The Ethiopian Association of Basic Metals and Engineering Industries (EABMEI) plans to create incentives to improve business.
At a discussion organized by the Addis Ababa Chamber of Commerce and Sectoral Association under the title: ‘Opportunity and Challenge of Metal and Metal Products Manufacturing in Ethiopia’ and held on Monday June 24 at Kaleb Hotel, Solomon Mulugeta, General Manager of EABMEI, talked about challenges to metal and engineering businesses.
He said that they are working to address several challenges including contraband and lack of focus in order to improve the sector which is seen as a big foreign currency generator and way to substitute imports.
During his presentation he recommended that the government provide specific incentives in metal and engineering as opposed to simply considering it part of general manufacturing.
“The government via its policy has to create specific incentives and follow up for metal and engineering,” he told Capital.
He added that the trading and manufacturing wings should be linked mainly for the export and import substitution operation. He claimed that due to lack of the link the two wings are working against themselves, improperly. Both, trade and manufacturing are crucial for development.
“Standard management and legislative action are not going to be sufficient,” Solomon said.
“For instance the National Bank of Ethiopia (NBE), suppliers’ credit directive was issued about two years ago, while the problem that the NBE directive created is not yet solved. That is the reason we are saying the problems are not being addressed enough,” the association head explained.
He stated that the industry can’t wait a long time for a solution. The sector needs organized body that combines professionals like economists, engineers and lawyers that usually follow the challenges including laws affecting the industry, according to the general manager.
The basic metal businesses which include re-bar, sheet metal and roof sheet, and tubular section production capacity in the country has reached 7.1 million tons and some other new industries are under the pipeline.
“Metal related businesses are increasing,” Solomon said.
From the stated annual production capacity the 4.2 million tons is associated with rebar. People who work in these industries say that even though they produce more than the country needs and generate foreign currency, they could have been even more productive.
Due to challenges the rebar market is still importing finished products.
At the discussion the other challenge that the association head and participants claimed is the growing of contraband and illegal import of sheet metal and roof sheet.
Solomon told Capital after the discussion that currently about 40 factories produce sheet metal and roof sheets.
The ten out of 40 factories are high scale manufacturers but some of them have been forced to stop production due to contraband and lack of hard currency, according to the sector leader.
“If there is an enabling environment the local sheet metal industry that has an annual production capacity of 1.2 million tons shall cover the local market fully,” Solomon added. He claimed that currently imports on things like rebar dominate the market.
He said that even though it is big issue it does not get the attention it deserves.
Contraband, mainly on the 35 gauge, is a major problem for sheet metal. He explained that currently the country’s standard on the roof sheet zinc coat is 180 grams/square meter but it is not applicable at that level. This has created the gap and encourages importers to import the product pretending it is for another purpose when it is really for the roof sheet market.
“The inviting environment has to be solved and he said his association has tabled our idea to the relevant government body regarding the standard issue to look into their law,” he added.
At the discussion several business actors complained about lack of the government intervention. “We are discussed the problems in several occasion and now frustrated. Now we want the way how we shall solve the problems than expressed our claim on problems,” one of the participants said.
Others in the sheet metal industry also complained that the government totally discourages local investors in relation to accessing hard currency to import inputs and capital goods.
“We expected the government to change the suppliers’ credit law but in reality NBE has recently added another new directive that only allows foreign investors besides exporters to access foreign currency in a long term loan settlement, ‘external loan’, to import capital goods,” the other frustrated sheet metal manufacturer said.
In his presentation Solomon mentioned that the suppliers’ credit directive is biased and only favors foreign investors even though they are producing similar products as local investors.
Representative of NBE who attended the meeting argued that the directive is not biased. “Almost all participants at the discussion stated the directives are one sided but these directives are not biased at least both the export sector and FDI directly or indirectly generate foreign currency for the country,” the NBE representative ridiculed the claim from the association and manufacturers.
In his response Solomon said that the NBE representative did not get the claim properly. Including the FDI for suppliers’ credit scheme on a single foreign capital transfer is unfair, according to Solomon.
Capital tried to get further explanation from NBE representatives. But he stated that he represents his bosses. “I don’t have detailed knowledge about the directives,” he told Capital.
Solomon told Capital that he understand that the NBE representative does not have adequate understanding about the directives. “The discrimination value of the directives is not our issue since it is clear. We want to talk about the damage created by the local investors,” he added.
Solomon appreciated the Ministry of Revenue for coming but had hoped other government agencies would have shown up.
