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Costs of living

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Costs of living

Considering the inflation over the past few years, the ever-rising costs of living and the salaries that people earn, I imagine that money is the cause of a great deal of stress for breadwinners, who worry about how to make ends meet by the end of next month. What can we do? It is sometimes said that we are busy buying things we don’t want with money we don’t have to impress people we don’t like. Money touches every aspect of life and when people don’t handle their finances well it causes huge problems. Consider the following three truths about money:

  1. Money will not make you happy. Even though most people would agree that money won’t buy happiness, they sometimes act as if they think it is true. Why else would they make money such a high priority or compromise their values to get it? Divorce rates and depression are even higher amongst those who are better paid and can afford all sorts of luxuries. The Roman philosopher Seneca said nearly two thousand years ago: “Money has yet to make anyone rich.” And the carmaker Henry Ford concluded that ”Money doesn’t change men, it merely unmasks them. If a man is naturally selfish or arrogant or greedy, the money brings it out, that’s all.” You are what you are, no matter how much or little money you have.
  2. Debt will make you unhappy. Having money may not make people happy but owing money is sure to make them miserable. Novelist Samuel Butler, who satirized Victorian life in England, wrote: “All progress is based upon a universal innate desire on the part of every living organism to live beyond its income.” Yet, the truth is that if your outgo exceeds your income, then your upkeep will be your downfall.
  3. Having a financial margin gives you options. The bottom line is that money is nothing but a tool. It is good for helping us to achieve goals, but the goal of getting money for its own sake is ultimately hollow. If you have little money, you have fewer options and you may not be able to live near the school of your kids, drive the car you want, build your dream house, etc. It is therefore important to know what your financial margins are and to decide on the priorities you can afford within them.

        So, what can we do practically to earn and manage our finances daily? Here are some suggestions:

  1. Make up your mind. It takes a personal decision to begin managing your finances properly. This applies for the family budget as well as for business. It is planning and budgeting that is required here. And it helps to begin with setting aside money for savings or investments first. Monthly that is, when the pay cheque arrives. This will leave you with the rest to spend on the living or running expenses. Turning this principle around will never result in an accumulation of reserves and will leave you at the mercy of the money lender when you suddenly need it. It sounds so simple but in reality, it is not. More often, money is first spent on unnecessary items and luxuries, just to leave us short of money when the bills arrive.
  2. Put the value of things into perspective. People tend to value money and things over what is really important in life and that is: other people. And in a culture where relationships are so important as is the case in Ethiopia, this may bring about serious family and social problems. To put your personal attitude about money in perspective ask yourself the following questions:
    • Am I preoccupied with this?
    • Am I envious of others?
    • Do I find my personal value in possessions?
    • Do I believe that money will make me happy?
    • Do I continually want more?
  3. Reduce your debt. Going into debt for things that appreciate in value can be a good idea, like buying a house or investing in your business, but only as long as you can manage them well. Getting into debt for unnecessary luxuries will lead to problems though. Sometimes people continue repaying their loan for things they no longer use or need.
  4. Begin planning your finances now. Someone once observed that the difference between the rich and the poor is that the rich invest their money and spend what is left, while the poor spend their money and invest what is left. The point is that if you don’t plan on finances, you will sooner or later be in trouble and this is so for your personal life as well as for corporate life.

And so in the end it is all about values, setting priorities and planning your personal, family or corporate life. Remember: “Failing to plan is like planning to fail”.

Source: “Today Matters” by John C. Maxwell  

Ton Haverkort

We are intimidated, Governor

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We are intimidated, Governor

By Samuel Estefanous

Someone shared me a story presumably making ‘the rounds on one of the vitriol social media’. It is written in Amharic and the author lamentably inquires- ምነዉ ሰዉ ድምጹ ስልል አለ…ወራጅ  ማለት አቃተዉሳ…he goes on bragging that he had single handedly helped a few commuters disembark minibuses at their respective destinations simply by speaking reasonably louder on their behalves to the conductors.  

Looks like the unfortunate fellow commuters are so overwhelmed by the unrequited cruel demands of life that they have involuntarily condemned themselves to become voices unworthy to be heard anytime, anywhere-not even to say ‘ወራጅ’ to a taxi conductor in an  audible voice.   

No kidding, the hike in prices of consumer produce is alone enough to commit half the otherwise proud heads of families to bedlam. You see it is an affront to their pride to fail to provide for their families, besides, the humiliation and the sense of having no one to turn to has reduced folks to silent lambs.     

I know I might be accused of singing the old Fabian lullaby to make a hero out of a confirmed loser. I don’t even care, as one closely studying legal trends in contemporary labor issues, I kinda easily relate to the old Fabian distinctive advocacy for minimum wage and social justice.

