For 20 years around 870 shops located in Merkato and Akaki had been operating informally but now they have finally obtained legal recognition.
The shops, 830 of which are in the Min Alesh Terra neighborhood of Merkato, along with around 40 in Akaki, Wereda 03, had been operating without title deeds or house numbers. However, they finally got a solution to the problem by obtaining legal status under the Keble House Administration.
Because they were not legally recognized the 3-4sqm shops had never paid rental or land tax fees.
Initially MinAlesh Terra was a Merkato dump site but through time people began building mini shops constructed of rod sheets. They would sell pottery, second hand clothes, shoes and metal products. The Addis Ababa Administration conducted a study on the shops and then set a rental fee of up to 15,000 birr per month but allowed the people in possession of the shops at the time of the investigation to rent them.
Million Kassa, Trade License Investigation head at the Trade Bureau told Capital that the shops were being sold from person to person without government supervision.
“When we started our investigation we understood that the people who first occupied the land were not in the shops, either they sold them many years or they were renting them out to others. The big problem concerning the shops was the lack of tittle deeds to renew their license. For a long time, the government tolerated this. We just required the people running the shops to have a proper address and to bring us a legal rental document. Now, however we have resolved everything and the shops are completely owned by the Kebele and have house numbers and rental agreements.’’
According toA Million from the 830 Min Alesh Terra shops 672 of them are obtaining a legal license and the rest are in the process. All of the shops in Akaki shops have completely obtained licenses.
Merkato which occupies MinAlesh Terra also is the largest open air market in Africa, covering several square miles and employing an estimated 13,000 people in 7,100 business entities. The primary merchandise passing through Merkato is locally-grown agricultural products. Prior to the current Merkato, there was an open market place in Addis Ababa near St. George Church at the site where the City Hall stands now, but it ended with the Italian occupation of the 1930s. The occupiers moved the market further west to the area around the premises of Fitawrari Habte Giyorgis Dinagde, which they named Merkato Indigeno. Thus, the present Addis Merkato was founded by the segregationist policies of the Italian occupational government.
Informal Merkato, Akaki shops obtain legal status
City temporarily returns to older ID cards
The City Administration’s Vital Events Registration Agency has reversed course and is allowing city residents to obtain older identity cards.
The plan was for blood type to replace ethnicity in the new finger print cards but software problems and lack of coordination from stakeholders delayed the process.
Before the suspension of the old cards they cost five birr but now they cost 10.
The prices for the cards have risen slightly. Replacing an expired card has gone up from 10 birr to 25 birr. Replacing a lost card has risen from 10 birr to 30 birr.
According to an agency source the new cards are expected to be rolled out soon.
“We were planning to use the finger print technology which automatically printed the ID when someone put their finger on a computer. I believe that in a short period of time we will begin using the new ID.”
Currently the agency has more than 1,700 employees. There is high turnover because of the meager salary.
“New employees start at 2,000 birr per month which is not enough for housing and food so many leave for better opportunities and offices handling vital event registration work are understaffed,” the source said.
Births, deaths, marriages and divorces are recorded at the kebele civil status office and at the federal level, so there is less room for discrepancies and human rights crimes.
Since the enactment of the federal law on vital events registration, the Government of Ethiopia has made progress by establishing the Federal Vital Events Registration Agency, including a board of management and a national council. Government’s regional and city administrations also enacted regional vital events registration laws; established regional agencies and a board of management; adopted a national strategy; achieved national consensus to integrate vital events registration services into the health system and established administrative structures for managing and delivering registration services.
Budding tech startups ask for friendlier policy
In a bid to develop a financial policy which accommodates financial technology (Fin Tech) the Ministry of Innovation and Technology brought together regulators and operators in the industry. Led by Dr. Eng. Getahun Mekuria the meeting clarified the opportunities, challenges and policies that would help innovative technology driven companies reach their full potential in Ethiopia.
Fin Tech describes a variety of financial activities such as money transfers depositing a check with your smartphone, bypassing a bank to apply for a loan or managing investments without a middle person.
Successful Fin Tech companies like Deliver Addis and Apposit talked about what they have been able to accomplish, using the existing legal framework and infrastructure.
Feleg Tsegaye, who founded Deliver Addis, an online food delivery service, mentioned that his company now employs over 400 people and works with 40 restaurants. People can use their mobile app to order food from the menus online and have it delivered to their location.
Established three and a half years ago, the company, now transacts over a million birr per month. When the customer orders food online the motorbike driver takes the order, picks it up and then collects the payment from the customer.
“Since our business is getting busier as the traffic and gas problems push people to order food wherever they are, we are experiencing a payment modality problem,” said Feleg. “We can agree with banks to use the payment but now we don’t want to engage with many institutions. If there is one payment modality online, it will make life even easier. We use our own method to minimize risks with our drivers collecting cash”.
Deliver Addis, did not want to build everything by themselves so round table meetings are critical in order for them to reflect on the real problems they face in the absence of strong Fin Techs.
An example of a platform that Deliver Addis is asking for is Apposit in Nigeria which provides access to digital payments in partnership with Paga Payment. Paga now has more than 11million customers and generates over USD 30 million in income.
Ethiopia’s financial policy has not allowed Fin Techs to grow. However, the National bank of Ethiopia was represented in the meeting to hear the successes and needs of participants it the industry.
