Investment Commission calls on insurers to compensate damaged businesses

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Fistum Arega, EIC Commissioner

The Ethiopia Investment Commission (EIC) is criticizing insurance companies for failing to compensate companies whose properties were damaged last month during protests in Oromia and Amhara regions. “Some insurance firms have broken their promises which is unfair,” Fistum Arega EIC Commissioner said during a press conference on November 11.

He went on to say that the only reason for denying coverage is if the business was not covered in the first place, otherwise contracts must be adhered to.

EIC is asking the National Bank of Ethiopia (NBE) to revise the insurance policy to help companies which their property is damaged from violence.  “There must be compensation when a company loses something from violence and so insurance companies have to cover businesses from violent acts.”

One expert in the insurance industry said that insurance companies are willing to work with investors, however they just didn’t foresee the current situation. If there is a good premium that can benefit insurance companies and investors then this kind of coverage can be successful.

EIC also announced that it is ready to pay horticulture exporters who lost properties during the riots last month. The Commission also disclosed that the government will support investments that were damaged during the recent violence via a year-long tax relief and other schemes. In addition to the financial assistance  the commission is offering a one year tax holiday, tax free imports to replace damaged products and lowering to 30 percent the amount of capital needed  for foreign investors to secure loans.

Fitsum said that about 47 investment projects are damaged during the recent violence in Amhara and Oromia regions.

About 44 of them have commenced operation with full capacity at present. Almost all the flower and fruit producing and other industries have started operation after a few weeks of interruption due to the damage.

In the first quarter of this fiscal year the county get half billion dollar form direct investment which is the equal compared to the same period last year.