 Thus, naturally the story of Addis residents whose voice chords are involuntarily weakened reminded me of Alfred Doolittle, not Professor Higgins (characters from Shaw’s Pygmalion). I am not saying that Doolittle is a quiet person; on the contrary he is noisy but he speaks for the overwhelming majority of impoverished city dwellers when he screams for no particular reason-we are intimidated, Governor!

1-The Scary Deafening Silence

When Habesha truly protests he tends to say little. The old monarchs were known to dread this silence of the lambs- nothing satirical intended here- so much so that they used to instigate moderate ‘vocal’ protest to letup the bad blood. They would inquire of their court chamberlains and couriers-

-What are the shepherd boys singing about these days? Their flutes have gone mute; thank God, they have quit making fun of us.

-What about those teasing wenches and the mean old hags crowding the village streams? We are spared of their biting parody and crude jokes, your royal highness.

At the news of this unusual silence the Monarch would murmur- God have mercy on us, what have we done, Gentlemen!?

2-The National Dialogue Commission-on a mission to iron out fundamental difference?

The government’s effort to involve the multitude in a nationwide dialogue by founding a Commission to undertake the responsibility is laudable. (I hate being cynical but in all honesty who would talk his heart out to a Commission with a designated army of officers taking notes?  )

This forum would enable the marginalized multitude to voice its grievances but the problem is over the years consecutive systems have favored a selected few elites at the expense of the marginalizing overwhelming majority of the public. In such instances the Commission would be unable to accommodate the flood of agendas which would either be beyond its mandate or capability to entertain. 

No wonder the Commission has resorted to running ads on City Buses-Ethiopia is Engaged in Dialogue reads one such ads. I have the utmost respect to the distinguished members of the Commission but to this day I am unable to process exactly what the Commission intends to achieve.

It has launched a partly interactive well designed and well administered website. Apparently any interested party can set an agenda to the Commission if he wants to; and it makes one wonder what those commuters with weak voices would submit by way of an agenda.

The preamble of the proclamation founding the Commission reads like a tract of a Protestant Ministry. It is invested with the impossible task of bridging differences on fundamental issues among others. I mean it is on account of differences that we have a Constitution, organs of governments and an electoral system. We need our fundamental differences, thank you very much.

Okay you want an agenda? Take two from me

1-Disband the team working on the transitional justice in Ethiopia as it is trying to scratch healing old wounds going as far back as 1995 and undermining organs of justice administration in the country. The way I see it, transitional justice presupposes rampant and unprecedented abuse of fundamental individual and group rights beyond the capacity of the justice administration system-unless we have reached a common understanding and consensus that such is the case.

2-Ensure accommodation before beautification. Unlike the usual detractors of the government, I would be lying if I say I am not impressed by the mega beautification projects undertaken by the incumbent but all the time I was saying to myself-if only this dedication and exemplary project management capacity were employed to guarantee one of the fundamental human rights to have shelter in line with article 25 of the Universal Declaration of Human Rights.  

3-When the Filthy Rich and the Destitute Share Ground

The concept of the filthy rich- ብስብስ ባለሃብት- came in to common usage in the post-Soviet Russia and the CIS countries when a vicious band of unscrupulous hooligans blatantly usurped the Sovereign wealth of the countries. The cumulative effect had impoverished the people to such extent that by major indexes of development metrics Russia had joined the ranks of some Sub-Saharan countries until its savior Vlad the Great did a major spring cleaning.

The common dictionary defines wealth as filthy when it becomes offensive, vulgar and disgusting. Instead of being a distinguishing meritorious mark of hard work and perseverance it becomes a scarlet letter of dishonor. Under normal circumstances wealth is the epitome of excellence and distinction- the kind of wealth Haile G. S. is making, the kind of wealth startup small business owners are trying to accumulate over years etc.   

Unlike Russia, we don’t have abundant fossil oil and mineral resources to breed the infamous oligarchs but the one precious resource we have is land and it has always been at the bottom of a wide range of speculative unearned wealth. 

Recent studies reveal that land lease in Addis has reached close to 200 fold of the threshold price reaching birr 414,863 per square meter. This trend is being replicated in major Regional towns as recently witnessed at Mekelle urbane land market.

This is an alarming development and unerring symptom of a dysfunctional economy. Instead of stopping everything it does in this regard and fix the broken link, the government is delightfully rubbing its hands together and bagging the money like a greedy middle age pawnbroker. 

In the first place the reason the Constitution de-commercialized land is to make it available to the public without commercial value, not to enable the government to trade in urbane land and create a band of fifthly riches speculating in land in the process.  

The ultimate consequence of this sick affair has reduced the urban residents to migrant squatters with zero attachment to the land of their birth and origin- remember what had happened to farmers in the former special zones of Oromia. No wonder they have lost their voices sharing ground with folks whose concern and problems they hardly relate to.   