Ethiopian Media Council secures license after long wait
A letter written by the Agency for Civil Society Organizations issued this week says the media council can finally begin its work after three and half years of establishment. The first establishment conference was hosted by the United Nations on 12th January 2016 at the UN Conference Center.
The letter was issued and signed by Misrak Bezabh, Team Leader for Registration and Licensing of the Agency on June 25 stated that as per the Civic Society Organizations Proclamation no. 1113/2019, article 57 (1) the Media Council has obtained its license.
In its statement the Media Council recalled that for the past 42 months since its first general assembly the council was going through the process of obtaining the certificate from the government besides establishing the administration of the council.
During the council’s founding meeting, 19 founding members have signed on to the membership, now the members have increased to 29 which include public and private media outlets.
The council stated that it would work to improve media and follow media outlets to serve the public properly.
“Besides providing capacity building for journalists to keep the sector ethics, we will officially work to protect the sector from government intervention in press freedom,” the statement added.
Police get better radios
The Federal Police Commission replaced its analog system and is now using a new digital land mobile radio installed by Motorola Solutions.
The deployed ASTRO25 secure land mobile system covers Addis Ababa, making the federal police communication system more reliable.
The new digital system utilizes four installed microwaves in four areas of the city, can currently work within a radius of 100km but potentially it can work up to 800 km. The radios also have a long battery life.
The commission also plans to use the radios for text and video communications.
“We have to do our work with a better system, it can enable us to communicate with police staff more efficiently. Critical communication is a core component of police work,’’ said Commissioner Endsashew Tassew. Understanding the importance of a truly reliable and secure communications system led us to partner with Motorola Solutions.
Yuval Hanan, Esat Africa Region Manager for Motorala said; “We are proud to partner with the commission in their adoption of advanced digital secure mission critical to communication technology and this system allow interoperability with additional public safety.’’
Globally, the Land Mobile Radio (LMR) Market is expected to have significant growth over the forecast period. Emergence of push-to-talk over cellular systems and increasing demand for public security equipment are expected to be driving factors for the development of Land Mobile Radio Market over the next few years.
The Land Mobile Radio market is differentiated by type, technology, frequency, and end-users.
Motorola Solutions, Inc., JVCKenwood Corporation, Harris Corporation, Thales Group, and Hytera Communications Corporation Limited are the major five players operating in the global land mobile radio system market. Motorola Solutions, Inc. held the largest share among top five players with a share of 38.73%, in 2017, followed by JVCKenwood Corporation and Harris Corporation with respective shares of 12.17% and 10.65%.
Motorola Solutions, Inc. is an American data communications and telecommunications equipment provider that succeeded Motorola, Inc., following the spinoff of the mobile phone division into Motorola Mobility in 2011.
Light railway tariff to be uniform
The Addis Ababa Light Rail Transit (AALRT) plans to implement a uniform ticket price in August which the corporation believes will minimize mischief’s made by passengers.
Manager of AALRT, Muluken Assefa said that the controllers seize many passengers who pays nothing or pays the minimum fee to travel the whole route. The corporation also said that it collected over 800, 000 birr from penalties from those who by pass the law on the train.
The penalties range from 30 birr for paying the least ticket to travel long distance while 100 birr for traveling without having ticket.
The managers are now contemplating to start a flat fare payment system for a journey instead of different rates that was calculated on the distance.
The corporation will now make adjustment on ticket prices which will make the fee uniform for all distance.
Currently, Addis Ababa Light Rail Transit has 41 trams in its system. But only 34 of them are under operation while the remaining seven are out of service.
According to the manager, the difficulty of maintaining the trams locally hinders to make operational the entire tram on the track that have created burden on the quality of service delivery.
Luck of full fledged maintenance center forced the corporation to send few of the trams abroad for maintenance.
According to the ministry of Transport, Addis Ababa LRT is currently transporting at least 120,000 people per day and over 29 million commuters transported over the past nine months in which the corporation collected about 87.2 million birr revenue from the service.
But the total revenue collected from the daily passengers remains insufficient to sustain its activities as well as maintenance related works.
Muluken said on the problems related to repairing the trams and other challenges are hiking the cost of managing the LRT and requested the government to find a way to subsidize Addis Ababa’s light railways.
The Addis Ababa light railway was built by the China Railway Engineering Corporation (CREC) at a cost of USD 475 million, which 85 percent was covered by China’s Export-Import Bank.
