The FDRE Customs Commission in collaboration with Spotlight Communications and Marketing held a discussion with governmental agencies and private sector stakeholders regarding the impact and havoc from contraband as well as challenges in the combat against illegal trade in Ethiopia.
Representatives from the Federal Customs Commission; Customs branch offices of Harar and Dire Dawa, Bureau of Trade and Industry, Health Bureau, Revenue Bureau, law enforcement agents from Police and the Defense force along with stakeholders from the private sector participated in the discussion that was held at the Wonderland Hotel.
Opening the Conference Dineer Ahmed, Head of Harar City Peace & security office, Deputy Officer explained the challenges witnessed in relation to contraband saying that smuggled goods are threats to the growth and development of the country. “Every day we are victimizing children, mothers and the society with poor quality products” He said. He adds; “this is not solely the government’s problem; we should all be doing our part in defining the depth and breadth of the disaster and preventing the issue. We are also happy because the discussion started from the city of Harar”.
Deputy Commissioner of the FDRE Customs Commission, Mulugeta Beyene on his part said that illegal trade is growing from time to time and its ways continue to renovate their nature every time. The Deputy reaffirmed the Government’s commitment to prevent this problem; “ other than the day to day task of the Commission to combat illegal trade, the government is more determined than ever and has established and commenced operation of a National Tasks Force that is led by the Deputy Prime Minister of the Country” said Mulugeta. Deputy Commissioner Mulugeta also reiterated on the need for a concerted effort saying “if we all fight together in all areas of the problem, we can reduce illegal trade significantly”.
The Deputy adds “we can stand against illicit trade doing what is expected from us; that is by bringing contrabandists to justice, by refusing to buy illicit products, and as law enforcement agencies by pushing with our combat against illicit trade; we can protect our families and our siblings from products that have no ingredient or expiry information such as packed foods, medicines, ointments, cosmetics and illicit cigarettes”.
Even though National Tobacco Enterprise is the only company with the monopoly rights to produce and distribute tobacco in Ethiopia; Tobacco remains one of the major illegally imported products in the country. Solomon Haile, head of the anti-illicit-tobacco-trade function in the organization says: “About 40 percent of the country’s tobacco trade is illicit. And in the Eastern part of Ethiopia, 90 percent of the market share is contraband. Hence, this weakens the investment of the taxpaying organization that was privatized two years ago to foreign investors and also reduces the amount of revenue the government should have collected in the form of tax from the legitimate business”.
After thorough discussions on resolutions to combat illicit trade, the half day meeting was concluded with a six-point position statement presented by Federal Customs Commission Deputy Commissioner Mulugeta Beyene and. Bekri Abiyala Harar city Attorney General Office.
Stopping Contraband requires the efforts of all stakeholders
The Genesis of Instability In The Middle East
Unless some drastic measures are taken, the various conflicts in the Middle East will become ever more intractable and exact a horrifying toll in blood and massive economic dislocation. The continuing severity of these crises and their repercussions will depend on whether or not the combatants assume a realistic posture, or new leadership rise and commit to finding equitable solutions that can endure.
Alon Ben-Meir, Senior Fellow at New York University’s Center for Global Affairs and the World Policy Institute in the United States strongly insist to keep in mind though that the turmoil we experienced in 2019 may further intensify in 2020 because of the continuing global crisis of leadership and the challenges posed to the global order that was established in the wake of World War II. The review of the last seven Mideast conflicts reflects these developments and raises the question as to what must be done to change the dynamics in the hope of solving some of these conflicts. Here is a quick guide to what ails the Middle East overall.
The Israeli-Palestinian conflict is the oldest and most intractable conflict that has consumed both people for more than 70 years, and has been further impaired by their leadership’s refusal to recognize each other’s right to the same land. The leaders betrayed their people by failing to appreciate each other’s psychological, religious, and historic attachment to the land and being blind to the inter-dispersement of the population that makes coexistence inevitable. Israelis and Palestinians must now choose between endless violence, or living in amity and peace. Alon Ben-Meir argued that given the crisis in leadership, the hour calls for new visionary and courageous leaders who recognize that their people’s future security and prosperity still rests on the only viable option – the two-state solution.
Following the revolution in 1979, Iran sought to become the region’s hegemon equipped with nuclear weapons. The turmoil sweeping the Middle East points to Iran’s complicity in most of the conflicts destabilizing the region, including Lebanon, Yemen, Iraq and Syria, while enlisting, financing and training jihadist and terrorist groups and threatening Israel’s existence. Although the United States’ withdrawal from the Iran deal was a mistake, Iran’s defiance led to crippling United States sanctions. Seeking regime change and destroying Iran’s nuclear facilities is not the answer.
