A committee designed to make doing business easier has announced Ethiopia may not see a significant ranking change on the World Bank Doing Business annual report which is going to be published in the coming October.
The committee, formed about six months ago, and chaired by Prime Minister Abiy Ahmed met on Tuesday July 23 to evaluate activity so far and look at improvements on the procedural, administrative and issue of new laws. They plan to develop a short, medium and long term strategy.
Abebe Abebayehu, head of the Ethiopian Investment Commission (EIC), said that World Bank has collected the required data or documents to be used as inputs for the doing business annual ranking through April.
According to the commissioner reforms had to be fully implemented to impact the Doing Business Ranking.
“The medium term moves shall change our ranking, while most of the laws that were ratified have been run after the World Bank deadline,” he added.
Abebe who presented the medium term reform roadmap, reminded people that within five months of the short term reform period 8 new laws, 40 procedural and administrative reforms were enacted.
“The short terms reforms focused on laying the ground for more ambitious medium and long terms reforms,” he said.
Regarding the new laws, the amendment of the National Bank of Ethiopia loan and advance law that would allow movable assets to be considered as collateral; and using software instead of cash register machines were also amended under Ministry of Revenue proclamation; the other new law by the Ministry of Trade and Industry is amending the business license registration that annulled mandatory office renting.
Publishing trade names in the newspaper has also been suspended and replaced by an online process.
Abebe said that the regulation for the implementation of business license and registration proclamation has been tabled to the Council of Ministers.
Construction permit applications at the Addis Ababa City have also been changed and replaced by an online process, the planning and consultant period has been reduced to 45 minutes from 3 days, and the approval of plan date was also reduced from three weeks to three days.
The city administration is also working to digitize land deeds, and the land disputes can be processed online.
“The city administration changes are also an example for other cities so this new system is crucial,” he said.
The credit information system coverage was expanded from 0.4 percent to over 5 percent of the adult population. Currently the small scale loan approval is aggressively taken by micro finance institutions.
The online customs clearance system, electronic single window process, also has a pilot stage and after December it will be fully operating. Some other customs activities like pre arrival clearance is being undertaken, besides several cuts in the process at customs on imports and exports.
Regarding tax e-filing and e-payment the ministry has improved its operation and currently the tax payment is undertaken via banks.
Regarding enforcement of contracts improvements commercial bench increases and changing practices at the Federal Supreme Court has added two commercial benches.
The commercial code, 60 year old law that has been revised for about two decades will be replaced by December 2019.
In the midterm reforms that ends in December the coverage of e-filling and e-payments is expected to be 100 percent on medium tax payers in Addis Ababa for all type taxes, introducing mobile payments and covering 30 percent of small tax payers for all types of taxes.
Reducing VAT refund time from the current 48.7 weeks by 90 percent is also expected.
Eliminating mandatory hiring of clearing agents for all exporters and reducing physical and documentary inspection for import and export has been recommended.
Another recommendation is that midterm imports (spare parts considered as a benchmark for import by the World Bank) physical and documentary inspection to reduce the red from 33.6 percent to 15 percent. For export (coffee is the World Bank benchmark) to reduce the yellow from current 100 percent to 25 percent.
In the long term that is from January to May 2020 it has been advised that the export bank permit procedures to remove major exports. Coffee would be used as a pilot program for this.
Regarding the import export corridor to Djibouti the number of check points recommended to be reduced to one from the current three.
Abiy finally assigned the Ministry of Trade and Industry to lead the medium reforms which were managed by EIC in the short term and advised the ministry to share the experience of Rwanda, a benchmark for Ethiopia to dramatically improve their World Bank rank. The committee’s vision is for Ethiopia to be in the top 100 doing business ranking by 2021.
Ethiopia hopes for top 100 business ranking
Hawassa hotels occupancy rates drops to 6%
The southern region’s capital city, Hawassa, which in normal times has nearly 100 percent hotel room occupancy has only had a six percent occupancy rate in July. Since conflict occurred on July 18 the situation has gotten worse.
Hotel owners who spoke with Capital said restaurants and cafes have seen a 70 percent decrease in business. People who want to visit Hawassa are reserving hotels Sashamane and Zeway.
There are 11 hotels with star ratings and 12 without which employ over 2,000 people.
Lewi, Hawasa Central, Haile Resort, Pyramid, Ker/ Awud, Rori, Tadesse Enjori, South Star, Hawassa Lake View are star hotels hit by low occupancy rates.
Henok Shimels a consultant for Ker/ Awud Hotel told Capital “unless peace and tranquility is restored in Hawassa the hotel industry will be in real danger because many hotels witnessed a sharp drop in their business this month , [with] many of them indebted to banks.’’
“Last Friday was the yearly celebration of St. Gabriel and on this day thousands of Orthodox Tewahdo believers would have come to the city to celebrate but this time there are only few visitors,’’ he added
Henok asked the National Bank of Ethiopia to order banks to elongate the return of the loans.
