Ethiopia Medin’s season long campaign of Premier League promotion came to an end following the 2-1 away defeat to home side Dilla Town last Sunday. Four points and five goals clear of the top table Wolkite Town is already more than half way in to promotion despite two fixtures to go.
Though the two sides face each other on the final week end of the league next Sunday, Wolkite could wrap up things today in an away match against humble side Negele Town. A draw is more than enough for the former Defense Force and Ethiopian national team defender turned Coach Dereje Belay to share a place in Ethiopian Football history book as the second Coach to help promote three Super League sides next to Mekonen W/ Yohannes.
Fourteen wins, three draws and three defeats Wolkite is in control of the Super League group (B) table with 45 points and five goals thus as good as declaring champion of the group and securing a place at next year top tier. Sacked from Medin mid-season last year, it appears the right time for a cold revenge for Dereje who previously led Sebeta Town and Jimma AbuBuna in to the Premier League. “We are going to finish business against Negele today then ready for a historic win in front of our home supporters against Medin in the group closing match next Sunday” a senior committee member remarked.
What is remarkable about the promotion is Medin’s failure despite commanding a superior annual budget nearly triple of that of Wolkite.
Dereje Belay pipes Wolkite to Premier League
Will Addis Ababa teams go their separate ways?
Government institution sponsored teams getting frustrated for failing to compete on equal footing against regional clubs and visiting regional teams are becoming a theatre of harassments. Now, Addis Ababa clubs are said to be plotting to walk out of the Ethiopian Premier League at the end of the current season; considered by many the worst of all times. The Addis Ababa Football federation has 22 teams under its jurisdiction.
The recent development surrounding the sport has become so frustrating that twenty-two football clubs from the Capital are rumored to force the federation for a major platform change of the competition. Showing a strong solidarity behind popular side Ethiopia Coffee, many of the clubs from the Capital are said to be fed up with maltreatment from Ethiopian Football Federation currently led by former Jimma AbaJifar President turned EFF President Issayas Jirra and former Dedebit President currently EFF Vice Colonel Awol Aburakim. According to unconfirmed sources forming a new league format is the hot issue among Addis Ababa clubs that have number of grievances on how the governing body is running the show. Therefore Addis Ababa is said in support of the demand for a change at least until the current ethnic based turmoil ends. “Half of the annual budget is properly spent directly to the sport. The rest goes for unnecessary logistical expenses, per diems and unaccounted expenditures. Therefore it is time to check the situation,” a seasoned football fan suggested. “Sport for ones’ country is meant a tool for peace, love and stability. But these days in Ethiopian context it is totally different therefore we need some time to come to our senses,” he added.
Represented by more than seven teams at the start of the new format, Ethiopia Coffee, Saint George and Mekelakya (only three out of sixteen clubs) are surviving at the Premier League while the likes of Ethio-Electric, Ethiopia Medin are struggling with the almost impossible undertaking of promotion from Super League. Ethiopia NegedBank and Nyala are teams that got lost in the past few years. Many believe it is the result of the new format that turned everything in to a political arena.
With all that in mind Addis Ababa Football Federation appeared to come in to its sense taking a major step in backing popular side Ethiopia Coffee in its firm stand never to play behind closed gates in the match against visitors Mekele Town. Though peace brokers are busy for a face saving settlement for the federation, the damage has already done with Addis Ababa teams forging a strong solidarity that could rock the federation from the foundation.
MoTI sides with local investors against supplier’s credit
The Ministry of Trade and Industry (MoTI) is denouncing the National Bank of Ethiopia’s (NBE) ‘External Loan and Supplier’s Credit Directives FXD/47/ 2017’ that gives the right to foreign investors to access foreign loans at the cost of local industries. The scheme has also been criticized for its vulnerability to corruption because approval is based on a one to one scheme.
Since last budget year the central bank has amended the directive issued in 2002 to allow FDIs to access foreign currency on the scheme of supplier’s credit in addition to traditional businesses that generated hard currency including exporters. Local manufacturers were neglected even though they may have engaged in similar investments.
The supplier’s credit scheme has given extraordinary rights to foreign investors asking for hard currency to import inputs, machines or spare parts without any precognition imposed by the regulatory body on forex.
This scheme has disappointed local investors because they claim that they are discriminated against by a single directive of NBE. The directive they call ‘apartheid law’ is pushing local investors to leave the business and sell off to foreigners.
The case has been one of the major controversial agendas in the economy since the amendment of the directive, while the central bank has stood its ground.
During the latest meeting held on June 6 at Capital Hotel and Spa between the local manufacturers and officials of MoTI the issue was hotly debated.
Fetlework Gebregziabher, Minister of MoTI, told Capital that the local industries would not be excluded from such kind of scheme without a concrete reason.
“Based on our stand we are not accepting that the supplier’s credit scheme only serves the foreign investors,” she says “the central bank should change its approach and include all actors.”
