MAMCO Paper Products P.L.C. is considering closing doors after 24 years of making paper, toilet and soft tissue. The company which is affiliated with MIDROC said that lower quality products being passed off as its own are behind the problem. They have asked the government for help but to no avail.
“The company is planning to lay off many employees,” said MAMCO’s attorney.
Research conducted last year by the company indicated that fake products are being distributed throughout Ethiopia. They found fake products being sold by at least 11 shops in Mercato.
Their study showed fake and real products being sold alongside each other or presented as different categories of products.
Ethiopian Revenues and Customs Authority (ERCA) is losing a large amount of revenue from this giant illegal market chain because these illegal manufactures are not paying taxes. The distributors are also not giving receipts for the fake products, the research report stated.
The fake products are also said to have caused respiratory problems and tarnishing the company’s trademark, the report went on to say.
The chain of the forged products and the findings of the research were reported to the Federal Bureau of Investigation (FBI), an investigation wing of the Federal Police, according to Teka Mahari, the company’s attorney.
“The Bureau of Investigation has only arrested three of the distributers,” said the attorney.
“Police negligence has taken our last share of hope in finding the manufactures or staying in the market”.
The research team told Capital that negligence of different parts of the government bodies is costing the nation a fortune and discouraging loyal investors.
“We do all the assignments for police and using the data we gave them as an informant, they could have traced the manufacturer,” the attorney told Capital. “But they always complain about not having enough human resources for the intelligence and investigation team”.
“We have limited personnel working on intelligence but we are doing all we can to solve the crisis,” said Commander Berhanu Abate of the FBI’s Trade Competition and Protection Directorate Director. “We are investigating the facts to find out the source”.
The company’s marketing manager refrained from disclosing the amount of damage caused to the company.
MAMCO which is the sister company of MIDROC was established in 1994 and produces toilet tissue, facial tissue, exercise books and napkin products.
Fake products wipe out toilet paper company
New service reduces surgery waitlist as 10,000 still on hold
A shortage of surgeons and medical machines is causing over 10,000 patients to be on waiting lists for surgery at public hospitals.
Due to a shortage of surgeons and medical machines more than 10,000 patients are on waiting lists in Tikur Anbessa , St.Paul, and Zewditu hospitals and the eight additional government hospitals in Addis Ababa.
Most of the patients are from rural areas of Ethiopia and have been waiting for operations between six months and three years. These include: heart, eye, bone, brain and other internal organ operations. According to the Ministry of Health there were 12,000 on the wait list two months ago but that number has gone down to 10,000 thanks to the help of St. Peter and Ammanuel Hospitals’, new services. Yordanos Alebachew, Public Relations Officer at the Ministry of Health told Capital that 1,600 people will get the new service (new operation) in the next two months.
“We are doing our best to get people operations when they need them, we hope thousands more will be operated on soon.’’
There is no research on how many people died while waiting for operations.
Ashanafi Ambire, Public Relations officer for St. Peter Specialized Hospital told Capital that the new service will play an important role in reducing pain and fatalities for patients waiting for an operation.
“It is sad to see people die when they are waiting for surgery. We are specialized in TB cases but to help alleviate the burden of other hospitals we have performed 190 operations.’’
Until recently, Ethiopia had just one physician for every 100,000 people, but now the country is increasing the number of doctors.
In the past few years, the government opened 13 new medical schools, which more than doubled the number of medical institutions in the country. Ethiopia has also been increasing enrollment at existing schools.
Currently, Addis Ababa has 12 state run and more than 40 private hospitals. Many of the later were built in the past 21 years. In sharp contrast however, all of the state run hospitals were built more than 30 years ago. For a city of an estimated over five million, state run hospitals are the best medical care alternative centers used mostly by the middle-to-low income inhabitants of the country. However, Black Lion hospital is the largest referral hospital in the country where even the sick wealthy are referred to before flying out of the country.
Ethiopia is one of the countries in the world with low health workforce density of 0.7/1000.
EBA says goodbye to long time leaders
The Ethiopia Bankers Association (EBA), which represents private and public banks, has organized a farewell for the two former governors of the National Bank of Ethiopia (NBE).
Recently Teklewold Atnafu, long serving governor, and Yohannes Ayalew (PhD), former vice governor and chief economist, were replaced by Yinager Dessie, as governor and Bekalu Zeleke as vice governor.
Addisu Habba, president of the association and president of Debub Global Bank, said that the financial sector in the country has registered significant growth feeding the growing economy in the past period and the leaders of the Central Bank have played a crucial role in the success.
According to figures Addisu presented, there were only four private banks two decades ago but now there are 16. In 1998, excluding the Development Bank of Ethiopia, in 1998 there was around 14 billion birr deposited in two private banks and a total of 15.1 billion birr deposited in all banks.
This year, however, as of June 30, 451.8 billion birr was deposited in state banks and 277 billion birr deposited in private banks. Addisu said that the loan portfolio was about 8.8 billion in 1998 at public banks and four private banks dispersed 816 million. Now that figure has reached 179.9 billion 181.9 billion in loans respectively.
Another success has been expanding the number of branches, Addisu said.
