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President Isayas Afewerki arrived in Addis Ababa to a cheerful crowd that Addis have never seen in its recent history. Addis Ababans have never lined up on the streets of Addis to greet another head of state but yesterday was another scene. Last week Prime Minister Abiy Ahmed was also greeted in the same manner at Asmara after the two leaders broke the deadlock.

A few weeks ago, Ethiopia and Eritrea were enemies, as they had been for the past two decades, yet now they are behaving as if they are the best of friends.
Thousands turned out in the streets of Addis under tight security to welcome President Isaias Afwerki, whose three-day visit is the latest step in ending a long state of war. “Welcome home President Isaias!!” the Ethiopian prime minister’s chief of staff Fitsum Arega said on Twitter.
Since the 42-year-old Abiy broke the ice last month by fully embracing a peace deal that ended a 1998-2000 border war that killed tens of thousands and left families separated, the two countries established the direct connection of long lost telephone lines and daily flights were said to be resumed next week.
Telephone links have opened, with some Ethiopians calling complete strangers in Eritrea just to say hello, and the first scheduled Ethiopian Airlines flights to Eritrea begin on Wednesday.
A journalist at Eritrea weekly wrote that when he was going to go out of office the telephone rang and have to answer callers from Ethiopia. “The office’s phone rang out of my expectation. I picked the phone to hear a group of people screaming merriments in Amharic. I roughly understood their greetings, but still, replied in my language. We were using the little we know of our respective languages to say peace –selam and love you. And just like me, many more Eritreans have been getting random calls from Ethiopian people and vice-versa.”
A series of diplomatic breakthroughs quickly followed as one of Africa’s longest-running conflicts neared an end.
The international community has embraced the warm reunion as a welcome development in a critical and often unstable region along one of the world’s busiest shipping lanes and across from the Arabian Peninsula.
The old Eritrean embassy in Addis Ababa has undergone a rapid renovation and is expected to open during Isaias’ visit. The two leaders also are expected to attend a concert of about 25,000 people on Sunday featuring local artists.
President Isaias also received a surprise gift of a horse, a shield and a spear from Oromia Regional President Lemma Megerssa during his visit on Saturday at the National Palace.

Cash register paper shortage slows business

Local News

July 16, 2018

The hard currency shortage is now causing a lack of paper for cash register machines. It has been about ten years since the country announced the use of cash register machines at selected businesses, the practice has widely spread throughout different parts of the country and businesses.
According to users that Capital spoke, the absence of the cash register machine paper is affecting their daily business.
One of the sources, a businessman, that Capital interviewed said that he is unable to buy products from the market due to lack of the machine paper.
“For my service business I buy bulk products from Addis and sell in other parts of the country, but in the past few weeks I have been struggling to buy products,” he said.
According to cash register machine law, sellers have to issue a receipt on every sale. If the machine is down or there is a power interruption they can use a manual receipt and inform the relevant tax office.
Experts at the Ethiopian Revenue and Customs Authority (ERCA) said that they have not heard about the paper shortage affecting business.
Ephrem Mekonnen, Public Relations Head of ERCA, told Capital that the business community is trying to connect the issue to the hard currency shortage.
“It is known that the hard currency shortage affects the economic activity, but it is an exaggeration to say the market is being slowed down by a of machine paper,” he added.
Besides the imports local producers are also engaged in the production, while the hard currency shortage may affect the usual supply, he says.
There are importers of the paper, but it is also produced locally by Haron Computer Plc.
Kedir Hashim, Chief Operation Head at Haron, told Capital that his paper factory is also affected by the shortage of raw material which is imported.
“We have tried our best to supply the paper for clients directly as opposed to providing it to distributers,” Kedir said. “We are providing the paper to distributors at the micro level but our priority is direct users to harmonize the market and maintain a reasonable price,” he added.
Haron is also one of the major cash register machine suppliers authorized by ERCA. The company stated that its paper distribution covers wide areas in Oromia and SNNP regions in addition to the capital.
According to Kedir, the Association of Machine and Software Suppliers has tried to work with the authority closely to solve the challenge. He said that ERCA is helping suppliers to get the hard currency from banks, while public banks are not giving priority to them like private banks are. “If we have a support letter from ERCA the private banks are relatively collaborative, which is not the case at public banks,” he said.
He advised that the government should give prior attention for the sector since it is directly related with the government revenue.
As of the first nine months of the past budget year that ended a week ago 172,088 businesses use 188,416 cash register machines throughout the country. Every year the number of users is increasing significantly. For instance, for the first nine months of the stated budget year 9,295 new users were included on the system. Thirteen companies are actively engaged in supplying the machine.

