The Ministry of Finance and Economic Cooperation (MoFEC) announced 50 potential projects for (MoFEC) Public-Private Partnerships (PPP). They are currently undergoing detailed study with support from the World Bank Group (WBG).
Haji Ibsa, Communication Director for MoFEC told Capital that finishing structural and legal frameworks for PPP were one of the things the Ministry was most successful in this past fiscal year.
“Among the 50 projects, 26 are in the final stages and international bids will be announced soon,” Haji said.
“Contract performances in Ethiopia are among major problems we face,” Haji expressed during the press briefing at the Ministry. “Lack of enough research prior to starting a project and less bargaining power costs the government.”
The director exemplified the low performance of the Metals and Engineering Corporation (METEC) with a fertilizer factory it took on 2012 with USD 540 million. China National Complete Plant Import & Export Corporation (COMPLANT) offered USD 730 million to complete the project within 5 years. METEC proposed to finalize the project within three years. Haji pointed out that this is a huge difference that should have been more thoroughly researched.
COMPLANT oversaw the design, manufacture, supply, transportation to site, site preparation, installation, supervision, commissioning, training of personnel and other responsibilities at the YAYU Industrial Complex.
“The complex was supposed to be finished long ago but the performance is below 50 percent,” he said. “The contract also has defects including making clear who is responsible for the deficient work,” said Haji.
The past 12 months witnessed continuous inflation which challenged the economy, according to the report.
In the last fiscal year, export earnings showed a USD 78.9 million decline (2.8%).
Imports increased by USD 24.6 billion compared to the same period last year. In the 2016/17 fiscal year the total paid amount for imports was USD 30.1 billion which increased to USD 55.5 billion.
The federal government’s income in 2017/18 was at 76.1% in comparison with the plan. In the last fiscal year, the government was able to generate 108.6 billion birr from tax and non-tax revenues, while the plan was to generate 237 billion birr.
Due to the high budget deficit, the Ministry postponed some mega project payments until the next fiscal year, according to Haji. The 2017/18 fiscal year saw a 53.8 billion birr budget gap which is going to be transferred to the current fiscal year.
Tax revenue has not grown at the pace of economic development which has pushed the government to look for loans to fill the budget gap. The report shows such actions affect the private sector especially when it comes to obtaining loans.
The ministry hopes to increase revenue by improving tax policy.
“There are going to be tax reforms in the coming fiscal year,” according to the report.
Audit gaps, loans, and excessive expenditures were listed reasons for the poor fiscal performance and marked as critical problems to be addressed.
Another issue was funding for youth programs. In the past fiscal year, 7.8 billion birr was transferred to youth but not every region used all their funding, according to the report.
Ministry studying 50 mega projects for private partnerships
Federal ministries slashed to sixteen
At the request of Prime Minster Abiy Amhed (PhD) the number of ministries will be cut to 16 when parliament returns from recess at the beginning of October, Capital has learned.
Relevant sources stated that several ministry offices are engaged in restructuring and mergers after a recommendation from the Prime Minister. Under this new arrangement the number of state ministers will increase and work under some ministry offices.
Excluding the Deputy PM and Speaker of the House of Peoples’ Representatives currently there are 28 cabinet members including the Ethiopian Revenues and Customs Authority, Attorney General, Commissioner of National Planning and Chief Government Whip.
A source told Capital that the PM wants to have just 16 ministries and during his recent US tour he asked if any other country in the world had the number of ministries Ethiopia has. He pointed out that this costs the government a lot of money and creates redundancy in job responsibilities. The PM also said that in some cases the tasks an agency undertakes are not enough to justify a ministry and instead can be handled under several larger ministries.
One expert agreed with the PM saying that enormous resources are allocated for a single minister including allocating three vehicles with drivers and other position benefits.
“However, if the position is at the state minister level the cost is reduced and becomes much more reasonable,” a source said. Cabinet level positions are challenging to manage since it takes unnecessary time for the head of government. Reducing the Council of Ministers should make governing more efficient, the source added.