The participants asked for the financial regulatory body to allow a virtual wallet. Also the issue of Intellectual Property(IP) for the specific operation is asked for in addition to using an IP to access finance. Most Fin Techs raised the issue that the only property they acquire is the patient over their system and the fact that banks only use physical collateral is discouraging and backward.
Stable policy was seen as a major concern. Three company representatives state that they lose from 1.5 million birr to USD eight million for operation costs. They mentioned that they would begin operating and NBE would find a way to ban their activities.
Investors stated that when they would invest they would attempt to follow proper procedures but then the laws would change. They stated this is why it is leading companies to participate in illegal business after denied the legal one.
“We reached into an agreement with Ethio-telecom be an electronic top-up agent but then NBE sent a two-page letter to the telecom and it just stopped,” said one of the operators. “The Bank sometimes issued circulars which are against the constitution but everyone implements them without questioning.”
Organized information was another major concern. Companies need this to change especially with regard to credits in order for them to be able to operate in the future. The Absence of a National ID and the lack access to criminal, court and other records were things they wished to see improve.
Tech representatives pointed to the aging of policy makers in a youthful country.
“In Ethiopia people over 45 years are about 7 percent of the population and yet the nation’s policy is made by them,” said one of the attendants. “Large scale research on the need and character of the new generation has to be made and young professionals must participate in the policy enactment.”
Government agencies were seen as archaic including the Information Network Security Agency.
Among the participants, many exemplified Apposit to be the second leading payment system overseas.
“The main reason for the financial policy to fail is it is made to benefit one bank that is the Commercial Bank of Ethiopia,” a participant said to many nods in the room.
“The relationship between the two should be neutralized as it is making the economy pay the price,” said another participant.
The dialogue addressed the concerns and frustrations of the financial technology enterprises as government representatives tried to explain shortcomings.
Getahun Nana, former vice-governor of the National Bank said he would take responsibility for past mistakes as he was part of the policy made at the time.
The main role of the bank is to make sure the nation has a stable financial environment and that it is secure from threats. He stated that the nation has moved forward in digital awareness, but has not achieved much. The dialogue is set to continue in order to develop a concrete policy.
Soybean, chickpea trading start at ECX
The Ethiopian Commodity Exchange officially has begun trading soybeans and chickpeas. The occasion was recognized at a ceremony held on Wednesday January 16 at the trading floor located around Mexico Square.
Recently, the trading floor stated that chickpeas and mung beans were arriving at its warehouses so that trading could begin. Soybeans will be traded exclusively, while chickpeas are optional.
Currently, ECX is handling the exclusive trading of coffee sesame seeds and white pea beans at its modern market.
These three products are exclusively traded at ECX, while soybeans would be the fourth product even though mung bean was expected to become the fourth product sold at the trading facility.
Within two weeks the ECX warehouses received close to 20 thousand quintals of soybeans. This is an indication that trading the crop via ECX should be a popular endeavor, according to Wondimagegnehu Negera, CEO of ECX.
In the first four trading days 2,550 quintal of soybeans were traded before the official launching ceremony.
Since December 31, 2018 ECX began receiving the two commodities at nine warehouses in different locations.
The statement ECX sent to Capital indicated that in the past five years the production of chickpeas and soybeans in the country has reached 440 thousand and 76 tons per annum respectively. On average the country exports 54 thousand tons of chickpeas, which is one of the staple food items in the country, and 58 thousand tones of soybeans every year. In the past budget year, the country has earned USD 91 million from exporting the two crops.
The production of soybeans has dramatically increased in the past couple of years. Different surveys indicate that the area covered by the oil bean has increased. Production has risen as well.
A 2014 study undertaken by Mekonnen Hailu and Kaleb Kelemu of the Ethiopian Institute of Agricultural Research found that the total hectare of land under soybean production during the last 10 years (2004-2014) has increased by 10 fold; while the total volume of production during the same period increased by 21 fold.
Experts in the sector recently told Capital that the production for the current harvest is expected to be high since several areas in the western part of the country are currently covered by soybeans. “I have information that in the past rainy season several areas in Welega, Benshangul Gumuz, west Amhara including Metema, which is new to soybean production, have been covered by the oil bean,” an exporter who requested anonymity said.
He supported ECX’s decision to begin trading soybeans. “It would harmonize the price which is different than what we have observed previously,” the exporter who is also a consultant in the oilseeds and pulses sector explained. “During one period last year a quintal of soybeans was 900 birr but the price dramatically increased to 1,700 birr within a month when the number of buyers increased suddenly. The price will stabilize when ECX begins trading as they give a limited percentage up or down floor prices.”
India, Vietnam, China, Canada and Pakistan were the major destinations for the crop during the past export season. Experts at the export sector explained that clients purchasing Ethiopian soybeans particularly in India really like the Ethiopian product due to its multiple varieties and not using GMO as opposed to West African countries. “Buyers in India give from ten to 20 USD more prices per ton for Ethiopian soybeans than other west or southern Africa products even though Ethiopia’s product is very limited,” exporters told Capital.
A year ago Ministry of Trade ordered ECX to undertake the exclusive trading of red kidney bean and mung bean, however it postponed this for an unspecified period because exporters claimed that they needed more time for preparation. Recently the ministry sent a letter to ECX to introduce the exclusive trading for mung bean, which has been optionally traded on the floor during the last five years, as soon as possible.
The CEO has also indicated that in the near future the trading floor will commence optional trading of Niger seeds and beans.
ECX began operation in April 2008.