Police investigate 46 million birr soap purchase

Local News

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July 16, 2018

Police are looking into a transaction made between the Ethiopian Industrial Input Development Enterprise (EIIDE) and End Global Food Processing P.L.C. after it received a tip about low quality delivery from a production manager at the latter’s factory.
Police opened the investigation the day after receiving information. They then searched the warehouse where the soap was stored. Police took 40 packet samples from the store and banned the rest which is over 24,000 packs.
Last Thursday police reviewed the situation with the Ethiopian Conformity Assessment Enterprise (ECAE) and opened the warehouse after receiving results from ECAE but still banned the soap from being distributed.
The soap failed to meet grade one standards and the results are being used as evidence for the investigation process, a source close to the case told Capital.
End Global signed an agreement to deliver grade one quality soap to EIIDE after winning the competitive bid at the end of September 2017.
The procurement attracted four detergent production companies. Only three returned the bid document. Among the three EIIDE has chosen two companies to supply the detergent where Toria soap and Detergent Industries failed to supply reasoning the devaluation of birr to be a barrier.
The Enterprise confiscated its 100,000 birr security bond from Toria, and proceeds deals with End Global which was willing to meet its commitment.
End Global promised to deliver the soap within six months starting October 2017, which was later extended to eight months, but they delivered only 17% by May 2018.
The company, established with an investment license nine years to process food, changed its investment to detergent production. Unfortunately it was not able to change its name because of the delay in the government procedure, according to Liyu Yemeshaw, the CEO of the company.
Mesgena Welday, owner of End Global, argues that it is not the first time the soap has failed the quality tests rather it’s its second time. He said the failure in the agreed quality is normal and falling the grade one requirements didn’t mean that its harmful, rather it’s in the permitted range of grade two in the nation.
He said that when the ECAE said it didn’t meet the first grade the soaps were sold in Merkato and replaced with the grade one. “The failure and replacement procedure is normal not only for our delivery but we also saw other companies which were taking out goods which didn’t meet the standards,” he said.
Inderis Negus, the Acting CEO of the EIIDE shares Mesgna’s Idea that returning the products which don’t fit the requirement is normal. “We return many other items not only soap when they fail the requirement,” he told Capital.
He also explains that after the goods are delivered to the warehouse we will wait for the ECAE result to accept the delivery. “Whenever there is a defect in quality we will return the goods back,” Inderis said.
He admits that the company is suffering from the returning defecting products as it consumes extra time but it is our commitment to our customers.
Inderis also argues that the EIIDE goes further to meet the standard expectation of the consumers even beyond what other government organizations want. “This is the main reason why we are suffering from the returning back of goods,” he adds.
The EIIDE emerged after absorbing Merchandise Wholesale Import & Trade Enterprise (MWITE) two years ago. The MWITE was formed in 1993 with the merger of the Ethiopian Domestic Distribution Corporation (EDDC) and Ethiopian Import Export Corporation (EIEC) following the change in the regime and economic reform.

Forex shortage leads water coverage to decline 27% in Addis

Local News

July 16, 2018

The Addis Ababa Water and Sewerage Authority (AAWSA) says they have enough water to meet the needs of city residents but are struggling to distribute it.
While inaugurating a waste treatment plant at Kality on Saturday July 7 the head of AAWSA, Awoke Hailemariam blamed the hard currency shortage for the problem.
During a lengthy speech, he criticized banks for prioritizing hard currency distribution over other commodities when water is vital for everyone.
Awoke said that because there isn’t enough hard currency, several well drilling projects have been delayed since they require electromechanical parts. He wants the federal government to step in and help alleviate the problem.
In the past five years the authority has spent over ten billion birr secured from the government’s coffer and foreign loans to tap more water for the city. Rehabilitating dams and drilling new wells during the last five years has enabled the city’s water supply to increase to 92 percent from about 53 in 2013.
More needs to be done as demand continues to increase. The population of Addis is growing very rapidly and a large amount of infrastructure is being built, add that to the fact that some wells have not been dug and all this means that the current water coverage has dramatically declined from 92 percent in 2016 to 65 percent currently. So even though water production has increased the distribution and coverage has actually declined.
The production capacity of AAWSA has reached 618,000 m3 per day; meanwhile the demand stands at 866,540 m3 per day. Awoke said that the actual production capacity is 525,000m3 if there is not any interruption like power cuts on the distribution process.
Old pipeline networks, waste, lack of technology, power interruption, damage to pipeline networks, lack of adequate financing and low tariffs that do not cover the operation costs are challenges hindering the Authority from getting enough water to its citizens.
The AAWSA head seriously criticized negligence, corruption and theft at the Agency although he says these things have been reduced.
The Kality Waste Water Treatment became a reality through financing by the World Bank and the cost was covered by the government and World Bank. It can treat 100,000 m3 of water per day. USD 100 million came from the World Bank and 759 million birr from the government.