‘No to duty free car imports for the Diaspora’
A new study shows that investment projects have begun on only 60pct of the land designated for commercial farming.
The figures were revealed at a discussion held between several hundred Ethiopian Diaspora and the government on April 24 at the Ethiopian Civil Service University.
The numbers indicate that, over the last two decades, 5,400 investors who were either Ethiopian or members of the Diaspora community had each appropriated plots ranging from 500 to 5,000hct mostly in sparsely populated lowland areas of Ethiopia.
Hailemariam Desalegn, Deputy Prime Minister and Foreign Minister, said the government is looking into ways of addressing the problems faced by Ethiopian investors with implementing their projects.
He also said the Ethiopian government is looking into other means of attracting Ethiopians and people of Ethiopian heritage in the horticulture sector, which he said has not drawn as much interest from Ethiopians as opposed to foreign investors.
Recently the Ethiopian government allocated another 3.6 million hectares of land for commercial farming open to both local and international investors of which about half a million hectares have already been prepared.
The Ethiopian government, in addition to mechanized commercial farming, has also set small scale farming and Agro-Pastoralism as ways to boost agricultural production in the country, according to the five year Growth and Transformation Plan (GTP), putting a median target of nine percent and a maximum target of 14.9 percent growth annually for the agricultural sector. In the last Ethiopian fiscal year 2010/11 the sector has registered a 9.5 percent growth.
Responding to criticisms by government officials that the Diaspora investors seem to lack the capacity to execute the projects they took, some participants complained that they have been hampered by the pervading corruption of certain government institutions, bureaucracy and the lack of transparency that comes with it.
Among the major grievance areas for the participants were in the areas of the land policy, customs, real estate and banking services.
Diaspora are also concerned about the lack of enforcement by the MoFA directorate dealing with the Diaspora engagement and participation, when investors complain about difficulties related to their investment, especially outside the city.
MoFA recently announced that it had no intention of forming a ministry to exclusively deal with Ethiopia’s estimated two million strong Diaspora population.
Hailemariam, while acknowledging the difficulties mentioned by the participants, said the problems could only be solved when worked on together. He noted that local officials from regional states Diaspora offices have also come to the meeting to hear their grievances and find ways to solve them.
While he acknowledged that problems might arise related to difficulties in customs due to capacity and outlook problems, he assured them in addition to reviews of customs performance, a new procedure is being worked on to solve their troubles.
He however was adamant that the issue of tax free imports of cars for the Diaspora was a closed matter and had been abused when it was briefly put into force for investment purposes a couple of years ago, as well as being unfair to residents of Ethiopia investing and working here.
Hailemariam further said the government has designated seven areas as “pillars of growth” for the country in which he said the Ethiopian Diaspora can participate. He pointed Energy, Industry and Communications as preeminent ones.
“We’ve been able to fulfill our capacity in the cement industry for local demands with the current 30 cement projects thus allowing us to export to Djibouti, South Sudan and Uganda,” he told the gathering.
The government has also started construction of 11 mega sugar projects each on average holding 25,000 hectares. It however sees Metal and Iron industries as the foremost key ingredient to unlock the country’s potential, especially in the Industry sector with 11 large ongoing projects in this field.
Hailemariam said the presence of the Metal and Iron industry is one of its guarantees for the completion of the railway project it is currently constructing.
The Ethiopian Government expects to produce locally manufactured locomotive trailers as well as gradually replace foreign experts with national ones, and for such reason is training Ethiopian professionals in Russia.
Currently two train projects the 656Km Addis Ababa-Me’eso- Dire Dawa- Djibouti line and the 37.381Km Addis Ababa light rail transit project are progressing with the former estimated to need three and a half years and the latter two and a half years to complete.
The Ethiopian government plans to construct more than 2,000Km of rail lines during the five year GTP plan.
“Our growth aim is to boost the competitive advantage of Ethiopia in which it has comparable advantage as well as make the import substitution strategy feasible with the help of Ethiopian Diaspora members,” Hailemariam concluded.