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New dawn of Ethio-Japan Ties

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Japan’s diplomatic relations with Ethiopia date way back to 1930, when both nations signed a Treaty of Amity and Commerce. This relation was further solidified with the establishment of embassies in both country’s capital by 1958.

For close to a century now, the Ethio-Japanese ties have been growing from strength to strength across different sectors. And as noted in the recent ceremony which was held at the Imperial Palace, when newly appointed Ethiopian Ambassador to Japan, Daba Debele presented his Letter of Credence to the Emperor of Japan, Emperor Naruhito, the nation’s leader reaffirmed the commitment of the Japanese Government to take Japan-Ethiopia relations to a new height.

Here in Ethiopia, equal sentiments of stronger and better relations were reflected by the Japanese ambassador to Ethiopia, Ito Takako; who for the last three years has facilitated numerous milestones in the countries’ ties. Capital’s Groum Abate got a hold of Ambassador Ito as she prepares to make way for a new incumbent.

In this candid interview, Ambassador Ito, who is a seasoned diplomat shares her insights on Ethio-Japan new dawn of relations, best practices of channeling foreign direct investment, the impact of peace on development, amongst other insights. Excerpts;

Capital: What in your opinion would you say has been your most significant achievement, or contribution in your line of diplomatic service?   

Amb. Ito Takako: First and foremost, I would like to appreciate the fact that in my line of work, most if not all achievements are made through collaborative efforts. Furthermore, the team at the diplomatic mission here has also played a great role in nurturing the solid bilateral relations that you see today. Moreover, my predecessors have also laid great grounds for some of the diplomatic success between Japan and Ethiopia.

In the time that I have been here, I have worked to strengthen our relations through enhancing the development of human capacity through the implementation of Kazien management techniques across the country. On a broader spectrum, we have further doubled down on our development commitment through the Tokyo International Conference for African Development (TICAD) where African countries and their development partners discuss strategies for steps toward greater African prosperity. This is a great step in improving the country’s economy.

The other achievement that I am proud of is our commitment together with the UNDP, in the provision of financial support for the Ethiopian National Dialogue Commission (ENDC). Initially, there were some countries who were not quite sure whether or not the ENDC would work or not. But after contacting the members and the UNDP, I had a belief that this was an important institution that we ought to support. So Japan was the first country to make financial contributions, with 3 million USD support. And afterwards, there were many other countries who rendered their support to the same. 

Another achievement that I would say was induvial on my end was my involvement in the recent International Day for Women in Diplomacy. This year was the inaugural year for the event, and I’m glad to have been part of the team of colleagues and female ambassadors posted in Ethiopia.

Capital: Could you share some of the key milestones or highlights in the Japan-Ethiopia bilateral relations? 

Amb. Ito Takako: We are all familiar with the liberalization of the telecommunications industry of which Japan through Sumitomo has played a part courtesy of a 25 percent share in Safaricom Ethiopia.

Even before my uptake of assignment to Ethiopia, I was briefed on the paramount importance of giving Sumitomo and Safaricom, fair treatment with regards to the procurement procedure and participation in the liberalization of the telecom industry. So whenever I met the government officials, I requested for fair treatment to be given to our investors who want to take part in the telecommunication sector through foreign direct investment (FDI). This has transpired fairly well but of course there are some issues that need to be ironed out, and I think it is a good image for Ethiopia with regards to FDI being handled in a fair and equal manner. This in turn invites more FDI to Ethiopia, and will create a better image for the country to attract outside investment.

Secondly, we were able to collaboratively work on the support of Ethiopia’s general election in 2021. Japan, through the UNDP, contributed ballot boxes across the country, which are of international standard. We also look forward to play a pivotal role in Ethiopia’s democracy in the future elections by providing such services.

Thirdly, Japan supported the first peacekeeping Operation Master course at Ethiopia’s IPSTI (International Peace Support Training Institute) in Addis Ababa. This is the only one in Africa and is an integral anchor for those people who in future will go on to be peacekeeping leaders. So Japan was successful to support this program and this year we had the first batch graduate and the second batch is also working to graduate next year. It is not just the European peacekeepers or the civilians, but also since this is their diplomatic capital of Africa, there are many other countries who are sending their future leaders to learn about peacekeeping in the same course, such as South Sudan, Malawi, etc.,

The other milestone achieved is that last August, Japanese Foreign Affairs Minister, Yoshimasa Hayashi, visited Ethiopia and had a meeting with the Ethiopian Foreign Minister as well as the Prime Minister. So this is the first time in four years that Japan had a ministerial talk with Ethiopia. So we hope that this kind of high-level political talk will continue.