I don’t think the Dergue, EPRDF and the incumbent were being stupid when they guarded the public ownership of land so religiously with a puritanical sense of mission. Stay the course, Prosperity if you really know what is good for you.

God Bless.                     

You can reach the writer via estefanoussamuel@yahoo.com

Market consumers and economic transformation

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Market consumers and economic transformation

The newly emerged middle class are trailblazers in their own nations and represent, on a massive scale, agents of global economic transformation.  Their effect on the global economy is already starkly apparent in the seismic shift in global economic gravity over the past few decades.

Due to a myriad of factors, greater trade and investment flows, urbanization, expanding labor forces, rising wages, infrastructure spending, rising life expectancies, political stability, prudent macroeconomic management and, of course, the emerging middle classes of many developing nations, the world has been turned upside down. As recently as 1980, the world economy beat to the tune of the United States in particular and the developed economies in general. The West towered over the Rest.

But, currently the tables have turned. According to the International Monetary Fund, where the developing nations accounted for roughly one-third of world GDP in 1980, this cohort now accounts for over 55% of the global total, with China, the world’s second largest economy, leading the way. By pumping millions of new workers into the global labor force over the past three decades, China and other developing nations have dealt both a supply-side shock (more workers) and demand-side shock (more consumers) to the world economy.

Much of the economic narrative over the past few years has been focused on the former, notably in many developed nations, the United States included, where the common refrain is that the rising supply of workers in the developing nations has undermined the jobs and incomes of workers in the West. To a degree, this is true, although many empirical studies suggest that more United States jobs have been lost to automation and technological advances than to low-cost labor in Mexico or China. The more salient point is that the millions of workers in the emerging markets are also consumers, with more disposable income than their parents or grandparents ever had.

While the spending power of the West has been diminished by the United States-led financial crisis and ensuing austerity in Euro zone area of the European Union, the purchasing power among developing consumers is on a secular upswing. Where in the past factory workers in Asia would trudge off to work on Saturday morning, today they are more likely to head for the local shopping malls for a day of socialising and shopping.

Any first-time visitor to the emerging cities of Shanghai, Dubai, Mumbai, Ho Chi Minh City, Istanbul and Sao Paulo is struck by the vigor and vitality of the local consumer, out in force and shopping in an air-conditioned mall that might be mistaken for a mall in suburban America. The size and scale of these urban buyers and their pent-up demand for electronic goods, appliances, automobiles, skin-care products, clothing and other goods are increasingly setting global trends. Emerging market consumers are leading in global fashion and driving global sales in a number of industries.

Indeed, in a seminal shift, global consumption is tilting toward the developing nations and away from the United States and the West. According to both the recent UNDP and IMF documents, the gap in global personal consumption is narrowing in favor of the developing nations. Where the spread was roughly 80:20 in favor of the developed nations in 1980, the spread has now narrowed to roughly 60:40. And the will have little doubt that in the not-too-distant future, the lines will cross, with the newly emerging middle class poised to take the global baton of consumption from consumers in the West.

And as the emerging market middle classes consume more, world trade flows are being altered. According to the IMF, a shift in world imports is well under way, with the developing nations’ share of world imports reaching a record 56% last year, totalling a record $10.5 trillion. Again, in just a matter of years, the lines are set to cross and imports from the developing nations, led by rising purchases of goods and services from the middle class are set to easily supersede those of the developed nations.

The aftershocks from the rise of the middle class in the developing nations are evident in various guises. Their pent-up demand for electronic goods, appliances, automobiles, skincare products, clothing and other goods has reached the point where emerging market consumers are now dictating the global revenues and profitability of these industries and others.

In addition, as the new global consuming class adopts and acquires Western lifestyles, moves from the village to the city, works in air-conditioned offices, drives to work, consumes more protein, there will be greater demand and higher prices for energy, water, agricultural goods and other natural resources. Put in another way, the monopoly the West has long enjoyed in devouring the world’s natural resources is over.

For much of the post-Cold War era, the equation was rather simple. The developing nations produced commodities and the West consumed them. Those days however, are past. Millions of the new middle class consumers are pressuring the global commodity infrastructure. There is a dramatic shift in underlying demand for global energy, with the developing nations clearly now the global drivers of energy demand and prices.

According to the IMF, the same holds true for the global consumption of meat, fruits and vegetables, with the developing nations, driven by a more affluent emerging market consumer, already out-consuming the developed nations. Pick virtually any commodity and the story is basically the same. Copper, silver, iron ore, meat, corn, wheat, soybeans, the future price of these commodities and others will increasingly reflect the rising per capita incomes and attendant jump in consumption among consumers in the developing nations. In the end, the world has changed. In the years ahead, the global economy will increasingly beat to the tune of millions of other middle-class consumers.

