 other discipline breaches.
Currently, 4,325 lawyers work in the federal justice system, according to Attorney General, Brhanu.
Free legal aid was facilitated for 444 needy people through the Office by Lawyers while 260 are women, 2 are children, 46 youth, and 26 people with disabilities and 37 elderly.
He also revealed the budget usage ratio by the office for the past five months.
The Attorney General said it was difficult to prosecute suspected human rights violators and those accused of corruption because they did not get the corporation desired from the Tigray Regional State. He mentioned that the federal government asked that the former intelligence head be handed over, but the region failed to do so.
Djibouti attracting more Ethiopian tourists

By Muluken Yewondwossen
The National Tourism Office of Djibouti is hoping to attract more Ethiopian tourists now that they have expanded infrastructure and constructed more links between the two countries.
The office wants tourism to make up a higher proportion of the GDP. The tourism office CEO, Osman Abdi Mohamed, is working with the private and public sector to make Djibouti a tourist destination.
One way Djibouti is attempting to make this a reality is to improve service oriented businesses, particularly the logistics sector. Recently the country has opened three new ports including Doraleh Multipurpose Port (DMP), the latest and biggest port in the region. They have also worked hard to improve their transport infrastructure in the past few years.
Ethiopia and Djibouti have become re-linked via a modern electric railway that replaces the century old rail line. The Ethiopian side is also working on developing roads including an express road along the corridor to Djibouti. Recently Djibouti has also launched the development of express roads connecting to Ethiopia.
The logistics sector is the country’s major economic resource, while Ethiopia, which is the most populated nation without a sea outlet in the world, is the major user of its ports. This has been particularly true in the past two decades after a conflict with Eritrea.
“We have beautiful tourism sites for visitors including beautiful beaches, whale sharks and other sea side and inland destinations,” Osman Abdi said.
The sector has registered a 40 percent increase last year
“We are working to market tourism while at the same time attempting to attract international investors like big hotel companies,” he said.
The government has decided to put money into tourism so last March the government organized a national forum on tourism which attracted many stakeholders. The forum came up with a strategic national master plan which will be finished by the end of this month.
The two countries have agreed to cooperate more to integrate tourism. “Our office in collaboration with its counterpart in Ethiopia organized the first meeting between Djibouti and Ethiopian private operators here and the second meeting will be held in Addis Ababa in February,” he added.
In the meeting the two bodies agreed to develop tourism packages together.
He said that Ethiopia has several tourist destinations some even registered by UNESCO. “It is a good opportunity for us also since tourists that visit Ethiopia might come to our beaches or seaside areas,” he added.
Osman Abdi said that in the last two years the numbers of tourists coming after visiting Ethiopia are growing. The CEO said that his office branch will open in Addis Ababa this month.
The master plan includes massive promotion, strengthening the skills of workers and expanding professionalism to boost tourism service, and financing and building facilities for investors in the sector.
The tourism sector contributes three percent to the GDP, which is expected to reach 5 percent in the coming five years. According to the CEO there are now 140 thousand every year and that number is expected to increase to half a million in five years.
Most of the visitors to Djibouti are from France but the country is working to change that. “Now we are also working to attract tourists from China, Ethiopia, and the Gulf States,” the CEO added. He indicated that Ethiopian tourists would enjoy the beach and sea foods that they don’t have in their country. “Ethiopians shall spend their weekend in Djibouti just coming by airplane or cheap transport of train and road,” he added.
“To get more tourists from new countries we want to expand languages like Amharic, Chinese and others,” he said.
Experts like Tadios Getachew, the Ethiopian born diaspora who lived in the US and owns Kuriftu Resorts and Spas, says that these kinds of infrastructural developments will improve the people to people relationship between the two countries. Tadios, who is investing in the hospitality industry in Djibouti, said that Djibouti is only 45 minutes away from Addis Ababa via air transport and with new infrastructure there are more options.
Kuriftu Resorts and Spas has recently inaugurated the first restaurant overlooking the sea in Djibouti city at a cost of USD 2 million. The resort rests on 65.3 hectares of land at Moucha Island, which is a 15 minute boat ride away from Djibouti’s capital.
Osman Abdi Mohamed, CEO of tourism office