Capital: Safaricom has complained that the playing field is not fair in contrast to Ethio telecom. What do you think should be done to level the playing field?

Amb. Ito Takako: Well, that’s another issue. But whenever we have an opening for fair and equal treatment, we advocate for Safaricom or M-Pesa to be given the same access. Because that is the whole purpose of introducing competition and free market. This down the road is also important in sending a message to other foreign investors, and shows that you can come here and have a fair and equal position whist also competing. So all that can be done really is to continue to emphasize on fair and equal treatment.

Capital: On similar lines, nobody has shown interest to buy the license to be a third entrant to the telecommunications industry as auctioned by the Ethiopian Communications Authority. Why do you think that is? Do you feel it’s because of the uneven playing field or unfair treatment of Safaricom?

Amb. Ito Takako: I can’t really say much about this because I do not have the full information on the process of getting the third license.

However, leveling the telecommunications playing field will for sure play an instrumental role in attracting future prospect investors.

Capital: What would you think is the biggest challenge to the diplomatic and cooperation ties between Ethiopia and Japan? 

Amb. Ito Takako: The biggest challenge we are facing now is on the maintenance of peace in this country. Of course, you had the Cessation of Hostilities Agreement a year ago, but still we have a state of emergency in Amhara and we don’t know the state of negotiation between OLA and the government. Peace is important. For us Japanese, we experienced the importance of peace after the war in 1945. Peace has been of utter importance in all our works to date. As you well know, when there is peace you can have development, because you can have trade, as well as a culture of hope with lots of exchanges in between. So how to maintain this peace is a big challenge and I was encouraged by the Prime Minister when he spoke to the Parliament this week about the sustainable peace initiatives and I think that this is a very important aspect of the challenge.

Capital: Has the instability of the country affected companies coming from Japan? 

Amb. Ito Takako: Of course, if there is war, there are certain situations that will impede Japanese companies from coming here. There are many other countries around Ethiopia which are more stable, and freer. And when they compare they will be swayed to go to those countries. Ethiopia has a huge potential, a large market and a lot of resources. But if there is a danger of war, a danger of a military conflict, they will not come and risk their lives. So I think it is important to show that Ethiopia is committed to peace. 

Capital: Before the war, there was a certain Japanese company which was involved in the textile sector. Following the break out of the war, the connection or ties were cut off. Do you have any progress on the same?

Amb. Ito Takako: The investor in this particular case was not a Japanese company but an Ethiopian company which conducted textile trade with a Japanese company in Mekele. During the conflict, operations were ceased.

I recently visited that factory, about a month ago. I’m very happy to see that from the organic cotton they make, they are able to make yarns and also fabrics of which they also dye. And now the last stretch is to make the products, the t-shirts or the uniforms. 

Those things can be done. But in order to do that, they needed a peaceful situation where people could come back to work and they do the work at the factory. They don’t have to worry about other dangers, as a security situation, and the Japanese company will be happy to make a deal and purchase once it is safe to have the business with those companies. So again, safety and peace stability is key here.

Capital: Are there any specific incidents where a Japanese company backed out from investing in Ethiopia? 

Amb. Ito Takako: As I have underlined, instability and the nation-wide state of emergency bring with it unsure times. And again, Amhara, it’s an entire region under the state of emergency. You never know what’s going to happen. We don’t want to risk the lives of our people, and then especially when there are many other places which is safer. You have to think that Japanese companies are looking at the entire continent, entire world, where they put the money. So they will try to choose the best destination. And your competition is not just Kenya or Djibouti, but the entire continent, and entire world.

Capital: Throughout your time as ambassador, what initiatives or projects have you been involved in to promote cultural exchange of people to people in various conditions, including Japan?