According to sources, some of the ministries up for dissolution include the Ministry of Federal Affairs and Pastoral Area Development, which would be divided under the Ministry of Agriculture and Natural Resources and the Ethiopian National Security Agency. Some others like the Ministry of Industry and the Mining sector are also expected to supervised by other departments.
When he was first appointed the PM moved the Ministry of Livestock and Fishery, which was recently separated from Ministry of Agriculture, under the Ministry of Agriculture and Natural Resources.
Capital’s effort to talk Ahmed Shide, Minister of Government Communication Affairs Office, Fitsum Arega, Chief of Staff at the PM Office, was unfruitful.
CONSOLIDATING THE HORN
Consolidating the Horn from the outside is all the rage in the twilight of the modern world system. Before looking at the economic imperatives of consolidating the Horn from the inside, (citizens/member countries) we will look at the ‘all of a sudden interests’ emanating from the outside. There are two opposing camps working towards this consolidation project. One is represented by empire and its associates in MENA (Middle East & North Africa). By empire, we usually mean the triad (Samir’s word; God bless his soul), the US, Western Europe and Japan. Here, the strategy is more or less known; it is to maintain the global status quo with the reigning hegemon intact at the helm. The other is the interest pursued by the new ascending powers spearheaded, for the most part, by China and Russia. The SCO ensemble (Shanghai Cooperation Organization) is probably the real representative of this new gathering force!
The BRI (Belt and Road Initiative) of the Chinese is a massive undertaking that can potentially rearrange the current world order. It envisions integrating economically (hence, culturally, etc., etc.) the continents of Asia, Africa and Europe. The Eurasian project is already underway and the SCO is going to be the main vehicle for this project. The Eurasia land mass contains the largest known deposit of fossil fuel (including natural gas), to say nothing about other natural resources. It is also home to about 45% of the total human population. The BRI is going to be an integrated economic system that is going to rely, mostly, on road and rail networks. To recall; Russian and China are land based powers. These countries are now determined, more than ever, to leverage their physical geography to advance a global system that will have its center of gravity more towards the east. The stakeholders in this new system will be the numerous states and their population, as they will be critical to the functioning of the whole amalgam. Therefore, as far as the new ascending new project is concerned, multi-polarity is already baked in. This inclusively encompassing project, on its own, can have a stabilizing influence amongst the numerous nations that have been in conflicts for centuries. Geography is going to become destiny, again!
The BRI initiative also includes our continent. To that end, a corridor or corridors are needed to connect Eurasia and Africa. The best option for this seems to be along the Res Sea coast. Bab-el-Mendeb is a strait between the two continents and has a span of only 20 km! This is another of the choke points of the global sea routes, like the Strait of Hormuz in the Persian Gulf. Directly or indirectly controlling such Straits has been critical to the previous/current sea powers of the world system, namely the British and the American empires. Relinquishing the management of these sea passages to a new multipolar arrangement is bound to undermine the existing status quo, hence, might not be welcomed by empire, to say the least! Be that as it may, the two camps (empire & SCO) implicitly agree on the need to have reliable and permanent security zone around the Strait of Bab-el-Mendeb. In regards to this particular objective, the current war in Yemen is not going to help. To counteract the current situation on the Asian side of the Red Sea, the African coast must be strengthened, per force!
