Category Archives: English
A group of Egyptian lawyers and political activists are preparing a lawsuit to challenge President Abdel Fatah al-Sisi’s preliminary agreement on Ethiopia’s Nile dam project.
The agreement which asserted Ethiopia’s right to build the Grand Ethiopian Renaissance Dam (GERD) has caused grave concern in Egypt over the prospect of the country’s water and electricity supply.
The deal was inked by Sisi, Ethiopian Prime Minister Hailemariam Desalegn and Sudanese President Omar al-Bashir in March 2015.
The group of lawyers and activists who seek to overturn Sisi’s decision argue that the agreement runs counter to the interests of Egypt.
The activists accuse the Ethiopian negotiators of taking advantage of the agreement and collecting international funding for the project.
The 2015 deal is aimed at setting principles which ensure that the construction of the dam would not harm the other countries and will compensate them in case of any damage. Many Egyptians – and Sudanese are concerned that their towns and villages will be swept away if the dam collapses.
The Nile supplies the bulk of Egypt’s drinking water, irrigates the Nile Delta and generates nearly half of the country’s electricity through the operation of the Aswan High Dam.
During the era of former Egyptian dictator Hosni Mubarak, Ethiopia made several attempts to build the dam, but Mubarak asserted that Egyptian access to its share of the Nile’s waters was out of question.
Following the overthrow of Mubarak, Ethiopia began building the GERD in April 2011 at a cost of $4.7bn and the project is expected be completed in July.
The news comes as Sisi already faces calls to be prosecuted for treason after the Supreme Administrative Court ruled against the government on Monday over the proposed transfer of the Red Sea islands of Tiran and Sanafir to Saudi Arabia under a deal that provoked outrage among Egyptians.
The hashtags “One million signatures to prosecute Sisi” and “Sisi is a traitor by verdict of the court” are on top of Egypt’s trending hashtags.
Court ruling against transfer of islands to Saudi Arabia
Celebrations erupted over the ruling outside the court in Cairo, with human rights lawyer Khaled Ali who along with Malek Adly led the legal challenge to the government’s plan leading them.
Sisi announced on April 9, 2016 that the two islands fall within the territorial waters of Saudi Arabia as stipulated in a border accord signed between Cairo and Riyadh the previous day.
The deal triggered unprecedented mass demonstrations, with protesters slamming the arrangement as unconstitutional. A number of lawyers meanwhile filed a lawsuit in the administrative court to block the deal.
Demonstrators have accused Sisi of surrendering Egyptian territory in return for Saudi money amid reports that Cairo was receiving $20 billion in aid from Riyadh to relinquish sovereignty of the islands. Egyptian courts have given jail terms to hundreds of protesters.
Back in June 2016, a lower administrative court rejected the agreement, prompting the country’s State Lawsuits Authority, representing the Sisi government in legal cases, to lodge an appeal.
Late last month, the Cairo government endorsed the contentious maritime border agreement in defiance of the June 2016 ruling and sent it to the parliament for ratification. The Monday’s ruling is final and could not be appealed again.
NAIROBI – A group of teenage boys who posted a video online of themselves raping two girls must not be allowed to evade jail by paying for their crime in camels, campaigners said, in a case that has sparked outrage in the conservative Horn of Africa country.
Authorities in the northern region of Puntland have arrested five suspects over the attack and are tracking down the sixth.
“It’s inhuman what those young girls have been through, the way they have been raped, tortured, stabbed,” said Hawa Aden Mohamed, executive director of the Galkayo Center for Peace and Development (GECPD), which is helping the girls.
Rape is pervasive and often goes unpunished in much of Somalia, where decades of conflict have fuelled a culture of violence and weakened institutions meant to uphold the law.
Traditionally, rape victims are forced to accept compensation – often in the form of camels or livestock – and marry their assailants in a centuries-old practice designed to end war between rival clans.
But graphic images of the gang-rape, shared on Facebook, have shocked Somalis, prompting an outpouring of sympathy for the victims and donations from hundreds of people for the 16-year-old and her family.
According to Somali Faces, a platform set up by Somalis in the diaspora, more than 9,000 pounds ($11,000) was raised in two days to help the girl, who has been forced to flee to a different city for fear of being ostracised by her community.