While Just about every country in the Middle East is understandably very concerned about the current United States-Iranian strife getting out of hand in the wake of the assassination of general Soleimani, still the only solution rests on the resumption of United States-Iran talks. Under any circumstances Iran will have to play a constructive regional role and abandons its grandiose delusion to become a nuclear power and the region’s hegemon.
Since Iraq was established in 1932, it went through frequent political turbulence, overshadowing its glorious history. Following the revolution in 1958, the Ba’ath Party, a nationalist and socialist regime, rose to power and was able to finance ambitious projects throughout the 1970s. In 1979, Saddam Hussein, a ruthless autocrat, assumed power and led the country to the disastrous Iran-Iraq and Gulf Wars. The 2003 war killed over 100,000 Iraqis, decimated the country and invited Iran to exercise immense influence on all Iraqi affairs, while the people suffer from profound economic hardship. The current massive demonstrations demanding the ouster of Iran will ultimately prevail and restore Iraq’s unique national identity, for which all Iraqis yearn.
David Apgar, author of the book entitled “Risk Intelligence: Learning to Manage What We Don’t Know” stated that the Yemen war will be recalled as perhaps the most horrific humanitarian disaster in modern history. It is a proxy war pitting the leader of Sunni Muslims – Saudi Arabia, which supports the internationally recognized government and is determined to prevent Iran from establishing a foothold in the Arabian Peninsula – against the leader of Shiite Muslims – Iran, which backs the Houthi rebels. Yemen became the battleground, and the Yemenites are killed in God’s name. Tens of thousands have died, millions are starving and over a million children are infected with cholera, all while the country lies in ruin. Five years later, the warring parties have finally realized the war is simply unwinnable. Ultimately, both sides must negotiate a solution.
Syria’s civil war that started in 2011 is hard to fathom. What began as a peaceful demonstration became the most devastating war of the 21st century. Had President Assad responded to his fellow citizens’ demands by providing them with basic human rights, he might have averted a calamitous war that has killed nearly 700,000 people, rendered 11 million refugees or internally displaced and leveled half the country to the ground.
According to Michael Brenner, Professor Emeritus of International Affairs at the University of Pittsburgh, Texas, President Assad now is at the mercy of Russia, Turkey, and Iran, who are determined to maintain a permanent foothold in Syria. Syria may well become the battleground between Israel and Iran, while scores of militia, jihadist and terrorist groups roam the country with no foreseeable end.
Alon Ben-Meir explained Erdogan’s self-defeating dictatorship. Soon after Turkey’s President Erdogan came to power in 2002, it was believed that under his stewardship Turkey would become the first functioning Islamic democracy. He embarked on socio-political reforms and extensive economic developments, and engaged the Kurds to end a decades-long conflict while improving Turkey’s prospective integration into the EU. But then he reversed gears. For him, democracy was only a vehicle to promote his Islamic agenda and lead the Sunni Muslim world. He pursued his religious and ideological rivals with vengeance, imprisoning tens of thousands of Gulen followers and Kurds, along with nearly 200 journalists who are still languishing in jails. He will leave behind a legacy of a ruthless leader possessed with Ottoman revivalism, who squandered Turkey’s prospective brilliant future for a self-defeating dictatorship.
According to Alon Ben-Meir, the Afghanistan war, the longest in American history, should have ended one year after it began in 2001. It was clear that the Taliban’s initial defeat was temporary and that they would return to reclaim their inherent right to the millennium-old land of their ancestors. The United States’ efforts to establish a democracy, coupled with a mounting build-up of American troops and escalating cost, bore little fruit.
There are certainly many other countries in the Middle East and North Africa suffering from political instability, daunting economic hardship, violence, uncertainty and fear. Sadly, the efforts that have been made by the UN, EU, and the United States to quell or resolve many of these conflicts, be they in Lebanon, Libya, South Sudan, or many other countries, have largely failed.
Alon Ben-Meir strongly argued that the year 2020 will most likely be as turbulent if not more so than 2019 due mainly to the lack of American leadership and the rush of other powers, especially Russia, China, and to a lesser extent Turkey and Iran, to fill the vacuum the United States is leaving behind. Beyond that, however, we are witnessing a global transformation where nationalism, extremism and xenophobia are on the rise, millions of refugees are on the move and poverty and economic dislocation are rampant, which together greatly contribute to instability and violence. Sadly, these developments coupled with a worldwide crisis of leadership may well worsen before a new generation of leaders can rise and try in earnest to resolve many of these conflicts humanely, passionately and equitably to ensure their durability.
Exporters defaulting contract due to liquidity shortage
Ethiopian exporters are claiming that they are defaulting their contracts forcefully due to liquidity crunch at banks.