“We can’t pay our loans with this kind of situation and the banks should understand that and work with us by elongating the return of the loan payments,’’ he added.
Another hotel representative said, “since July, some foreign states have warned their citizens not to visit Hawassa and this has deeply affected our business,” he said, adding that five-star hotels that mainly rely on foreigners are the most affected. Now foreign people are afraid to visit Hawassa for the time because they fear that they do not have a safe exit if the situation deteriorates further.”
“Now we are trying to minimize damages by laying off some employees because we can not afford to pay all of our expenses and some hotels are starting to remove part-time employees and some have started cutting back on fixed employees. But if the situation deteriorates further we will start giving people their day offs or even ask them to work for free,” he added.
Yared Feyissa, owner of South Star Hotel fears that the hotels will shut their business if peace is not secured. “If you don’t have customers you can’t get money and if you can’t get money you will not pay salary for your employees and we are experiencing it now and if it will continue like this shutting the business is the only option.’’
Hawasa has experienced trouble since Sidama activists vigorously pushed to unilaterally declare a new regional state on July 18.
The threat of large-scale violence in the regional capital Hawassa was largely averted after a Sidama opposition party agreed to delay the declaration and accept a government offer to hold a referendum in five months, not all Sidama people accepted the delay. Currently the city is under the control of a command post formed by the federal government. The number of people killed in Sidama zone since July 18 has risen to 35 and 400 civilians have fled their homes.
POLARIZING GLOBALIZATIOIN IN TROUBLE
The ruling ideology of the world order is anchored on the powerful human vice of unadulterated greed. Almost everything we do in our world system, collectively or otherwise, is based on this principle, even though it is not explicitly stated as such by the global status quo. The economic aspect of the system upholds exploitation and competition as the alpha and omega of collective existence. Its political governance, which espouses certain aspect of democracy, mostly representative/electoral democracy, is dictated by the ‘rule of money’, to a very large extent. Such a regime of plutocracy is pronounced in the core countries of the west, particularly in the United States of America. After WWII, the US became the reigning hegemon and managed to dictate global policies, economic and more, without effective impediments, despite the socialisms of the day. The globalization thus promoted, willy-nilly, ruled the planet, up until now!
As always, we are quick to qualify the existing globalization as a polarizing one. If it weren’t so polarizing, there wouldn’t be myriad challenges against it, given its very short existence (post WWII). One of the hallmarks of the current polarizing globalization is its violent expropriation, both from nature as well as from the weak peripheral societies. This has been done, to a large extent, by a cleverness of stealth dimension! By leveraging the on-going destructive ideology of commodification, which has given rise to excessive monetization, the system managed to hoodwink all and sundry, including its latest victim-Maoism! The current globalization utilizes various tools to promote its objectives. To this end, its core ideology of greed has been elevated to a sacrosanct religion of global prominence, with money as its supreme deity! Such a totalitarian doctrine stifled inquiries all over the modern world, even in those countries that were once regarded as relatively liberated/enlightened (Nordic, etc.). Generally speaking, the system as a whole has lost its propensity to engage in critical reflections. This attitude is no more confined in the realm of social thoughts, but has also encroached into the world of natural philosophy or what is now called the hard sciences!
The institutions that actively promote the polarizing globalization of our times are quite numerous. Suffice is to mention only the significantly influential ones. From the indoctrination mills of the global universities to institutions of global economic governance, (IMF, WB, WTO, etc.) from the machineries of global political governance/dominance, (UN, NATO, etc.) to the integrated media, consisting of the entertainment industries, including spectator sports, (which must fall under the category of entertainment, per force, rather than a vocation promoting healthy living) are the main tools of the prevailing unsustainable globalization. The ever-canny global status quo has thoroughly mobilized, almost all of the world’s sheeple, (human mass) into worshipping its religion. Anything that is construed as lying outside the kingdom of greed is shot down viciously. However, there have now emerged issues that are not lending themselves for the usual facile narrations. What is proving difficult to hide for the ever-manipulative status quo is the natural phenomenon that resulted from man’s obsessive interference in the workings of nature. Climate change, species destruction, acidification of the oceans, diminishing of resources, inadequate sink for all our pollution, etc., are gradually entering the consciousness of the sheeple, wherein hope resides!
Despite the overwhelming power (military, finance, media, etc.) of the establishment, there are still brave souls across the planet willing to expose the system’s comprehensive objective. Chelsea Manning, Julian Assange, Edward Snowden are amongst the vanguards. Unfortunately, the wretched in Africa still lack determined souls willing to ‘rock the boat’, so to speak. After half a century of flag independence, we Africans are still wallowing in the sickening world of ‘black skin white masks’, as if we are still in those days of colonial affliction (psychopathology of colonization), as thoroughly explained by the Martinique psychiatrist Frantz Fanon! Luckily and at the global, an increasing number of people along with activist-intellectuals are moving towards liberation of thoughts and sustainable of deeds. At the same time, the establishment continues to become visibly moronic! See the articles next column, on page 35.