The oil kingdoms and powerful others want to protect this critical sea route, which is used for transporting goods, including oil to Europe and beyond. The Strait of Bab-el-Mendeb is becoming increasingly important as the Strait of Hormuz becomes increasingly volatile. If the Strait of Hormuz runs into potential difficulty, on the account of disagreements between Iran and the US, the only way to get oil out of Iraq, Kuwait, Qatar, Saudi Arabia and the UAE will be via Yemen, Oman or the Red Sea (assuming the northern route via Syria, etc. will remain inaccessible)! The former two might not always be compliant to empire’s desire (for various reasons), leaving the Red Sea as the more realistic option. And for that to happen, pipelines need to be built across the Arabian Peninsula all the way to the Red Sea coast! Far fetched as this might sound, the scenario is being entertained by the rich and the powerful. To this end, a meaningful naval force must also be established in the Horn, to protect the Strait ob Bab-el-Mendeb and the whole Red Sea coast. Amongst others, the ports of Assab and Massawa need to be revived. Even though Somalia has the longest coastline in Africa, assuring the safety of vessels, in its proximity, has become problematic after the collapse of the Mogadishu government in 1991. Besides, Somalia might be a bit off, geographically speaking. Today the consensus (amongst both contending groups) seems to be: the consolidated Horn, backstopped by landlocked Ethiopia, is probably the best option to secure the safety of the Red Sea, particularly the Strait of ‘Bab-el-Mendeb’. This, in a nutshell, is why the ‘sudden’ interest in the Horn, by various parties!
Unless BRI is severely impeded by empire, here we are going to coin a new word, Eurasiafric, will end up becoming the largest and biggest economic zone in the world. With a population of over 50% of humanity and the largest deposits of remaining natural resources on earth, to say nothing about its hardly tapped market, Eurasiafric, can easily reconfigure the existing world system! BRI envisions connecting African countries by road and rail networks, thereby economically empowering many of the poorer nations of the world system in the process. Herein lies the challenge to the global status quo, which is adamantly determined to continue leveraging the ‘good old’ polarizing globalization! The Anglo-American empire needs to assess its geo-strategy, rather soberly. We believe, the current hegemon must try to approach the whole scenario with a spirit of cooperation rather than confrontation. See the articles next column and on page 50. At times, letting go is the best policy! Most importantly, diversity is going to be the only game in the universe of Eurasiafric. Hence, the old model of accumulation that leveraged slavery, colonialism, racism, ethnic-ism, religion, sexism, etc. might well be inoperative in the years to come!
“Our progress in degeneracy appears to me to be pretty rapid. As a nation, we began by declaring that ‘all men are created equal.’ We now practically read it, ‘all men are created equal, except negroes.’ When the Know-Nothings get control, it will read, ‘all men are created equal, except negroes, and foreigners, and Catholics.’ When it comes to this I should prefer emigrating to some country where they make no pretense of loving liberty. Abraham Lincoln, Speeches and Writings, 1832-1858. Good Day!
Addis volunteers bring “New Formula for a New Hope”
The Addis Ababa City Administration has launched a New Year Campaign with the motto: “Ye-Adiss Tesfa Kemer”, which means a New Formula for New Hope. It will integrate artists, public figures and young volunteers who want to serve others.
During a press conference held at Capital Hotel last week the deputy mayor, Dagmawit Moges, launched the campaign to help the poor, elderly and children. Around 114 houses are selected by the summer volunteers to be furnished by the new team. Others will clean the dirtiest areas of the city.
Refurbishing elderly residences will be used as symbols of voluntary work and a promotion of a strong working culture, according to Dagmawit. The artists and public figures will construct and refurbish the homes of elderly residents by themselves and items will be donated to help others in need.
“Even though there is a culture of refurnishing houses at the beginning of New Year in Ethiopia, some are even suffering for their survival. We want to show others how they can demonstrate love for their country,” said Dagmawit.
The campaign is also planning to give school uniforms to 30,000 students. They also plan to improve school nutrition programs.
The summer volunteers will differentiate more than 90 dirty places to be cleaned and transferred to the youth in the area or a sustainable clean city plan.
The campaign began with planting trees at the hills of Entoto Mariam on Saturday.
It was founded to enable the community to express the new hope and new spirit, according to the newly appointed culture and tourism bureau head of the city, Nebiyu Bayu.
“The campaign will be finalized on the eve of the New Year with a festival and there will be different mini-festivals in the Woreda level,” said Nebiyu.
Around 170 artistes met at Capital Hotel prior to the launching of the campaign.
“The details of the last festival will be disclosed soon,” Nebiyu concluded.


