Ministry of Finance has prepared a new directive for investment incentives and will take over investment board duty.
With the aim of encouraging new private investments, the Government is preparing a new investment incentive draft. Initiated by the Ethiopian Investment Commission, the Ministry of Finance is preparing the draft incentive document.
The purpose of revising the incentive is said to encourage investors in accordance with the new investment proclamation approved in January 2020.
According to Tadesse Kassa /PhD/, legal advisor of the commission, the new draft will have measured shifts on investment incentive, “The first change will be the draft gives the Ministry of Finance power to decide on incentive packages which is the mandate of investment board and also will change amounts of incentives of the different investment sectors.”
As he said, currently using the old incentive directive more than seven governmental offices have the power to decide on the new draft but now only the ministry of finance will have the power to decide.
Including the National Bank, main Department of Immigration and National Affairs, Ministry of Trade and Industry, Ministry of Foreign Affairs, Ethiopian Customs Commission, Ethiopian Investment Commission, Industrial Park Development Corporation, and regional administration currently have the power to decide on incentive package under the Ethiopian investment board chaired by the Prime Minister on the 2012 incentive regulation.
The board has authority to forward recommendation for approval to the council of ministers on incentive related amendments including granting new or additional incentives than what is provided for under existing regulation.
Also as Tadesse said, the change to authorize Ministry of Finance to decide on the package may create confusion since most of the investment related works are done by the investment commission.
Ethiopia offers a comprehensive set of incentives, particularly for priority sectors, such as: Customs duty payment exemption on capital goods and construction materials, Investors have the right to ask a refund of customs duty paid on inputs, Income tax exemption of up to 6 years for manufacturing and agro-processing, and up to 9 years for agricultural investment. Additional 2-4 years income tax exemption for exporting investors located within industrial parks and 10-15 years exemption for industrial park developers;
As part of its promotion of investment in Ethiopia, recently the Ethiopian investment commission has held discussions with ambassadors, government officials, investors from America, Asia, Australia, Africa, and other countries and also with regional investment office representatives on the newly amended investment legislation conducive investment opportunities in the country.
As the commission said, the government is highly working on the growth of investment to increase income generated from export.
By increasing both local and foreign investment the government is planning to enable the country earn nine billion dollar in the coming ten years from export of manufactured products.
As the commission said, besides increasing the investment the government is doing certain due diligence to make the country among the top 50 countries in the world in terms of the ease-of-doing business to boost its quest for industrialization.
In a bid to create a large number of job opportunities, increase the contribution of the manufacturing industry to the GDP and align the development of the industry with the sustainable and green economic development strategy, the government is planning to give a lot of incentives to investors.
Besides the effort to attract new investment, the plan is also aiming to boost the production and productivity capacity of existing firms.
The ministry also identified some of the possible challenges to achieving the plan. Strong competition in the international market in terms of product quality and quantity makes the world competitive.
The commission also invited foreign investors to work in joint-venture with Ethiopian investors particularly in value addition and other investment areas. Improving the quality of exportable products, and focusing on high-tech industries have also been identified as efficient solutions to increasing the competitiveness of the manufacturing industry.
“The new laws aim to increase in-bound investment and address some of the administrative challenges facing investors on the ground.”
In terms of Fiscal incentives the current directive of incentive gives Tax holidays for priority sectors, Duty free import of capital goods, Provision of land with competitive lease prices, Income tax holidays (1 – 9 years), Duty exemption of raw materials used as inputs for export, Investment credit support further accessible and efficient one – stop- shop services at EIC and industrial parks is also consider as benefits for investors.
During the last five months the country has earned 1.1 billion dollar from foreign direct investment as the EIC commissioner Lelise Name said, however as she said certain challenges to the investors has held up the growth such as security challenges, bureaucracy, land and local awareness have been raised as challenges for the investment.
Because of the political instability in the country, as the commissioner said until 2019 more than 400 investments has been burned down and only one percent of them has been reorganized.
Ministry of Finance revises investment incentives
The unique tradition of Ethiopian Christmas under COVID-19
There is no greater feeling than the ‘come together feeling’ of the holiday season. The Ethiopian Christmas itself presents this great and joyous warm feeling and is popularly referred to as Genna in Amharic. Genna over the years has always been a pinnacle of vibrancy but this season the lights have dimmed down as a result of the pandemic.