“CIA director Mike Pompeo has called Wikileaks a ‘hostile non-state intelligence service’ because Wikileaks obtains accurate leaks, publishes them and protects it’s sources-as all serious media should. What does the CIA expect the press to be? A ‘docile pro-state stupidity service?” Julian Assange. Good Day!
It looks like sell or die
Well… what did you expect?
Last week the news was out: Ethio-Telecom is on sale – a sort of kinder privatization with government owning the majority share. The market is also to be liberalized, allowing two new operators to compete.
Tell me who benefits? Of course the corporations who invest for profit. When assets are privatized prices will always be higher and quality will always be lower because that is the way to maximize profits and private enterprise exists primarily to make profit.
We understand the three or four remaining jewels of public companies are also being lined up for sale to Saudi or Emirati royal tycoons, French or Indian multi-nationals. I suppose this government is already busying itself on the dossier. I assume our new leaders call this natural progress, or strategic retrenchment, or even better, neo-liberal normalization.
It’s the way of the future say the geniuses running our economy.
It’s a swindle, we the mortals say. It ‘s a fraud to enrich corporate interests at the expense of the long-term interests of the Ethiopian people in assets their taxes have helped build.
Why would anyone believe that a small group of inexperienced advisors in economics could stimulate an economy by getting rid of top money making assets?
And why now, only 20 years after African countries crazy experiment proving that privatization don’t work, would they – including Prime Minister Abye Ahmed – believe they can pull a wonder with no experience in regulations, shitty experience in past privatization schemes, and dangerously wobbly political environment? Why would they think that privatizing Ethio-Telecom could make the country and the people richer?
Only an extraterrestrial would believe such claptrap.
Frankly I would have thought a leader of Dr. Abye caliber would have opted to transforming Ethio-Telecom into something very different, into some first rate company operating even beyond the borders of Ethiopia, a sort of 21st century African telecom, like ET Airlines. Imagine, what a feast that would have been! Unfortunately, our present day leaders have long lost that can-do, patriotic, optimistic attitude…
So instead of selling Government owned assets, efforts should have been made to make sure they are run efficiently and have a management and workforce that is held accountable so they continue to deliver a dividend but also meet public expectations of satisfactory service delivery.
Government then has a responsibility of “promising within their means”. If borrowing is required then there should be a business case, a return on investment case and a public consensus on need and outcome. That’s how we can start responding to the third and fourth industrial revolutions. A topic for another time.
Now, let’s look at the justifications for disposing the ET-Telecom. Are there any? Did we really ponder on what the government’s strategy should be on privatization issues? Are there assets this government considers as strategic; what are they and why are they classified as such? If the government is required to be present in the economy, in which sector will that be, and to do exactly what?
No answers.
My issue with Privatisation, beyond all others listed, is that the money injection to the Government of the day is like a financial “drug fix”. Once the windfall is spent future governments will work up a new debt level. And because the dividend from the “sold assets” is no longer available the government has a greater budget shortfall to make up.
Yes, ET-Telecom has been managed poorly, been ripped-off by those responsible to run it, abused and taken for granted, but still the company remains one solid asset this government can depend on. It’s an entity that can pay its current debt and hand more cash to the government purse. Just read the article on the Daily Monitor “For the 2018/19 fiscal year the company (Ethio Telecom) has amassed 36.3 bln Birr in revenue before tax… During the [eriod, the company managed to pay 16.2. bln Birr tax…also managed to pay 10bln Birr of its loan accumulated for the past three years”.
And this administration wants to sell this? No good judgment there!!
As always the World Bank is happy to advise the government on privatization. It comes up with the same old argument: First, it will say, it’s to help the nation curtail the financial burden on federal government and to bring investment and proficient management in the country; and secondly to minimize budget deficits by improving the consumer demands to meet escalating needs of innovatory information technology. Conclusion: no need for Ethiopia to own a national telecom services. MTN or Orange or Etisalat will do the trick!
There’s not much juice left in that lemon….Is there?
And yet we go along with this bull.
Now, if we assume the government sells Ethio-Telecom for financial reasons, i.e. Reduce its debt, or increase efficiency, is that the right answer. At today’s low interest rate, can selling be considered the best option? Wouldn’t the revenue stream of Ethio-Telecom be more rewarding to the nation in the long term? Is there really appetite in the market today to pay ‘good money’ for acquiring half of Ethio-Telecom; do we want the Arabs or the French to determine path forward ; and one more question – do we really know where the proceeds of this asset goes? Does it all go to pay the nation’s debt? Install Internet in public schools? Offer computers to students? Construct the new Parliament building?
Where? Where will it go?
The sponsors of this initiative and those parliamentarians who voted for it, including opposition, media and civil society organizations that let this go without any scrutiny are affronts to God and Nature… destroyers of the Nation… and conductors to economic catastrophe.
Yes, we’re on our way to Hell….Yeaaa!!
