One of the major hard currency earning sectors, the horticulture sector, gets a setback after occurrence of a power outage in the horticultural hub that stretches from Bishoftu to Qoqa.
Sources within the sector informed Capital that the main line that feeds power to the horticulture industries in the area was interrupted as from end of last week, “This has presented a myriad of challenges to our farms.”
The Ethiopian Horticulture Producer and Exporters Association (EHPEA) also confirmed the problem which its members are facing in the area.
Yemisrach Berhanu, Promotion and Information Service Head at EHPEA, said that the power interruption occurred for about six days until Thursday June 30.
“Because of the blackout, 30 farms have been affected. On the other end, the Ethiopian Electric Utility (EEU), which is responsible for distributing power, has informed us that the power outage transpired because of a particular theft that happened on a transmission line, but we were unable to know when it would be resolved,” she told Capital.
According to Yemisrach, operations like managing the green house activity, irrigation or feeding plants and operating the cooling houses have been affected at the farms.
She said that farms attempted to manage the problem by sourcing power from generators; however the shortage of diesel has added salt to injury, in addition to the continuous blackout.
The horticulture investment that manages over 200, 000 laborers, mostly women, with very limited plots of land is highly concentrated on the Qoqa area and on the highway to Batu town, south of Qoqa, which is 91 km south east of Addis Ababa. The export of products from the area also dominates the sector earnings.
The information that Capital secured from the electric provider indicated that the power line that came from Qoqa Station, one of the oldest energy dam, was damaged because of theft.
However, the Ethiopian Electric Power (EEP), which is responsible for administering generation, high tension lines including national grids and bulk power sales, said that the transmission line around Mojo area had been damaged two weeks ago.
“Nevertheless, we have managed the problem within two days and now the line is operating properly,” Moges Mekonnen, Public relation head of EEP, told Capital.
He said that the problem that rose from horticulture farms is not related with EEP.
“Concerning the power supply, the problem which transpired a fort night ago was solved immediately. I have also learnt that the power supply has been interrupted for the farms but since they are not our clients, and adding to the fact that after the two day blackout with the power being put back on, I do not see the areas where we could come in to assist,” he elaborated.
However information from EEU, which has direct relations with farms, disclosed the power cut is related with a transmission line cut that is managed by EEP.
“Because of the situation, now the plantation and other activities at the farms are affected,” she added by requesting swift solution from the relevant government offices.
The horticulture industry has contributed over half a billion dollars in the first ten months of the 2021/22 budget year, making the sector the third major hard currency source after coffee and gold.
The hard currency generation from the sector is growing every year despite different challenges including the recent effect related with COVID 19.
Blackout rocks operation of 30 farms
Manmade fuel shortage disorients market
If the current shortage of petroleum is not resolved in the remaining few days, the Ministry of Trade and Regional Integration has stated that the market will be in disarray when the subsidies are applied starting from July 8, 2022.
In the past few days severe fuel shortage has pricked the country, including that of the Capital, Addis Ababa. However, the Ministry argues that the case is manmade.
“There is shortage of supply whilst demand is increasing,” said Tadesse Tilahun, CEO of the National Oil Company and President of Ethiopian Oil Companies Association adding that, “since there is shortage of supply we cannot provide petroleum in our stations which can cover the demand.”
“It is a manmade problem created by stations and sellers,” said Kumneger Ewnetu, Public Relation Director at the Ministry of Trade and Regional Integration, adding, “the government is importing fuel properly with no stated decrease on the amount, however, the main problem comes after it is shipped from Djibouti with trucks, which results it not to arrive to its allocated destination.”
“There is also lack of proper follow up of owners on trucks carrying petroleum,” explained Kumneger. The PR director also elaborated that the Ministry has also discussed the situation with the gas station owners and gave them warnings stating that if they don’t provide the service accordingly they stand a chance of facing high penalties including cancelation of licenses.
Hundreds of trucks carrying petroleum have been found in different parts of the country and some have been going to Sudan and Tigray whilst some are hording petroleum until the price adjustments are made.
“If all the stakeholders and the public work together we can have improvements and can minimize these effects,” Kumneger opined.
Apart from waiting on the price adjustments, petroleum has also been sold in the black market; to which around 400 million dollars’ worth of petroleum has been illegally smuggled from Ethiopia in 2020/21 according to reports. The contrasting prices with markets in neighboring countries have offered a lucrative prospect for profit through cross-border contraband trade, causing irregularities and disruptions in domestic fuel distribution.