Amongst the festivity, Christmas is a year where stores, homes and streets alike are filed with decorations. Similarly, during Genna boutiques are often spotted displaying red cloths, Christmas lights are lit as well as huge Christmas trees decorated in the corners or entrances of malls. The Ethiopian Christmas is often quite unique from the rest of the world as it is always welcomed by a 43 day fasting prior. Although the fast has been smooth thus far, the holiday market seems to have become a bit slower and much quieter, a shadow of what it once was.
Genna is often embraced with joy and celebrated in groups of friends and family by eating an array of scrumptious Ethiopian delicacies such as ‘Doro Wot’ (Ethiopian National Chicken dish), lamb stew and mouthwatering beef stews accompanied with Injera and traditional drinks. However, a myriad of challenges stemming from the pandemic effect/ burden, current situation of the country, slow economy have become a negative contributor for the slow season as ‘business becomes very slow.’ Slow season is a common complaint shared by both parties’ between the consumers and the buyers. The capital in previous years was graced by the presence of cattle, chicken and eggs amongst a flurry of activities in different streets but that seems to have fizzled.
Muktar, who owns boutiques at Megenagna recalls previous Gennas as seasons where the streets were full of activities filled with high purchasing power by the consumers. “At Christmas time, we usually sell kids cloths at a rapid pace. Similarly, cloths for other ages are also high. This time round there is low demand despite having clothing products,” Muktar noted as he expressed how much the degree has killed the pockets of the consumers.
Beside the boutique business, the cattle market in the capital has become low unlike recent seasons where cattle would have been sold out within the first two weeks before the holiday.
During the holidays, it is always fun to visit holiday expos at the Addis Ababa Exhibition Center, which is buzzing with exciting crowd, music and food. However, the shopping experience might be less fun this time round. This comes after the restriction to public gathering and closure of Bazaars and Expos following the pandemic outbreak. After a yearlong break, the last week of December served exhibitions at exhibitions at different places of the capital. The prices are comparatively lower to the normal market and as result people flock in numbers to save their coin whilst having a great experience. Trade fairs have been difficult to take part across the country owing to the insecurity challenges and the pandemic. The Genna Expo that was recently launched showed low turnout. The vendors lamented of the low turnout as opposed to other years as well as reluctance to purchase items. The expos are still on going at the Ghion hotel.
As expected, the holiday market also reflected a slower movement of things as well as not so cheap goods. Food items a household necessity during the holidays. These food items can range from groceries to live chicken, eggs, sheep and butter.
Traders in the capital, source their butter, eggs and chicken from various parts of the country mainly from Harer, Gojjam, Arbaminch and Jimma. In most markets across Addis Ababa, the price tag for eggs currently ranges from birr 5.50 to 6 birr. The price of eggs has remained stable at the turn of the new year, despite low supply and demand as opposed to the previous trading of egg and chicken products in previous years.
Similarly, household items such as a kilo of butter ranged from 320 birr to 350 birr with not much increase projected than last year’s price.
A kilo of onions is priced at a price range of 13 birr to 16 birr which is almost similar compared to the price last year as well as during the past three holidays.
Like the onion market, a similar trend was also observed in the capital’s biggest cattle markets, Kera. Kera, one of the largest cattle market is waiting for the last days to in expectance for the market to rocket in sales. The supply of cattle comes from far and wide from the likes of Harer, Wellega, Bahirdar, Jimma, Gonder and Wolayita mostly used for the celebration. Though the country has been battling the pandemic and the recent conflict the price has stagnated.
For cattle acquired from Harer is said to cost 20,000 birr and that of Wellega ranges between 20,000 birr to 30,000 birr whilst Bahirdar 25,000-40,000 and cattle from Wolayta costs the least price ranging between 15,000-20,000 birr.
Fitsum, a cattle trader at Kera, says the market may show increase of 1500 to 2000 birr in respective prices at the last or peak final days of the holiday but not much increase will be expected when compared with last year. This is attributed by a decline in supply of the cattle related with the political unrest of the country.
During holidays it is a common scene to see herds of cattle, flocks sheep and goats that are to be consumed for the holiday along with men carrying live chickens in neighborhoods.
During the days leading up to Genna, a small sized sheep will easily sell for 3,000 birr with a midsized sheep costing 4,000 and above. The delight of having a sheep continues to be out of reach for many during the holiday and those who cannot afford to spend 3,000 birr will simply buy beef from the butchery to make a special meal.
Chicken, is another holiday favorite and is what many resort to, and for this holiday live birds were selling between 250 and 300 birr. As most people prefer to buy live chickens for religious and freshness reasons, processed frozen supermarket chickens still remain cheaper.
