The Ministry of Trade and Industry (MoTI) announced that it would review the licensing for exports to tackle illegal activity and establish a harmonized export business, in addition to stopping unethical people from abusing the sector.
Misganu Arega (Amb), State Minister of MoTI, told Capital that the ministry will establish criteria for giving export licenses. “We have to review our way of giving licenses to exporters,” he added.
In the past the government claimed that the number of exporters was growing, but export earnings failed to grow significantly. The government says that some unethical people have become exporters with the intention of selling products below invoice to get foreign currency and then turn around and purchase items to import into the country in order to earn huge profits.
For instance, the number of agricultural exporters in the past budget year has grown from 546 to 9,396, but export revenue went down.
“One of the actions we will be reviewing is the licensing process. We will work with those who are mainly engaged in the export business and are not subsidizing another business,” he said.
“The traditional exporters working with established international brands who were employing people are leaving the profession because of these unethical practices so we will work to put a stop to this,” Misganu explained.
Recently MoTI accused exporters of escalating the price of export commodities at the Ethiopian Commodity Exchange (ECX) while others were buying crops outside of ECX, which is illegal.
Even though products like sesame seeds are sold for a high price at ECX people were selling the commodity at a lower price than the trading floor rate which MoTI claimed was under invoiced.
They also cautioned sesame seed and white pea bean exporters that they would prosecute them, while other ethical exporters complained that the government was not taking action. Misganu told Capital that his office is working prudently to take measures.
“We have secured relevant documents from Ministry of Revenue and the National Bank of Ethiopia to identify the contract, export volume and revenue of the exporters in the first three months of the budget year and then during the next three months as well,” Misganu explained.
“Regarding viewing the document we have identified those engaged in illegal activity,” he added.
“We want an ethical exporting regime so this has been affected by some illegal and irregular activities. We are cautious not to affect the country’s hard currency revenue. As a result, we are working carefully to undertake actions that are sustainable,” he explained.
“We never ignore prosecuting illegal actions,” he strongly stated.
“It may take some time since we are highly prudently but since we have been working on it the price has gone down at ECX and the export trend in terms of price is now improving,” he concluded.
MoTI to review licensing process for exporters
Mandatory national service makes sense now
What is patriotism? To me, it is a genuine love for, caring, and understanding of country, and a willingness to sacrifice for, be appreciative of, and thankful for our nation and fellow citizens.
Patriotism is not wrapping oneself in a flag, nor walking around with a gun or a blade, but being responsible for your family, your community and nation, in short, helping your country do better.
As Ethiopia faces a growing ethnic divide, political and economic split, we need to find ways to inspire our young people to realize social acceptance, ethnic tolerance, conciliation, cultural appreciation and cultural adaptation through some sort of national service, if not in the military, then in a national volunteer organization to provide services to poor people, the elderly and disaster victims.
Of course, young Ethiopians themselves would also benefit from such national service. How then does a democracy cultivate civic responsibility and shared identity? With taxes governments can fund common purposes, but it does not provide common experiences. A practice in which young people rich and poor, men and women, of every ethnic background work side by side to address public problems would create, at least, a vivid, lifelong memory of shared national purpose.
Now, we shouldn’t introduce a national service just because it’s a ‘nice’ thing to do, but rather because it can be a means to strengthen the ties that bind us as a nation; and because it can create bridges across groups in our society that have little to do with each other on any given day, and because it can be a pathway to a stronger sense of citizenship. Plus, the idea of introducing a national service will not only help the country how to solve public problems but also appreciate what we owe our country and each other. In fact it may provide the common ground that seems to have gone missing in Ethiopia for some time now.
Meanwhile, with economic times tough, especially among the young, the idea of a national service can be very attractive. There are a lot of kids who would join in to work on a program, say, of Greening Ethiopia. The fundamental evidence for national service is built on cost-benefit analysis, and studies show that the economic value of national service far exceeds its costs. This conclusion is valid for participants, for taxpayers, and for society at large.
I believe this is an idea worth exploring which can contribute to furthering our nation’s and our young people’s interests.
Call for Mandatory National Service NOW!
By Kebour Ghenna
Rent is too high, FCH tenants argue
The Federal Housing Corporation recently changed their rental prices, setting a floor of 509 birr per square meter at the shops and offices it rents.
Now tenants are asking the Corporation to revise its prices and lower the rent to 71.50 birr per square meter.
Tenants made this argument at the meeting last Wednesday at Global Hotel. They pointed to an eight year old study conducted by the Corporation.
