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!!
It looks like sell or die
Unrest closes Hawassa Industrial-Park
Following threats to declare a new region by the Sidama ethnic group, business was not going on as usual in Hawassa and other surrounding towns including Ethiopia’s flagship Hawassa Industrial Park where employees were absent for days, Capital learned.
As youth and activists of the Sidama ethnic group announced they would declare independent regional states on the 18th of July, the park stopped operating for three consecutive days starting from Thursday July 18.
There was a sign when the majority of the employees at the industrial park wore a t-Shirt with the flag of the new region on July 17. 
In a country like Ethiopia where employment is above 10 million, and there is a huge demand for job opportunities, it is unprofessional to call a demonstration on working days, the Prime Minister said. He used the example of neighboring Kenya’s working discipline as exemplary pointing out that they call any strike or demonstration over the weekend.
When some political cases arise in the city, it will interrupt the investment climate. The odd thing is, workers asked to be paid for the days they did not show up. Now companies will be in trouble with their customers for late deliveries. This has a domino effect, the Prime Minister pointed out.
He criticized the bad habit of Ethiopian employees accustomed to taking a salary for absent days. Their entitlement is unethical and should be corrected, said the Prime Minister.
The government spent a huge amount of money to build the park, not only that, other investments like the toll roads to connect to the park and the money spent on supplying power will be wasted if people don’t change their behavior, the Prime Minister said.
Ethiopia is investing billions of dollars to open a total of 30 industrial parks by 2025 with the vision to become Africa’s manufacturing hub and create more jobs for the youth and earn hard currency.
As Capital confirmed, one of the operators, things went back to the normal conditions after Tuesday this week where 80 percent of the employees are back on track.
“Being an area of conducive investment climate is essential for employment opportunities and the communities should protect the investment if they need jobs for their youth,” PM Abiy added.
Hawassa Industrial Park is the largest government industrial park, built at a cost of 250 million USD in just nine months by the Chinese Civil Engineering Construction Corporation (CCECC) and presently hosts more than fifty manufacturing companies that employs 25,000 workers.
Meds for poor smuggled to private pharmacies
Officials from the Food, Medicine and Health Care Administration and Authority (FMHACA), says medicines for serious illnesses like malaria are being stolen from pharmacies at government hospitals and sold for three times the original amount in private pharmacies.
According to sources, private pharmacies are illegally selling government subsidized pharmaceutical drugs meant to be provided for free to patients at government hospitals. The source added that subsidized medicine sold for a low price in government pharmacies is being smuggled to private pharmacies.
“After the Ethiopian Pharmaceuticals Supply Agency (EPSA) gives the drugs to the government pharmacies there is not a reliable method to check and make sure the drugs are getting to the patients at those hospitals. Instead brokers at government pharmacies illegally sell the drugs to private pharmacies.’’
Heran Gerba, Director of FMHACA told Capital that the hospitals need to work harder to stop illegal medicine sales. Regulations are not being enforced, there is little inter-agency cooperation among law enforcement the border control is porous.
“Sometimes these drugs are only available at private pharmacies. Our job is to check the quality and effectiveness of the drugs not to check whether hospitals are selling them to the right people. This is up to the hospital administrations. Pharmacies are audited and an electronic system helps guard against misconduct. Every administration and region should follow up with the hospitals and use this system.”
Proclamation 661/2009 says people or institutions can not work in the pharmaceutical business, unless they are authorized or licensed. Trading medicine without a certificate of competence can lead to 5 to 7 years in prison and 100,000 to 150,000 birr fine. Yet, people still sell and import drugs without a license. Often this is accomplished by bribing inspectors, customs agents or medical regulatory bodies.
36.3 billion birr in revenue
The state-owned Ethio Telecom, a potential candidate for privatisation, generated 36.3 billion birr in revenue during the last fiscal year, a 7 percent rise from the previous year.
Multinational firms are eyeing a slice of the telecom provider after the government announced to liberalise the telecommunications sector, opening up one of Africa’s last remaining state-controlled telecoms markets.
France’s Orange, MTN of South Africa, Britain’s Vodafone Group, the UAE’s Etisalat and Zain of Kuwait are among the companies that have expressed an interest in the firm.
