The Addis Ababa Housing Development & Administration Agency (AAHDAA), which is responsible for transferring homes to lottery winners, started signing contractual agreements last Tuesday for the 40/60 condos drawn in the recent lottery, Capital learned.
Along with AAHDAA, the Commercial Bank of Ethiopia has also started loan contractual agreements at their one window system service located around Megenagna.
The contractual agreement which is valid for the next 60 days will deliver 17,000 houses to their owners after they are finished in around a year.
Once people win the lottery, they go to Megenagna to sign the agreement. They must bring a copy of their savings account book for the condo, their first agreement, photos, and ID card and a certified paper saying no house is registered in their name.
In the previous condo lottery draw the houses were put in to the agreement after it was published on Addis Lisan, the Addis Ababa City Government newspaper. But the recent contractual agreement is being carried out with no publication on the newspaper for the winners in.
But the people who are registered in this scheme and saved the full money of the houses are throwing critics on AAHDAA for starting contractual agreement when some issues are still unresolved in the court.
“In the previous condo draw the people who saved the full money for the house were told that they will get a priority to win the lottery and get the houses but contrary to this procedure the agency included the people in the recent lottery who have not saved the full money and we brought the case to court and more than 2,000 houses are blocked and some other people are on the way to open file to block the houses and the agency made a mistake while the issue is still in court.’’
“As a government when something is given to somebody there must be clear environment that is not disturbing it. In case of 40/60 there is great opposition among the full amount saver but the agency is transferring it. This is by passing the law,” said some of those who paid the full amount to get the houses.
Capital asked AAHDAA why the agency has started the contractual agreement when the case is still pending at court. The agency replied that the blocked houses are just not more than 300 and the agency have a reserved house if the people who sued get verdict to get house.
Capital also asked why the agency did not start the 20/80 condo houses contractual agreement for the 37,000 houses that is drawn in this Ethiopian year.
The agency replied that there are some administrative issues that need to be resolved before the contractual agreements begin.
Currently 100,000 condo houses are being built around the disputed Koye Feteche sites and 20,000 houses of 40/60 around Bole Hayat and Bole Arabssa but over 820,000 people are waiting for homes under both plans.
Agency starts signing agreement for 40/60 condos
Twenty exporters face severe consequences
The Ministry of Trade and Industry (MoTI) warn 20 high level exporters including prominent actors saying that they will take legal action unless they cease their illegal export behavior immediately, Capital has learned.
In a letter signed by Misganu Arega (Amb), State Minister of MoTI, and copied to the Minister of MoTI, Ministry of Revenue, Office of the Attorney General and Ethiopian Commodity Exchange Authority the state minister accused exporters of selling under the price they bought at the trading floor at Ethiopian Commodity Exchange (ECX). The letter that Capital reviewed stated that one company exported sesame seeds under the price it bought at ECX and goes on to warn the exporter to normalize the business.
In the past the government claimed that the number of exporters was growing, but export earnings failed to grow. For instance, the number of agricultural exporters in the past budget year has grown but export revenue went down.
The government says that some unethical business people have become exporters with the intention of selling products below its actual price to get foreign currency and then turn around and purchase items to import into the country in order to earn huge profits.
Recently the price of some commodities mainly sesame seeds and soya bean, which joined the ECX trading floor at the beginning of the year, has hiked significantly due to buyers, most of which are also importers, buy products at a loss and export it to get foreign currency to import other items.
For instance at the beginning of May during trading at ECX, sesame seeds maxed out at over 7,120 birr per quintal for Humera Type, which had been trading at 6,600 birr on April 30.
Experienced and long established exporters expressed their anger and say that the government must take action to avoid a disaster waiting to happen.
In its letter the ministry recalled many previous discussions with relevant actors in November last year about the issue and need for correction. The ministry also mentioned that 100 exporters are engaged in illegal acts and that it would review their business license and activity if they continue in this way. At the time Misganu told Capital that his office is working prudently to take measures.
“If the system stabilizes we will be competing at the trading floor based on the international market instead of the artificial one created by actors who target only foreign currency instead of profit from export only. And every actor must activate properly,” exporters who have been affected by illegal trading told Capital.
“The traditional exporters working with established international brands who were employing people are leaving the business because of these unethical practices, so we will work to put a stop to this,” Misganu told Capital.
Exporters are recommending the government through the National Bank of Ethiopia (NBE) to follow the import activity instead of leaving it to commercial banks.
“The import sector is the major reason for the current mess in the export industry,” an exporter said.
Currently, importers only process their import activities at any commercial banks but if the central bank forms a department or facility to centralize the pro-forma invoice registration and follow the import sector easily it could help.
“If this system shall be applied it will tackle the multiple registration process by a single person in different banks and even give quotas for banks based on their foreign currency reserve instead of the current long lines to access the letter of credit (LC),” actors in the export/import business said.
“This system may cut unnecessary manipulation on the export market and create equal and fair access for LC operation,” they explained.
