At the Ministry of Industry’s (MoI) request the manufacturing sector has been busy developing a document to reveal their production capacity, their actual input demand and performance in the preceding year Capital learnt.
A week ago MoI asked leaders in the manufacturing sector via their association to submit their activity and letter of credit (LC) demand, according to sources. People working in Manufacturing that Capital spoke with stated they have been developing the document that MoI requested. According to the sector actors, most of them have already submitted their hard currency requests and actual operational capacity and performance in the past week.
The sector has been seriously affected by the hard currency shortage for the past a year and half.
Chemical and steel makers rely heavily on importing materials to make their products and at the same time are considered major sources of import substitution. During the recent industrial exhibition held at Millennium Hall in June leaders of manufacturing companies and relevant government officials submitted their challenges to the Deputy Prime Minister Demeke Mekonnen. The hard currency shortage was considered the main prority, during the discussions with the Deputy PM.
Bogale Feleke, State Minister for the Ministry of Industry, told Capital that they are working hard to address the challenges faced by the manufacturing industry, which employs hundreds of thousands of people.
“In our appearance at the parliament to deliver the current year’s plan we have stressed that the government needs to closely follow the sector, particularly the hard currency challenges that it faces,” he added.
He confirmed that MoI asked the industries to come up with their capacity, demand and previous year’s performance.
“Our operation in the past budget year indicates our capacity since the hard currency shortage seriously affects the activity,” an industrialist told Capital.
During a Thursday meeting with officials from MoI statements indicated that the manufacturing industry was operating at 11 percent of its actual capacity in the 2017/18 budget year.
The State Minister said that the ministry asked the manufacturers for their capacity to allow for a fair hard currency distribution in the coming period.
According to sources, the ministry asked the manufacturers after a request from the National Bank of Ethiopia.
It is expected that hard currency would be allocated to manufacturers mainly for export oriented and import substitutions. The state ministry declined to state the exact period when the factories would get the foreign currency.
“We are waiting for the hard currency,” manufacturers told Capital.
Recently the government received the Abu Dhabi Fund for Development which allocated USD one billion in cash and an additional USD two billion for FDI from UAE. Prime Minister Abiy Ahmed (PhD) stated that the country is securing significant hard currency from partners as well.
MoI asks industrialists to gather financial data in hopes of fair Forex distribution
Moyale border ERCA office under siege
A string of robberies continue to plague the Ethiopian Revenue and Customs Authority’s (ERCA) Moyale Branch.
For the past two weeks theft and property destruction have plagued the office, located on the border between Ethiopia and Kenya.
Chanyalew Haji, branch manager of the Authority says last week they attempted to come up with a solution to the problem.
He said that the incidents began when eight vehicles were burned and two severely damaged by people throwing rocks. Although the fire was later controlled by the National Defense Force and members of Federal Police, when security forces left larger groups came and looted the compound, stealing anything they could carry.
The building being used by ERCA also serves as a staff residence and a center for a new project called ‘One Stop Border’.
New infrastructure housing the One Stop Border project and equipment were taken away or damaged by the criminals, according to Chanyalew.
“We cannot evaluate the destruction as we now fear for our security if we go to the store area,” he told Capital.
“The situation now is not like what it was a year ago and it is beyond the capacity of the security forces in the area, we are worried about the safety of our staff.”
Destruction and violent activities are still occurring at the ERCA building and the Agency’s employees are being threatened.
“The branch office and the border are stable for now but no one is sure about what could possibly happen,” he added.
Capital attempted to reach Commissioner General Melaku Fenta of the Federal Police to comment on the issue but was unable to obtain a comment.
More possibilities
Eritrean President Issays Afeworki visited the Country Club Developers Association (CCD) last week with Ethiopian Prime Minister Abiy Ahmed (PhD). The President visited Legetafo housing development 17km from the heart of Addis Ababa.
“The president demonstrated an interest in us working on property development in his home country,” Tewdros Messele of CCD told Capital.
The company which was established in 2002 with a plan to construct high-end-quality houses on around 1,000sqm plots of land built apartments and middle income houses.
Government to introduce rent control
The Ministry of Urban Development and Housing which is concerned about skyrocketing rents is set to implement a new procedure which would prevent landlords from raising rents over a certain period.
The ministry proposed the idea last year but the then Prime Minister Hailemariam Desalegn, rejected the idea fearing that forcing the landlords to set a price could incite price inflation in the rental housing market.
But the new Prime Minister, Abiy Ahmed (PhD) is bringing back the proposal to ease the burden of tenants struggling with high rents.
The lesser and lessee regulation which is part of the real estate marketing development regulation aims to save tenants from unreasonable rental fees and rights violations.
The regulation is expected to be ratified by the Ministers of Council by September and is expected to improve the relationship between tenants and landlords.
The Prime Minister’s office fears government involvement in the rental market could lead to other problems.
Jantirar Abay, Minister of Urban Development and Housing told Capital that discussions will be carried out with landlords before the regulation changes go into effect.
“For everything there must be a line that keeps us from falling in to an unfair market, we know that some landlords raise rent every two or three months but tenants have no choice because there is no framework to protect them. We are in the final stages of applying the lesser and lessee regulation and we will meet with landlords to address concerns and clarify the rules.’’
With the low condo construction pace and the increasing population of Addis Ababa, house rents have skyrocketed over the last ten years. A three by three room which used to rent out for 300 birr ten years ago now rents for 1,000 to 1,500 birr in the outskirts of the city. According to studies landlords often violate tenant’s rights.
The Ministry is also planning to call in foreign companies to build more houses.
“Our great priority is to local contractors but if we can’t fill the gap we will bring in foreigners’’ the Minister said.
Currently more than one million people in Addis are in great need of housing but the government has delivered around 150,000 condo houses in the past 10 years.