They argued that the Corporation is not taking into account a realistic view of the economy and market. 
A woman who came from US doing business with her father in Piassa said she will shut her shops if the Corporation does not revise the new price.
“They asked us to pay 70,000 birr per month but we can’t make a profit at this price, for me it is not a problem. I can return to the US to work but what about the 43 workers who have built their lives on our company’s work,” she said.
Other tenants said the corporation’s new price will aggravate rental prices of private shops across the city.
“After setting the new price some private shops in the city have started increasing rental prices which will ultimately hurt consumer’s pockets. The corporation should have looked at the impact of the new prices before they set them,” a young tenant said at the meeting
Abrham Arega who is the member of the tenants’ committee said the corporation set different prices on the same offices in a building which demonstrates that the price increases were not properly studied.
Under the new revision 477 shops are set to pay 1,000 birr per month, 3,078 shops between 1,000 up to 2,000 birr, 447 shops between 20,000 to 30,000, three shops from 200,000 up to 300,000 birr and two buildings will pay 400,000 birr per month.
The corporation did not make any price revision for business shops in the last 40 years.
Before the new revision 3,880 of the shops were paying 65 birr per square meter and 2,052 shops were paying below 10 birr for a square meter. Surprisingly the rental fee of another 279 shops was below one birr per square meter.
The Corporation recently announced that instead of applying their new rental prices at all at once, tenants will pay 35 percent of the new prices the first year, the second year they will pay 70 percent and the third year they will pay the full revised price.
Major tax conference not attended by govt
The organizers of the high level conference on taxation issues are disappointed by the absence of relevant government representatives in what is a priority agenda for the country.
The conference with the title: ‘challenges and solutions of taxation for promoting business related investment and four national building in Ethiopia: politics, law and practices’ held on Friday January 25 at Sapphire Addis Hotel organized by Afro-Global Consultancy Services (AGS), a recently formed organization to work on tax, finance and related issues, in collaboration with public and private organizations including the International Bureau of Fiscal Documentation (IBFD), based in Amsterdam.
During the full day event several papers focused on laws and policies of the taxation system, macro economics, fiscal, monetary policy, and identifying and tackling challenges that the country faces regarding taxes. It also featured inclusive panel discussions.
Even though the high level event attracted several participants the organizers expressed their disappointment because of the absence of several top government officials.
Fisseha-Tsion Menghistu (Prof), President and CEO of AGS, said that the expected individuals did not appear at the event, but the event is crucial and timely for the country.
Fisseha-Tsion, who has a half a century of experience in tax, investment and finance, said that the government should consider these kinds of issues to be a priority;
“I don’t want to accuse them for now but they need to give attention and support the sector for the future,” he told Capital.
“The government needs to consult from Ethiopian scholars with wide expertise, who are independent and working for their country. The government is expected to work closely with us,” he claimed.
He complained that the top officials at the government apparatuses do not know their future agenda. “Some of them were willing to participate at our event but they have gone on other sudden meetings,” he added.
“The meeting that the Prime Minister strongly stated does not interfere with relevant day to day office work is not respected,” he criticized.
The conference mainly targeted to strengthen the effort and campaign of the Ministry of Finance and Ministry of Revenue to expand the tax collection.
During the last decade the country has registered double digit growth, but the tax to GDP ratio is still very low.
“The conference targets to discuss and analyze if tax collection challenges are related with political, policy, administration, law or implementation,” the founder of AGC said.
“The aim of our consultancy firm is to give more support and to render high quality professional services to the government, the business communities, the NGOs; finance and development institutions as well as to the general public,” the founder said. AGS has ten PhD level highly experienced professionals on micro economic policy, good governance, corporate responsibility, finance and other sectors.
“We organized this event not for profit, but with a goal of contributing to our country,” Fisseha-Tsion said.
“We did not get financial support from the government to host this event, which is supposed to be the responsibility of the government,” he added.
The country has a goal of expanding the tax to GDP ratio to reach 17 percent by the end of the coming fiscal year, while the actual achievement is very poor.
Figures indicated that the country’s tax GDP ratio is lower than other regional countries and stands at about 12 percent and went down to 10.7 percent in the past year compared with the preceding year, which was below 13 percent.
The paper was presented on the day by Dr. Lemma Gudissa stated that the reduction may be related with poor collection, updating the tax policy or the private sector.
“Comparing to inflation the tax collection growth rate it is negative,” Lemma said.