“It has been happening silently to many women and girls,” Mohamed told the Thomson Reuters Foundation by phone.
“Only now that it has escalated to the level of being shared through the internet, it became a big issue.”
Women across Somalia are often reluctant to report rape for fear of being denounced as impure and immoral and rejected by their families.
Equality Now’s Mohamed said a crowd of hostile men came to the hospital where the girls were being treated, demanding their release.
“The hospital was under siege,” she said. “That gives a red flag in terms of how the community is normalising this.”
Clan elders initially proposed that the perpetrators’ families pay each of the girls’ families 100 camels in compensation – an offer they rejected, GECPD said.
We have refused to allow traditional elders to intervene,” Mohamed Ali Farrah, director of Puntland’s justice ministry, told the Thomson Reuters Foundation.
“We shall take the teenagers to the court for raping the girls and they will face a severe punishment.”
It also seeks to end traditional justice practices by stating that marrying the victim is not a defence and compensation does not “extinguish the criminal action”.
“It’s time to implement (the law) and show they are serious about dealing with sexual violence,” said Equality Now’s Mohamed.
DUBAI – Triple Olympic track champion Kenenisa Bekele, the second-fastest marathon runner in history, said on Wednesday he can shave around 90 seconds off the current world record over the classic 26.2 mile distance before he retires.
Ethiopian Bekele, widely regarded as the greatest distance runner of all time and world record holder over 10,000 and 5,000 metres, is making an attempt at the world record this Friday at the Dubai Marathon.
He ran two hours, three minutes and three seconds when winning Berlin last September, six seconds outside Dennis Kimetto’s world record of 2:02:57 set on the same course in 2014.
The last time Bekele competed in the Dubai Marathon was in 2015 when an injury forced him to pull out mid-race.
“I am fully confident. My preparation is going well. I am healthy enough,” he said on the sidelines of a press conference ahead of Friday’s race. He said he expects a better time than in Berlin.
To run 2:01:30 Bekele said he would need to change his training programme.
“The way you prepare yourself is very different. You need nutrition groups and facilities have to be perfect,” he said, adding that he had not changed his preparations since Berlin.
Dubai is offering a bonus 250,000 dollars to any runner who can break the world record this week on top of the 200,000 dollar first place prize money.
Bekele, who is also due to run the London Marathon in April [nL4N1EZ2PV], the Ethiopian told reporters he would put his hand up for selection for the Tokyo Olympics in 2020 if he was fit.
Bekele was left out of the Ethiopian team for last year’s Rio Games.
ADDIS ABABA – State Minister Hirut Zemene met Djiboutian Ambassador to Ethiopia, Ambassador Mohamed Idriss Farah on Wednesday wherein the two sides reaffirmed commitment to expedite the already strong relations.
The discussions were focused on further strengthening the exemplary and multi-range of bilateral ties and solidifying the already existing regional and global cooperation.
State Minister Hirut underlined that Ethiopia and Djibouti have had exemplary relations in wide range of areas including infrastructural, trade and people-to-people ties as well as in terms of the number of joint commissions established between the two countries.
The State Minister said the two countries are also working closely on outstanding/pending issues to further advance their cooperation further noting that Ethiopia and Djibouti have already created positive vibe for other African countries with their newly-inaugurated railway.
She also praised the cooperation in the education sector, adding that this would further enhance the people-to-people ties between the two countries.
Ambassador Mohamed Idriss Farah on his part said Djibouti and Ethiopia have excellent relations in all aspects.
He said the two countries are working closely in the economic, social and political frontiers for mutual growth and prosperity of their peoples.
Ethiopia and Djibouti will also continue to cooperate on global stages, he added.
NAIROBI – Millions of Ethiopians face a hunger crisis for a second consecutive year after drought hit sub-Saharan Africa’s second most populous nation, the United Nations said on Tuesday as it appealed for more than $900 million in aid.
A strong aid response to last year’s El Nino-linked drought, has almost halved the number of Ethiopians needing food aid to 5.6 million since mid-2016, but a lack of rains once again threatens the country’s ability to feed itself, it said.