“If there are conditions that should be changed or arranged it has to be done and include the local manufacturers to access hard currency in similar manner like the FDIs,” Fetlework told Capital.
She said that the suspect on misdemeanor should be the responsibility of NBE. “The central bank is the responsible body to answer on the claim of corruption on the approving process of the supplier’s credit for each requests,” Fetlework added.
Individuals who closely follow the sector but declined to be mentioned due to the sensitivity of the case claimed that the method for approving the supplier’s credit is not clear and vulnerable to corruption. They claimed that they suspect that every approval may have a link of illegality. Sources said that the issue has been addressed by local investors to relevant bodies including Fetlework.
The supplier’s credit approval processes is undertaken on s one to one approach from companies and a representative of NBE, according to experts who know the scheme. Capital tried to talk Yinager Dessie, Governor of NBE about the case via phone but it was unfruitful.
Local investors say they are engaged in the same business as foreign companies, they are supposed to wait for the letter of credit (LC) for their foreign currency demand to import raw material or spare parts.
The amount of LC after very long wait is also unsatisfactory compared with the production capacity of industries that they claimed push the production cost very high and make it uncompetitive compared with similar industries unless they are FDIs.
They claimed that some of the manufacturers have closed their business and others reduced the number of workers due to this uncompetitive condition and lack of inputs for their production.
The sector actors frequently claimed that the NBE directive is issued against the investment proclamation, which was amended in 2012. The investment proclamation no. 769 defined the work ‘investor’ as both domestic and foreign, and article 36 of the same proclamation stated that ‘an investor who acquires an external loan shall have such loan registered with the National Bank of Ethiopia in accordance with the directive of the bank. “Both articles of the investment proclamation did not classify local and foreign investors,” they told the government.
They also stated that the Investment Commission has a stand that the investors local or international ones should be treated the same.
NBE amended the 2002 ‘External Loan and Suppliers’ Credit Directive’ in September 2017. The amended directive added an article that allows foreign investors to access suppliers’ credit.
Those who have the right to use the supplier’s credit scheme will be able to get foreign currency right away when they go to banks, while others including local investors, which are invested in s similar sector as foreigners, are expected to wait the line at the banks to get foreign currency on letter of credit (LC) scheme.
Some of them argue that the government has a policy to encourage FDI that they supported but argue that the law should give equal space to all investments.
Financial experts recently told Capital that the supplier’s credit scheme not only affects local investors but the financial institutions themselves because there is a default risk from their clients.
Bankers say getting the letter of credit up front breaches the first come first serve directive of National Bank of Ethiopia. One of the prominent private bank presidents, who requested anonymity, told Capital that initially the notion of the supplier’s credit indirectly forced the banks which applied without the consultation to settle the payment by the maturity date. “It has forced the banks to face a default risk which affects the country,” he said.
“When the banks secure hard currency they focus on settling the credit rather than approving the LC for its other clients who are not included on the supplier’s credit scheme, which is also another effect on local investors,” bankers said.
Recently the government stated that in the past three quarters of the budget year the government allocated USD 6 billion for the private sector. However local manufacturers argued that from the stated amount the local investors may access only six percent or USD 300 million that the USD 200 million recently released by Commercial Bank of Ethiopia and USD 100 million via private banks for the first time.
Nile staff under fire for fake insurance claim
Seven employees of Nile Insurance Company’s head office are being investigated by the Nifas Silke Lafto Sub- City Police after 47,000 birr went missing from their Abyssinia Bank account in an attempt to forge claim payments.
There are five male and two female suspects. Two resigned after the incident which occurred two months ago, according to the company.
According to the police report, someone filed a false claim saying a car which was covered by Nile through third party insurance was involved in an accident near Wolisso town and a payment was made as a result. However when the company investigated the claim, they discovered that the car had not been in an accident and that the letter and ID used to withdraw the money was fake.
Benalf Mekonen, Resource Management Head at Nile Insurance told Capital that they are auditing all claims made in the past year.
“We are shocked by the news because we are a leading company in the private insurance business in Ethiopia. Normally claims under 50,000 birr are handled by the lower management. In this case we asked the insured party if their car had been in an accident and if they had filed a claim and they had no idea what we were talking about. So we became suspicious about our staff and police are investigating.”
“We are also dedicating a department to investigate all claims in the last year” he added.
Capital asked Hadush Hintsay, Secretary General of the Ethiopian Insurance Association about the incident. “I can’t comment on this news but the entire financial industry needs to work together to fight fraud.”
Nile was established on April, 1995 with a capital of birr 12.5 million. Over the past years, the company has grown from birr 12.5 million to 302 million birr capital, from 26 to 124 shareholders, from 4 to 42 branches both in the capital and regional cities and has more than 45,000 customers across the country. The total asset of the company has reached birr 734 million.