Eyob Tekalegn, State Minister of Finance, told Capital that the government has pumped additional nine billion birr to the banks by Friday January 17 through the National Bank of Ethiopia (NBE).
Exporters said as the usual trend the export sector is using pre shipment revolving scheme of banks to buy commodities for their export and at the same time loans under the scheme has been approved.
“But when it comes on the disbursement it has become difficult to get the finance,” they claimed.
According to sources, mostly the reason stated by financial institutions is that banks do not have ample liquidity in hand.
It has been reported that the financial sector is affected by lack of adequate cash in hand and at the same time the National Bank of Ethiopia offered 5.5 billion birr loan via bid for banks to calm the liquidity shortage. While sources said that the finance crunch is not showing significant progress over the weeks.
The private sector is also complaining that it is unable to access its own cash that it deposits at the financial institutions.
Exporters argued that the problem may be occurred by the government purposely for sake of sacking the money to control the inflation or other reasons.
They said that the export sector is a pillar of the country’s economy that has linkage from farmers to badly needed hard currency earnings for the country.
“The government has to see the export sector and should have facilitate a way out for the sector to access the finance, otherwise the sector would be significantly affected in this season if things are not solved,” one pulse exporter told Capital.
The exporter said that by itself the export sector is vulnerable due to several factors including contraband, under value export, quality and others issues and stagnated than growing from time to time.
“When the current cash problem happened the sector would be seriously affected and would lead exporters to default their contract that is also damaging the image of the country and the exporters as a business,” the exporter added.
According to the finance sector actors, the cash that circulates under the informal market or without banks is very huge and added that it might be higher than the transaction made under banks.
For this the contraband business played significant role besides those who are hoarding huge amount of money in their safes at home.
They advised the government to apply tangible control mechanism to smash the illegal actors since it know where the channels are, who are the players, and what are the product smuggled out of the country or in to the country.
Some also complained that they could not get their money on cheques for their payments from the banks. They further said that the bank to bank cheque settlement is very slow because the banks prefer to keep the money on their own safe than giving it away to other banks.
During a meeting held Sunday January 12 at Sheraton Addis with the deputy mayor of Addis Ababa, Takele Uma, one of the investor claimed “in the past we face the LC problem to access foreign currency but now the birr shortage has added.”
“I have 79 million birr deposit in bank but I can’t access 300,000 birr from my own account,” he said.
On the occasion Abe Sano, President of Oromia International Bank and head of Bankers Association said that even though the government accrued finance that it collected in terms of tax and other means, it reserved to disburse it.
“Currently the government is reserved to release finance and due to that the financial sector is affected,” Abe explained.
He said that if the government disburses the money the financial sector would be beneficiary. He said that he believed the problem is short term problem.
Eyob stated that to stabilize the market the government has pumped nine billion birr via the central bank for banks.
According to sources on Friday banks are asked for their bid document to take their portion from the nine billion birr.
According to the rule a single bank will not get more than 30 percent of the total offer. The amount will be repaid for NBE within a month time.
One of the bank presidents, who demand anonymity, told Capital that the fresh injection could not go to loan and advances since the repayment time for the central bank is very short. While he accepted that the nine billion birr will give a bit of a relief.
City will not float land bids anymore
The Addis Ababa City Administration announced that it does not have a plan to reinstate land lease bid while investors cry foul by the process of land allocations.
At a meeting held on Sunday January 12 with developers in the city Takele Uma, Deputy Mayor of Addis Ababa, disclosed that the city administration will not entertain individuals land request.
He said that the administration is looking the development of villages than single project. “I would like to accept the request of group of investor who want to develop jointly large areas,” he added.
“We have seen several plots transferred to individuals for the past several years but the actual result is unsatisfactory,” he said adding “we know that some investors opened a campaign on us but I assure you we will entertain groups request only.”
Takele told Capital that the lease bid will never be reinstated despite few weeks ago the officials at the city mentioned that they are under preparation to start the bid.
“We have a scheme that keeps the joint investment between a group of investors and city administration,” he explained.
Recently officials of the city Land Management and Land Bank and Transfer Bureau stated that the city administration is under preparation to reinstate the lease bid.
Currently the city administration facilitates a plot for few groups of investors or individual companies (investors from China and UAE) that it has share on the investment.
“The response of the mayor is very frustrating when we are waiting the bid to access plots for development projects,” said investors who were in the meeting.
Investors argued that while they are waiting the reinstate of land bid plots are transferring for selected individuals. “We have information that some investors are securing huge plots in the past few months,” one of the investors said.
At the same time they argued that plots are now up for sale than developed by those who received the title deeds.