Forex available for loan to foreign investors as local businesses cry foul
The National Bank of Ethiopia (NBE) issued another controversial directive that would allow foreign investors to access foreign currency on credit for importing capital goods, again frustrating local investors. The ‘Directive for Regulation of External Loan in Kind No. FXD /61/2019, which was issued last week and signed by Tebebe Hailegiorgis, Deputy Director of Foreign Exchange Monitoring and Reserve Management Directorate of NBE, and allowed foreign investors even though they are not exporters to access a long term foreign currency loan to import capital goods.
However the directive has given the green light for exporters regardless of, if they are local or foreign to access similar extraordinary incentives for their business here.
In the past foreign investors were expected to move capital here and use that for their investment, while the current directive has given them the means to access capital locally, according to experts closely following investment.
The directive has been strongly criticized by local investors who claim it goes against the country’s investment law and continues discriminating them.
Finance sector experts say the directive is another pressure for the country’s foreign debt arena. “Currently the country is paying the foreign debt for the unfinished projects like sugar factories and others, while this and the previous directive that is the supplier’s credit directive issued in September 2017 places the country in a further debt burden,” they argued. “On the supplier’s credit scheme the government gives a guarantee for foreign investors to import raw materials and when the current law is added it supports them in importing capital goods with a payment from a public source,” they added.
“In short the central bank said it is responsible for foreign companies’ activities and put itself for the commitment of payment via commercial banks of the country. It is also another burden for the country in its limited hard currency reserves or earnings,” they told Capital.
“If the foreign investors are engaged in export businesses even partly it would be ok but the directive gives a right for all foreign investors to access the capital goods loan even they are not contributing to the hard currency earnings,” they finance sector expert explained.
On the other hand local investors that Capital interviewed said that they were expecting a solution from the supplier’s credit directive, but NBE has added another discriminating rule at their cost. “These directives are issued without balance for local investors, who are also engaged in the same investment that foreign investors are engaged,” said the local investors.
The external loan in kind directive article 4 sub article 4.1 stated that an exporter is eligible to acquire capital goods through an external loan in kind arrangement; provided that the capital good is going to be utilized in an export oriented investment that generates foreign currency. This sub article added local investors but exporters allowed accessing the external loan in kind.
The directive sub article 4.2 also stated that a foreign investor is also eligible to use the external loan in kind arrangement to acquire capital goods when it fulfills all requirements for article 4.2.3 of this directive. Article 4.2.3 lists the requirements: an application letter, valid investment or business license, foreign capital registration certificate, the draft loan agreement with detailed terms showing the type of agreement, interest rates and applicable charges, repayment method and schedule, borrower-lender relationship, purpose of the loan and others that NBE may be deemed.
Article 4.2.2 indicated that the debt to equity ratio may not exceed 60:40 of the foreign capital. The directive stated that the NBE shall issue approval letter for external loan in kind if all the requirements are fulfilled.
Bankers and finance experts that Capital spoke stated that the directive puts more pressure like the supplier’s credit directive, on the local private sectors to be competitive in the market and creates big challenges in the settlement of their credit at banks, but the view of Dereje Zebene, President of Zemen Bank, is more than that.
He expressed that the directive would not have any clear price indication for the capital goods. The definition of the directive for ‘capital goods’ only stated as ‘any equipment or machine that may be used to produce products or to provide services and includes accessories. “The definition did not mention about the price of the goods or accessories. This makes the directive vague and easy to be abused by investors, who may under or over invoice to import goods,” Dereje said.
He added that it is not clear if machines have to be new or used. “It requires a clear arrangement regarding to these two points otherwise the directive shall be misused by illegal actors and put the country in a burden,” the banker told Capital.
Some of the investors may import refurbished equipment or accessories previously used in other places but call them new, so this must be reevaluated, according to Dereje “and the central bank should have specific price rate for every good.”
However he stated that the directive may improve investment but would affect locally based investors.
The all in cost ceilings for external loans shall be on within three different maturity periods and six month LIBOR (London Interbank Offered Rate) or equivalent EURIBOR (Euro Interbank Offer Rate) plus 2, 3 or 5 percent interest rates based on the period that are up to 3 years, from 3 to five years and more than five years.
LIBOR and EURIBOR are benchmark interest rates at which major global banks lend to one another in the international interbank market for loans.
Some government officials like Fetlework Gebregziabher, Minister of Trade and Industry, criticized the supplier’s credit directive saying that it should include local investors.
DEVALORIZING POLITICOS
The complexity of modernity has systemically undermined the importance of an individual politico, at least in the realm of national politics. Nonetheless, the old institutions of governance and their staunch supporters still want to retain the archaic and absolutely nonsensical notion of leadership by a strong wo(man). To start with, the human individual is a very delicate creature, i.e., is susceptible to all kinds of afflictions, including diseases of the mind. By and large, the typical politico seeking the highest offices tends to be egoistic psychopath, with a very low level of integrity. To let such weaklings loose on society is not an advisable proposition, but that is exactly what is happening all over the world. The one-man show came into being when human societies only had rudimentary functions, institutions and objectives. In those days modern medicine was also not advanced enough to vet psychologically ill equipped individuals for high offices!