He thinks the success is a result of economic growth. He said that the public has given their trust to the banking sector because of the Central Bank’s strong leadership and control mechanism. “Some of the share companies and shareholders stated the financial sector is a good example of a healthy businesses that other sectors should follow,” Addisu added.
Teklewold said that his organization has been primarily engaged in the formation of a healthy financial system, stable macroeconomic policy and feeding the development of the country. “To some extent we have registered good achievements,” he said.
He does admit there are challenges that must be addressed. Foreign currency availability, implementation capacity, inflation and financial accessibility all must be dealt with in order to keep the growth going. Private employees’ pensions, saving bonds and housing saving schemes in addition to aggressive public saving and expanding branches has been introduced to fill the financial demand.
Teklewold, who is the eighth governor in the history of NBE, succeeded Dubale Jale in 2006, while Yohannes served as vice governor for the last seven years.
At the same event EBA also welcomed the new leaders.
In a related development NBE has got a new board chairperson after the former chair, Mekonnen Manyazewal, retired recently.
According to the information that Capital obtained, the new NBE board chair is Girma Birru (Amb), former ambassador to the US. The other board members are Abraham Tekeste (PhD), Minister of Finance and Economic Cooperation, Eyob Tekalegn, Commissioner of National Planning Commission, Teklewold, now advisor to the PM, and Yinager and Bekalu.
Contraband, tax evasion, Forex addressed in meeting between private and financial sectors
The private sector has blasted the economic challenges in the financial sector during a meeting with leaders of the National Bank of Ethiopia (NBE).
At the meeting that the Ethiopian Chamber of Commerce and Sectoral Association (ECCSA) and NBE organized on Wednesday the private sector delivered its claim via Chamber president Melaku Ezezew.
Private businesspeople mainly the manufacturing and service industries described how difficult the hard currency shortage is for them.
Melaku addressed other challenges too such as the under invoice practice and the black market. He says the illegal trading practices have expanded. “Issuing receipts with a lower amount than the actual transaction pressures buyers and cheats the country out of tax revenue,” he said.
The hard currency shortage has forced producers to cut their production. Some are waiting up to a year for hard currency to import spare parts worth less than USD 1,000.
Some exporters who only want to obtain foreign currency are abusing the market by collecting major export items like coffee and sesame at a high price and selling them at a lower price or even a loss. “The central bank is familiar with this activity,” Melaku said accusing the Central Bank of not being proactive in stopping it.
He also explained that the contraband market severely affects hard currency earnings. “For instance in the 2016/17 budget year the country exported 750,000 livestock, while Djibouti and Somalia who are receiving Ethiopian livestock along the border area via contraband have exported seven million livestock during a similar period,” he said.
He complained that the country imports USD 1.6 billion worth of wheat and USD 650 million worth of edible oil which could instead be produced locally.
Local investors also amplified that the suppliers’ credit scheme introduced early the past budget year for Foreign Direct Investment, excluded local investors, who were working on import substitution.
“For us the only option for foreign currency is a Letter of Credit, while Foreign Direct Investment and exporters are favored against the government policy,” investors complained.
The chamber president suggested that more alternatives besides Letters of Credit and Suppliers’ Credit should be available for accessing hard currency.
Some investors felt that the Development Bank of Ethiopia was unfair when it came to serving businesspeople. “We have seen agricultural investors access finance easily even though the government stated is prioritizing the manufacturing industry. However, we were unable to obtain a loan from the policy bank,” one participant said.
Leaders in the manufacturing industry said private banks lack any real power since they are controlled by the Central Bank. They recommended that the government order leaders of banks to give priority to manufacturers when they want to import spare parts worth thousands of USD without consulting NBE or having to get a waiver from the central bank. “You have to give a limited mandate to the banks,” one of the participants added.
The business owners strongly argued that private banks are misusing the first come first serve scheme because they are giving priority to people importing end products and luxury commodities like whiskey and cosmetics as opposed to raw materials and medicine. The participants suggested opening up the market to foreign banks and starting a secondary market. Others also suggested that citizens be allowed to have a foreign currency account like Kenya has. Some also criticized the role of the Central Bank, which they said was unclear.
Manufacturing industry representatives asked the government to find ways to extend debt payments because manufacturing has been hindered by lack of inputs due to the shortage of hard currency.
The meeting was chaired by Yinager Dessie (PhD), who was recently assigned governor of NBE. He said the Central Bank will be reformed but said the private sector must help by following the law.
“The private sector has to avoid illegal acts,” he said. “There is misbehavior with regard to imports and exports; support us and we will support you,” he admonished.
In his response he addressed several of their issues recognizing that there is a challenge with under invoicing.
“We know who the affiliated company in China or Dubai is,” he warned.
He recalled that the Central Bank started to work with the Ethiopian Revenue and Customs Authority in the import business and Letter of Credit approval. In the beginning of the past budget year NBE forced banks to approve a Letter of Credit equivalent to the price of the import items.
He hinted that NBE would establish an intelligence element to control illegal activity in the sector in addition to the banking supervision division, which controls the banking sector and gave hope that the government may consider the debt payment reschedule request. They have also studied a secondary market and plan to establish one in the future.
Yinager said the government is studying how to stop the contraband trade, claiming that there are groups trying to gag the economy.
“The government will prosecute people trying to mess with the economy and trading in contraband,” he warned.