Fight against desertification strengthens community ties and boosts local economy in Niger

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Climate change, irregular rainfall and lack of water has led to successive crop failures in the rural village of Zorian, which lies some 650 km northeast of Niamey the capital of Niger, in the heart of the arid West African Sahel.

With each poor harvest residents say the community loses large numbers of its young population to the city as they search for work. But this year, a project to recover and restore once degraded land unlocked economic opportunities and strengthened community ties while holding back desertification.

Mr Wesouleymane Bilal, 75 years old, is the chief of Zorian village and a farmer and father of seven, including four daughters. He is thrilled to see his village make significant progress after just a few months of work and a small investment financed through the Local Climate Adaptive Living Facility (LoCAL), a mechanism for channeling grants to communes designed by the UN Capital Development Fund (UNCDF).

“This year, the rural exodus has been greatly reduced,” said village chief, Mr Bilal. ”150 people have received remuneration of around 26,000 FCFA [c USD43 ] per month for three months. This has enabled many of them to undertake economic activities such as buying livestock for small goat farms or starting small businesses. Thanks to this, many women were able to meet their families’ needs for food and school fees,” said Mr Bilal.

A community-driven cash for work programme funded via a LoCAL grant, enabled the local government to contract 100 young people and 50 women to work for three months on a 60-hectare land rehabilitation site. The work provided the young people and women with an income before seasonal work began in the fields, guaranteeing economic opportunities for an entire year.

Algéo Bilal, President of the village women’s group, confirms: “The land reclamation work has been of great importance to us, because in addition to the straw that now grows instead of sand, it has enabled us to earn an income that we have used to buy food….Another important aspect is our children, whom we see working alongside us instead of the journey they usually make at this time to other towns where we have no control over their behaviour.”

For the communities living by the plains of Zorian, it is expected that the rehabilitation of the 600,000 m2 of land will enable them to better capture rainwater and restore the area’s vegetation cover, while increasing the population’s cash income. The Mayor of the Commune of Abalak, Mr Antaka Rhousmane, emphasizes that the most important results will be to improve the quality of life for the local population adding that the most important results are not always the most visible.

“The success of this project cannot be denied, You can see for yourself! The extent of the pastures – that’s no mean feat… especially in a place that was as bare as a glacier!” said Mr Rhousmane. 

“But above all, we witnessed a symbiotic climate among these communities, in terms of cohesion and understanding. After a while, some of them even married each other! Can you imagine? These were communities that didn’t know each other before!’,” Mr Rhousmane added.

Indeed, the land rehabilitation work involved young people and women from five other villages in the region: Assarara, Ebagaye, Janjaleti, Tansou wahid and Tigdite.

“With the five other villages that took part in the work, we have created bonds of fraternity. From now on, we invite them to our ceremonies, and they invite us to theirs,” said Ms Bilal, President of the village women’s group.

The Mayor is as proud of the project’s success as he is of its operation: “These are sub-projects that the commune submits to its partners for funding, which are channeled through ANFICT, according to the procedures of the state and its partners.”

With support from UNCDF, Niger’s National Agency for Local Authority Funding (ANFICT) is currently establishing a climate window within the national circuit of financing of local governments, based on the LoCAL standard approach. This should help strengthen local government and community level capacities on climate finance and programme management.

With these enhancements in the national financing systems, LoCAL has already helped to finance over 64 adaptation investments benefiting over 120 000 people in the Dosso, one of the most vulnerable regions of Niger (2019-2022 LoCAL Report). A new funding cycle started in 2023, covering 17 communes in three regions (Dosso, Tahoua et Zinder), including Abalak and the village of Zorian. The investments mostly focus on land restoration initiatives to combat desertification and improving the resilience and livelihoods of communities and capacity building of local governments.

UNCDF, through the LoCAL Facility, provides financial and technical support to the local level, drawing on a global, regional and national network, to channel climate financing to local authorities like Abalak. This gives local authorities more autonomy and duties to tackle the climate change challenge. While supporting Niger in the implementation of its National Adaptation Plan, it is local communities that decide on their priorities. This decision-making at the lowest administrative level is one of the keys to the mechanism: the sustainability of each investment is strengthened by local ownership.

At Zorian, for example, the site is managed by a management committee made up of members from six villages who have worked on the site’s development. Members of the management committee hold rotating monthly meetings in one village. The joint management of the site, now dedicated to harvesting, maintains social cohesion between the villages and builds local level resilience.

“I plead to continue this activity so that young people can have a temporary job enabling them to earn an income,” said Moustapha Moussa, President of the Management Committee in Zorian adding: ”This will significantly reduce migration and rural exodus.’

Distributed by APO Group on behalf of United Nations Capital Development Fund (UNCDF).

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