Amb. Ito Takako: I participated in the Great Ethiopia Run because I was an ambassador representing the host country of the Olympic Games. That was a firsthand initiative I experienced. It was fun. And also this month we resumed for the first time in 10 years, the Japan Film Festival. So we showed five Japanese films in Addis Ababa and we hope to continue that. And also last Saturday, we had a Japan Day Festival to introduce Japanese culture to S.Y.P.M. people that includes the judo demonstration, tea ceremonies, Japanese games and music, traditional Japanese folk dances. 

Capital:  What are your reflections on the current economic development cooperation between Japan and Ethiopia? 

Amb. Ito Takako: I think there is a lot of potentiality. Ethiopia, as I mentioned earlier, has a huge population, domestic market, room to grow, and a lot of resources. And in fact, the interest of Japanese companies to come to Ethiopia has been growing. Not just Sumitomo and Safaricom, but we have other investors. For instance, Toppan Printing Company has recently established a joint venture together with the Ethiopian Investment Holdings. So they are planning to have a printing of Ethiopian passport here in Ethiopia. 

We also have a Japanese pharmaceutical and food production giant called Otsuka Holdings which has decided to come to Ethiopia. They have chosen Ethiopia amongst other African countries because they have seen the potential of growth here in Ethiopia. But at the same time, we have to point out the difficulties of convincing many other Japanese investors to come. The lack of foreign currency, the double, parallel markets, and also the unclear taxation or the custom exercises. The contracts signed were not really respected by the parties. Those are really discouraging and those actual Japanese investors who faced these challenges and withdrew from this country, they were telling their bad experiences, which is not a good idea for inviting more investors here.

But I see even for agriculture, we can have potentially good rice production together with Japanese experience and techniques and health. We have a lot of people who want to come here and work with the Ethiopians and share their expertise on this front. 

Capital: At what stage is the passport printing process at?  

Amb. Ito Takako:  I know they have already signed the agreement to establish the joint venture. So right now I understand the Ethiopian passport has to be printed in France, but now with the top plan, they can start printing here. I don’t know exactly when they will start printing, but I think maybe they are in the process of preparation.

Capital: What role do you see Japan playing in support of Ethiopia’s ongoing efforts in areas such as infrastructure, development, health and education? 

Amb. Ito Takako: For infrastructure, we had a few projects already. For instance, we helped the water supply project in Bahirdar, which was completed this year on July, which allowed 150,000 people in Bahirdar to have access to water. And also here in Addis Ababa, we donated new equipment for the road maintenance so that they could have wider roads. I think these are very helpful for improving the road infrastructure. With regards to the health sector, we provided a few ambulances, even this week, we provided one ambulance through UNFPA to Amhara, in addition to medical equipment.

For the education sector, as I mentioned, we are working, especially through JICA is sending advisors for the curriculums for the science and math’s programs in the country. We’ve have been adding extra buildings for the schools through various projects as well. This week, I was in Awash inaugurating two school buildings with eight classrooms, inclusive of washroom facilities so that children don’t trek long distances to and from school to have access to such facilities. We also provided those school buildings or vocational training center with libraries that are good to go for at least three years.

Capital: As you prepare to depart, what advice or suggestions would you offer to your successor?

Amb. Ito Takako: In Japan, there aren’t so many Diasporas, not like in other European and North American countries. So we don’t have any prejudice or we don’t have any information regarding Ethiopia. So my advice to my successor is to see by their own eyes and to understand what Ethiopia is and who the Ethiopian people are. This I believe will give a good insight.  The country is huge and diverse and ought to be experienced. My advice to the incumbent is that Ethiopia is more than what is reported on international media.

Capital: How would you summarize your overall experience as a Japanese in Ethiopia? What message would you like to convey to the people of Ethiopia?

Amb. Ito Takako: Three years have flown by so fast. I may have not been successful at everything but the very interesting experiences that I have found here will stay with me for the rest of my life.  For instance, I have noted we have the same values in that the Ethiopian people are diligent and modest, humble, and that is same for Japanese as well.

My message to the Ethiopian people is that you have a friend in the Asian-Pacific which shares a similar history, and similar values. And Japan always stands by Ethiopia. We are friends and just count on us and tell us what you need. We look forward to always strengthen our diplomatic bond. 

Capital:  Do you have anything to add?

Ito Takako: I sincerely wish that Ethiopia will succeed to overcome various challenges, including sustaining peace and undertaking economic reforms.  These may cause some pains, but not working on these issues would cause even more pain and be much costlier in the long run.  I believe in the courage and perseverance of the Ethiopian people.