‘Ponerology’, the study of evil, is now shading light as to why collective existence should not rely on some megalomaniac to head major institutions/activities. Checks and balances as outlined in the constitutions of countries have become painfully outdated. Various technics in social organizations have gradually diluted individual responsibilities. Important decisions are streamlined so that numbed bureaucracy can deal with them mechanically. By only twitching the bureaucratic processes, major decisions like wars can be declared in a number of countries. So much for checks and balances! In late modernity, idiocracy is the rule of the game and the essence of good governance is completely undermined by the likes of the ‘deep state’. Again our definition of the deep state: the deep state is the military-intelligence-industrial-banking-media-complex of the advanced industrial countries. In such a highly organized manipulative environment of political contestation, to think that an individual can single handedly win elections and run countries is at best ludicrous. A single individual cannot (on her own) beneficially manage the affairs of societies comprising millions, sometimes billions of people. Besides being unrealistic, the whole cockamamie scheme costs millions/billions, to say nothing about the waste of precious time. Why does the highly rational system of global production/distribution still swears by this old system? The answer is quite obvious to the perceptive. It is to hoodwink the sheeple (human mass) into thinking that the whole exercise is the epitome of democracy and serves the sheeple’s interests better than any other. We say baloney!
This whole thing is intentionally encouraged so that those who control the global phony money can control politics! Clowns running around the whole country, spending money and making fools of themselves (sorry for the redundancy) is a sight that is becoming appallingly stupid! Secretary of State of the US openly remarked that he wants to ‘push back’ against Jeremy Corbyn, the leader of the UK Labor Party! The secretary’s remark is to ‘push back’ against Corbyn the individual, and not directly the Labor Party. If that is the intention, then the utterance is more sinister and can be construed as a bona fide interference/meddling in the affair of a sovereign nation. Why should the UK’s conservative party, which has only 100, 000 members decide on behalf of over sixty million people? In the UK, all the political parties combined have total membership of less than a million. By the same token, only 18% of the US population is represented by the two dominant parties, while the rest, i.e., 82% of the population has to go along with decisions made by the political honchos of these two ideologically identical entities. The priority of these politicos, as was demonstrated repeatedly by various studies, is to make sure corporations get what they want, despite the negative impacts such regulations/laws, etc. have on the unsuspecting sheeple. There is a name for such a system of political governance. The USA, as the former President of the US (Jimmy Carter) put it: is not a democracy but a plutocracy! A government of money, for money and by money, and nothing else! To protect the interest of capital such governments will go to war against everyone everywhere. This includes Mother Nature. After all, what does national interest actually means? Civilized society has to go beyond such stupid and idiotic system of governance. Life is not only money. Nature should be sacrosanct compared to other artifacts. But the current system doesn’t have such sensibilities! It is time humanity starts dismantling the greed system in its totality. This system is bent on destroying life and all the life support system of the planet. This has been proven time and again!
Theoretically, the party system is by far better that the so-called the presidential system, but there is a catch. Without genuine verifiable transparency, the party will end up becoming just another tool to satisfy the egos of the cravenly wicked politicos and their paying masters! Because of this obvious shortcoming, many a sheeple think the presidential system is to be preferred. But that is like throwing the baby with the water! In the UK and in many other European countries the dominant parties are being kicked out, because the sheeple is no more interested in palliatives and useless rhetoric. People can also see through the wickedness of the manipulative politicos whose interests are not always in tune with that of the people. Unfortunately, when the party system fails, it is not the task of the individual to save it; but rather the sheeple’s. Widespread civil disobedience, the likes of which is happening in the Sudan, is one proven method of challenging a rotten system. The ‘Yellow Vests’ are experimenting with an illusive strategy that is not only frightening the status quo, but is showing the way forward. Thanks to modern informatics, direct democracy is no more a pipedream. Obviously these developments scare the traditional global politicos. Another shortcoming of a presidential system is; an individual can always be coerced to toe the line by the power that be. One phone call from the deep state and the so-called leader (usually of the periphery) will reverse policy, fire undesirable individuals or even dismiss the whole cabinet, enact laws to undermine the interests of the nation in favor of transnational capital, etc., etc.! That is why the archaic system is very much desired by the paid lackeys and demented goons as well as the extremely gullible component of the global sheeple! See the articles next column, on page 36 & 38.
The sickeningly entrenched global project of commodifying all and sundry is the main source of human alienation. This process robs humanity its very conscience. The senile system (Samir Amin) has lost the capacity to differentiate good from evil and is leading the global sheeple astray. Beware: “a really efficient totalitarian state would be one in which the all-powerful executive of political bosses and their army of managers control a population of slaves who do not have to be coerced, because they love their servitude.” – Aldous Huxley (Brave New World). Good Day!