It’s not all about meat alone, vegetables remain as important during the holiday as well. Although not a lot of change has been seen with vegetables lately, some items such as garlic which skyrocketed around two years ago, hasn’t shown any difference. Garlic is sold for 60 birr per kilo; red onions which are extremely important for most holiday meals are sold for 16 birr per kilo, an improvement from last holiday when they sold for 18 birr per kilo. Tomatoes are going for 10 birr per kilo, while carrots are 8 birr and potatoes are 7 birr.
The above prices are usually found in open markets, prices at smaller fruit and vegetable kiosks around the city will be higher. As always, in some markets, shoppers will be able to get discounts if they are buying in bulk. Other shops such as Fresh Corner also provide discounts on seasonal produce and are worth checking out.
Although it is said the day before a holiday is the best time to by sheep and chicken, vendors usually get anxious to get rid of their stock and go home, there have been times that this has not been the case.
Optimistically, the slowing of everything will soon change and with a new kind of spirit in the air that seems to be felt, many are hopeful that things will pick up again.
The Central Statistics Agency’s monthly inflation data showed that the total inflation recorded in December 2020 was 19.5 percent higher than the same month last year.
Also according to the central statistical agency December showed a slight decline in grain prices.
Inflation compared to the same month last year shows current inflation, of which food inflation rose by 22.7 percent in December 2020. Most cereals (especially rice) this month, Teff, wheat, maize, barley and sorghum prices decreased slightly over the previous month. But meat prices continue to rise. Some foods, especially tomatoes, onions, garlic, cabbage, carrots, butter, cooking oil, and cheese and eggs, have also declined. However, inflation in the same month last year was relatively low compared to the same month last year.
On the other hand, the inflation of non-food items index increased by 15.8 percent compared to the same month last year. Over the past few months, inflation in non-food items has been steadily rising. Inflation of non-food items in the index is one of the main reasons for the increase over the same period last year, especially in clothing and footwear, rent, home care and energy, furniture and home furnishings, home furnishings, medical and transport, especially in cars. It is an increase in prices. Overall inflation in December 2020 showed an increase of 0.6 percent compared to the previous month.
Alemtsehay Lelissa
Name: Alemtsehay Lelissa
Education: Degree in Law
Company name: ORNAS HANDCRAFT
Title: Manager
Founded in: 2009
What it does: Hand-woven textile home accessories
HQ: Addis Ababa
Number of employees: More than 10
Startup Capital: 32,000 birr
Current capital: 3.5 million birr
Reasons for starting the business: Passion
Biggest perk of ownership: Hard working and good social interaction
Biggest strength: Persistence
Biggest challenging: Manufacturing space
Plan: Expanding and working hard on export market
First career: Teacher
Most interested in meeting: PM Abiy Ahmed
Most admired person: PM Abiy Ahmed
Stress reducer: Prayer
Favorite past time: Spending time with my child Bama
Favorite book: Bible
Favorite destination: Europe
Favorite automobile: Toyota Rav4
HUMANITARIAN AID
In 1933, Einstein went on to found the International Rescue Committee in order to ‘Assist Germans suffering from the policies of the Hitler regime.’ Since then and close to nine decades now, the IRC has gone on to help millions of people whose lives and livelihoods are shattered by conflict and disaster to survive, recover and gain control of their future. In Ethiopia, Shewaye Tike, has served the IRC in realizing its mission as a seasoned project coordinator for close to 20 years. Shewaye, throughout the years has been diligently devoted to bring lasting changes to the lives of refugees and vulnerable groups. She sat down with Capital to share the rich history and current projects of the IRC in Ethiopia. Excerpts;
Capital: IRC has been in existence in Ethiopia for two decades now. What have been its major contribution to Ethiopia from the organization’s perspective?
Shewaye Tike: Over the past 20 years the IRC has been supporting disaster or conflict affected populations through humanitarian interventions. Its main contributions are:
The IRC Ethiopia CWI implements GBV response and prevention activities. Since 2015, the IRC provided case management services to 6,077 GBV survivors; enrolled 5,307 refugee adolescent girls in a mentor-led, curriculum-based life skills program called Girl Shine; reached 34,284 displaced diverse women and girls through dignity kit support; and provided business skills training and startup cash to 450 clients. The CWI team also conducted sessions with 4,375 community members in the Engaging Men through
Accountable Practice (EMAP) program since its rollout in 2018. Through various awareness-raising activities, CWI has reached over 387,120 individuals to bring the community into discussions on power, gender, and practical pathways for building safer and more gender-equitable communities.