Ethiopia’s annual oil consumption has reached 3.8 million metric tons of which 65 percent of this is gasoline. Ethiopia allocates an almost similar proportion of foreign currency income secured from export earnings to oil imports and removing the government subsidy from oil products are viewed as the sustainable solution.
Removing subsidies will be applied with different mechanisms where it will be removed within one to five years based on assessments and as Kumneger indicates, the government is working closely with different stakeholders on the issue.
Compared to the previous year, the annual petroleum import bill of the Government has increased by close to 19 percent during the last budget year 2020/21 reaching an all-time high of 72.60 billion birr. In the previous budget year (2019/20) ended July 7, 2020; Ethiopia spent a total of 62.05 billion birr to purchase close to 3.87 billion metric tons of petroleum.
With regards to pointing out the thorn in this space, oil company executives, transport companies, and gas stations are said to be part of the problem as opposed to the solution.
EEG back peddling in innovation, audit findings show
The Office of Federal Auditor General (OFAG) says that the Ethiopian Engineering Group (EEG), which is the major portion of the infamous former Metal and Engineering Corporation (MetEC) is continuing on its traditional stride with regards to assembly and sales of agricultural equipment.
OFAG which appeared in parliament a week ago for its 2020/21 budget year report through its findings showed that EEG did not have a developed quality standards or grade to date.
It added that as the previous trend, the group is continuing partly in assembling and selling bulk agricultural equipment which is imported without quality measurements and standards.
OFAG has also shown through its finding the mishaps that MetEC conducted years back.
According to the audit report that was presented by Meseret Damte, Auditor General of OFAG, the then corporation had procured 14,452 different horse power tractors from 2010/11 to 2014/15 at the cost of USD 146.1 million and 10.5 million euros. OFAG said that the purchase did not follow the proper procurement procedures, without market demand and procurement assessments, and without evaluation of whether the agricultural products were suitable for farming in Ethiopia or not.
“Up until last February, 5,825 tractors that were not able to provide service were still stored,” OFAG’s head said on her performance audit findings.
The Auditor General office said that despite EEG’s Adama Agricultural Machinery Industry which was established at the Nazareth Tractor Assembly Plant in 1984, its operation were not engaged in innovation activities and did not place it in the track of improving the sector activity or managing collaboration works with others who have experience on the area.
It added that it is still stuck on the operations of assembling imported tractors rather than producing its own products.
Over two billion birr is also not yet collected from tractor sales, in addition to the firm not settling almost two billion birr of debt that it ought to pay.
The Auditor General said that the industries which have irrigation project contracts of 1.2 billion birr for Afar, Oromia and Somali regions were accomplished as per the schedule.
OFAG which delivered a very vast and in detail financial and regularity audit findings said that on its performance audit it was able to conduct 29 audits, which is over 96 percent of the plan. On the finding it has disclosed significant gaps that were observed on the audited public institutions or enterprises like such that of the EEG.
One of the democratic institutions said that public offices mannerism in the correction of gaps that were recommended from the previous findings has improved in comparison with the preceding experience.
Huawei Ethiopia holds partners’ summit
Chinese technology company, Huawei Ethiopia, held its partner summit on Monday June 27, 2022 at the Hilton Hotel Addis Ababa.
The company has thrown the technology promotion and recognition program with its partners in Ethiopia with the attendance of Huria Ali, State Minister of Innovation, Cowin Cao, Deputy CEO of Huawei Ethiopia presenting Huawei Ethiopia’s Enterprise Business, Huawei Technology Group senior executives, the company’s domestic partners and different pertinent stakeholders.
“Huawei is contributing to the realization of the Ethiopian Digital Strategy 2025 by bringing the best technology in the world to our country,” said Huria Ali whilst opening of the forum.
Whilst indicating that the company has recently launched a 5G network with Ethio Telecom, the State Minister highlighted that government is supporting efforts to build a digital economy by building more infrastructures, creating jobs and importing smart technologies. “We are working with both local and international institutions to build a digital Ethiopia,” she said.
Cowin Cao, Deputy CEO of Huawei Ethiopia on his part expressed that Huawei Technology is working with 158 domestic partners in Ethiopia, which has led to job opportunities for 3,700 residents.
The program, developed by Huawei Technology Group, recognizes various companies and organizations that work in partnership with the company.