Ethiopia hosts 5th Takaful, Re-Takaful, Interest-Free Banking Forum

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By our staff reporter

The nation’s capital successfully hosts the 5th Edition of Global Takaful and Re-takaful forum in partnership with AlHuda CIBE, and Ethiopian Reinsurance; Muhammad Zubair.

This forum was reflective of the growth of Ethiopia’s interest-free financial industry where 5 takaful windows are operating with 18 banks offering interest-free banking products.

As cited in the forum, the country aims to increase cooperation and increase Takaful, Re-takaful and interest-free banking activities.

At the forum, Solomon Desta, Deputy Governor, Supervision of Financial Institutions, National Bank of Ethiopia, expressed his desire to invite foreign direct institutional investment to Ethiopia.

There are more than 400 Takaful companies and more than 35 Re-takaful companies operating worldwide. Global Insurance reflects the growth of Ethiopia’s interest-free financial industry, with 5 takaful windows operating in Ethiopia with18 plus banks offering a line of interest-free banking products.

By definition, takaful insurance is a cooperative insurance where interested parties agree to share risks. The word ‘Takaful’ is an Arabic word derived from the root word ‘Takaful’ which means mutual guarantee, sharing or partnership.

Mohammed Zubair Mughal, CEO of Alhuda Islamic Banking and Economics of the United Arab Emirates, at the event also applauded the support of Ethiopia’s financial industry. He pointed out the role of Ethiopian industry in the financial market of East Africa and the progress achieved by the local industry in last ten years, citing,

“Alhuda CIBE has been committed to the African market through consultancy services and capacity building programs for 15 years.”

The agenda of the forum which was held on the 24th and 25th of November 2023 was based on current takaful industry, takaful portfolio, product line, product innovation, marketing strategies, risk management, operational services, Shariah legality, future prospects of the industry, re-takaful and interest free banking. A post-event workshop on Operational Issues of Takaful, re-takaful and Interest-Free Banking was also held.

Premier Switch Solutions enhances grip on the market

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By our staff reporter

Digital financial solutions provider, Premier Switch Solutions (PSS), reveals that cash withdrawals of 101.1 billion birr have been made since operations was established.  The end to end solutions provider also highlighted that in the past fiscal year a growth of 60 percent was made with 30.2 million ATM transactions.

According to PSS’ recent report, the company’s paid-up capital has increased to 15,599,000 Birr, with the total paid-up capital reaching 165,001,000 Birr.

As Hailu Alemu, Chairperson, Board of Directors at PSS, cited, his firm was able to generate a total revenue of 268.9million birr, with profit after tax coming in at 41.4 million birr.

In the report, the number of remote-on-us transactions carried out at ATMs of non-PSS banks by holding PSS identification cards was more than 8 million, with total figure 9.1 billion birr.

The total sale of cardless transactions through mobile phones showed a growth of 71.4 percent compared to the previous fiscal year while 26,000 withdrawals worth 27.8 million birr were made in the reporting year.

According to the report of the Board of Directors, in the last fiscal year, 201,497 purchase transactions worth 376.7 million birr were made by 160,989 member banks and 40,508 international payment cards using POS machines. This is said to be a 115% increase compared to the previous reported year.

The total number of payment cards distributed by PSS since its establishment has reached 5.7 million. Compared to the previous year, this year’s performance was 8% lower due to the change in the banks’ operational direction.

Oromia bank celebrates 10 years of IFB services

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Oromia Bank, the first private bank to introduce interest-free banking (IFB) services in Ethiopia, celebrates its 10 year of service.  

In 2013, the bank rolled out its first IFB services and as Teferi Mekonnen, president of the bank depicts, “This initiative has opened the door for many Ethiopians who want banking services that are compatible with their religious beliefs and morals.”

As the president pointed out, 43 branches are completely providing IFB while the other 525 branches are providing other banking services in conjunction with IFB.

Over the past decade, the bank has expanded financial services to Ethiopians who follow Sharia principles by reaching more than 1.2 million customers across the country with 5.1 billion birr provided in loan services with 8.2 billion birr in savings.

As reports have shown, the bank has facilitated the coming up of various business through provision of funds which come with no burden of interest.