Ethiopia has a youth bulge, currently estimated at 30% of the total population. However, the job market is not keeping pace where youth (ages 15-29) are 4 times more likely to be unemployed, leading to irregular migration. The IRC, through Private Sector Reinforcement Initiative to Stem Migration (PRISM) project, was able to reduce irregular migration in Somali and Sothern Nations, Nationalities and Peoples (SNNP) region by 51% through creating local level economic opportunities for youth and women. The IRC also supported 12,600 disaster-affected households through cash transfer and multipurpose cash transfer.
The IRC has been involved in supporting IDP children in SNNP region through building temporary learning spaces, providing school materials, facilitating psychosocial support, teacher training, school feeding, accelerated learning programs (ALP) and accelerated school readiness (ASR). These interventions have made the IRC one of reputable organizations in Ethiopia to implement Education in Emergencies (EiE).
In December 2010, the IRC completed the construction of one of the largest water systems in the country; the Melkadida water system. The Melkadida water supply system intake stations were constructed at the bank of the Genale River. Since the first week of February 2011 until today, the water system is serving close to 194,000 refugees in Bokolmayo, Buramino, Heloweyne, Kobe and Melkadida camps of the Somali region.
The IRC quickly responds to people affected by natural disaster and conflict through non-food items that include emergency shelters and household utensils.
To contribute in combating high cases of malnutrition and acute emergency health needs, the IRC created its own Mobile Health and Nutrition Team (MHNT). The MHNT has been primarily serving areas where there is no access to healthcare or insufficient number of health workers. The MHNT, in collaboration with local health offices is providing medical consultations, treating different disease, providing delivery and family planning services and referral linkage for advanced cases and nutrition services for communities in need. Through its MHNT, the IRC has reached a total of 1,059,673 clients affected by drought, diseases and conflict.
Capital: What have been the main humanitarian challenges in Ethiopia over the years?
Shewaye Tike: The main humanitarian challenges in Ethiopia have been reoccurring draught, internal conflict, flood, and most recently, desert locust invasion and COVID-19.
Capital: What are the main activities that IRC has been doing with regards to refugee education in the country?
Shewaye Tike: The IRC provides technical and capacity building support to the Administration of Refugee and Returnee Affairs (ARRA), which is responsible to run primary schools. The technical and capacity building support include professional teacher development for refugee through intensive teacher training, provision of much needed textbooks, reference teachers’ books, laboratory equipment, school materials and furniture. This technical assistance aims to improve the quality of education in refugee schools and increase enrollment and retention.
The IRC’s Early Childhood Care and Development (ECCD) program-an education program for children between age 3-6 to prepare them for primary school is provided to refugee children in Tigray and Somali regions. Within the ECCD classrooms, the IRC employs the PHC (Pre-school Healing Classroom) approach to ensure the classrooms are safe and predictable places for children to cope with their difficult living circumstances. Children learn basic literacy and numeracy skills to express their needs, play cooperatively, follow rules and manage their feelings. These skills are developed through consistent, nurturing interaction with adult caregivers that provide children with a sense of comfort, security and confidence. Through the PHC approach, trained ECCD facilitators support children to learn a sense of control, belonging, and pride and how to develop positive social relationships to help young children boost their holistic development.
Capital: What projects or programs have been started in 2020 so far and at what stage are they in at the moment?
Shewaye Tike: There are more than 10 projects that the IRC started in 2020. The biggest project that the IRC started implementing in 2020, however, is the PlayMatters project. PlayMatters is a new initiative aimed at delivering play-based learning to refugee and host community children in Ethiopia. The initiative, led by the International Rescue Committee alongside a consortium of partners, aims to strengthen children’s resilience and build their social, emotional, cognitive, physical, and creative skills. PlayMatters is working with various actors including parents, caregivers, educators, and policy makers to explore avenues of mainstreaming learning through play as a method of teaching among learners aged 3-12+.The project started at a critical time when school learning has been disrupted by the COVID-19 pandemic. Following the closure of schools in March, the government and other education partners have been supporting home-based distance learning to assist children learn remotely through television, radio, and digital platforms. To complement these efforts, PlayMatters in Ethiopia developed and distributed family-friendly learning packets for children, and an educator’s guide containing simple learning games which can be played at home. PlayMatters also supported the airing of educational radio shows to complement the learning packets used at home. This support will continue when schools fully reopen. The project is now laying foundations for fostering learning through play within existing learning structures and teaching curriculum in schools and other learning centers.
The 5-year PlayMatters project is led by the IRC, and includes Plan International, War Child Holland, the Behavioral Insights, Team and Innovations for Poverty Action in partnership with LEGO Foundation.
The overall grant is $100 million covering Ethiopia, Tanzania, and Uganda. PlayMatters in Ethiopia is being implemented in Afar, Benishangul-Gumuz, Gambella, Somali and Tigray regions.
Capital: How is your organization coping with the global pandemic here in Ethiopia. What challenges have you faced and how have you coped with them? What projects have currently been ongoing or finalized during the COVID times with regards to refugee works here in the country and its borders?
Shewaye Tike: After movement restrictions and school closures were imposed in Ethiopia, the IRC was forced to temporarily suspend many of its activities. After movements restrictions were lifted, the IRC, by recognizing the potential devastating impacts of the disease on disaster and conflict affected communities and with the objective to reduce the negative consequences of the spread of COVID-19 in humanitarian settings, has been responding to the needs of the clients we serve across the country. Working with our partners and government offices, the IRC has been able to mobilize funds and staff to respond through both preventative and responsive measures, in targeted districts. Here is our reach by the number:
Over one million people reached through refugee and local WASH and health programs with social and behavior change communication (SBCC).
275,000 people reached through Emergency Rapid Response (ERR) with COVID-19 messaging such as signs and symptoms, ways of transmission, treatments, prevention and control.
18,630 solar radios were provided to students to facilitate distance learning during school closures.
18,907 students benefited from home learning packets distributed in Tigray and Somali regions during school closures.
Over 26,500 personal protective equipment and products provided to women and girls, steering committee members, and school gender club members.
Over 18,600 Hand washing facilities built at household level, institutions and public areas.
84 COVID-19 prevention and mitigation trainings conducted targeting internal staff, external incentive workers and partners, and social workers.
Capital: In recent times, the number of internally displaced persons has been on the rise of which most of them do not get enough support. What has IRC been doing in this regard?
Shewaye Tike: The IRC has been responding to the needs of internally displaced persons (IDPS) with the following interventions:
Water, Sanitation, and Hygiene (WASH): the IRC supports short term potable water provision through water trucking for IDPs; distribution of household water treatment chemicals with containers; rehabilitation of existing water systems; construction of gender-sensitive, accessible, and culture and age-appropriate emergency latrines; construction of waste disposal pits; and community mobilization to raise awareness on beneficial WASH practices. Nutrition: The IRC responds to acute malnutrition in many parts of the country through sub-awards to other agencies. These responses adopt the community management of acute malnutrition (CMAM) approach and support the existing government health system if overwhelmed by the increased malnutrition cases.
Health: In response to outbreaks, the IRC supports health facilities in case management, through training and provision of essential drugs, supporting government’s mass immunization activities, and conducting integrated disease surveillance and response. The IRC also deploys mobile health and nutrition teams (MHNTs) to remote areas to ensure IDPs have access to health and nutrition services.
Non-Food Item (NFI) and Cash Distributions: The IRC distributes non-food items such as food preparation supplies, dignity kits (sanitary napkins, flash lights, clothing, and other suppliers for women and girls of reproductive age), and shelter kits of bedding and materials to repair damaged homes. The IRC also provides cash assistance to affected households to meet basic survival needs.
Education in Emergencies: The IRC builds Temporary Learning Spaces (TLS) to create access to learning in a classroom. Teaching and learning materials and energy biscuits are provided for students to pursue their education. Teachers receive training on psychosocial support and learner-centered teaching and learning methodologies.
Protection: The IRC provides psychosocial support to women and children in IDP sites, conducts community mobilization and awareness-raising sessions aimed at reducing the risk of GBV, and training for local government staff on preventing and responding to GBV. The IRC also provides trainings on preventing sexual exploitation and abuse (PSEA) for internal and partner staffs.
Capital: In the recent military offence in the Tigray region between the federal government and the TPFL, in an unfortunate event, some of IRC workers were killed in Hitsats Refugee Camp in Shire, Ethiopia. Can you kindly expound more information on this?
Shewaye Tike: The IRC confirmed the killing of one staff member in Hitsats Refugee Camp in Shire. Communication with the area is still difficult and we are still working to gather and confirm the details surrounding the events that led to the death of our colleague.
Capital: Regarding the conflict in Tigray region, government has also been warning the Eritrean refugees to stop their participation in illegal acts. What has IRC been doing on this front?
Shewaye Tike: We don’t have information regarding this.