“Last year, (we were)… able to mount the biggest drought response operation in global history,” Mitiku Kassa, head of Ethiopia’s National Disaster Risk Management Commission, said in a statement.
Aid is also being ramped up in drought-hit neighbouring Kenya and Somalia.
The United Nations’ humanitarian coordinator in Somalia, Peter de Clercq, warned on Tuesday of “a significant risk of further deterioration to famine”, appealing for $864 million for 3.9 million Somalis.
Ethiopia’s latest rain failure has mainly hit southern livestock-herding communities, unlike last year when hunger was worst in the north and west.
“The impact is expected to be most dire in early 2017 among livestock, with unusually early migrations, excess mortality rates and extreme emaciation,” the United Nations Food and Agriculture Organization (FAO) said in a statement.
Eastern and southern Africa were hard hit in 2016 by drought exacerbated by El Nino – a warming of sea-surface temperatures in the Pacific Ocean – that wilted crops, slowed economic growth and drove food prices higher.
For Ethiopia, it was the worst drought in 50 years, and devastating for a country where eight out of 10 people depend on farming and livestock.
As the next drought bites, some families are still repaying loans taken out last year, while others are vulnerable because they have not replaced lost herds, FAO said.
“The legacy of last year’s El Niño along with low rainfall during a critical season pose renewed risks now, especially for pastoral communities,” it said, appealing for funds to buy animal feeds and to slaughter excess animals.
Almost 18 million Ethiopians received $1.7 billion in emergency aid in 2016, U.N. spokeswoman Choice Ufuoma Okoro told the Thomson Reuters Foundation, almost half of which came from the Ethiopian government.
Every authoritarian regime has its own symbol of economic exploitations and monopoly either in an individual face or in an organizational mask.
Ethiopia, despite its success in persuading its western allies that it is combating poverty using its fast economic growth and democratization, remained to be one of the poorest and most closed countries where a group of few individuals control vast economic shares and absolute political power. Unlike many other authoritarian regimes, the most dominant ruling elite group in Ethiopia has a complex behavior in that it claims to represent a minority ethnic group from the northern part of the country, Tigray. In response it has gotten a relatively overwhelming legitimacy among the people of Tigray as compared to other regions; or at least many people, including myself, believe it receives better legitimacy only in that specific region.
Moreover, this elite group has established a chain of several multi-billion dollar worth business firms under a home-grown umbrella called EFFORT, ‘Endowment Fund for the Rehabilitation of Tigray’, which was originally established to serve a harmless looking purpose of ‘rehabilitating’ Tigray, a war-torn region deprived of a fair chance to prosper during decades of successive regimes. In the past 25 years of TPLF’s dominated political rule in Ethiopia, therefore, EFFORT has emerged as one of the leading economic powerhouses in the name of ‘rehabilitating’ the region.
What is in the name?
On the surface, EFFORT is an umbrella company for a group of businesses which are involved in major industrial activities in Ethiopia, such as banking and insurance, import and export, media and communication, construction, agribusiness, and mining, among others.
Having started with an initial capital of around US$100 million, EFFORT’s worth has now reached more than a staggering US$3 billion in paid capital, creating more than 47,000 employment opportunities.
EFFORT companies were first registered as private share companies owned by some of the top leaders of TPLF. Later on, however, the companies were re-registered as “endowment” companies whose profits will not be divided to individuals, according to the 1960 Ethiopian civil code. However, top officials of the TPLF, the most powerful member of Ethiopia’s ruling party EPRDF, remained as the CEOs and GMs of these companies; and some of whom reportedly own small shares designed to motivate them in helping EFFORT stay competitive.
‘The original sin’: How did TPLF accumulate its wealth?
EFFORT’s official profile claims it was established by using seed money from the liquidated amount of capital of the Tigrayan People’s Liberation Front (TPLF), accumulated during Ethiopia’s 17 years civil war of the militarist Derg regime to establish these companies.
In 2008, Aregawi Berhe, a former veteran of TPLF who later on left the party, did his Ph.D. dissertation on ‘The Political History of TPLF’ for Vrije Universteit in Amsterdam, somehow corroborates the story. In his account of the party’s earliest times, Aregawi wrote about one of the first successful operations that the then guerilla fighters ever had: ‘Axum Operation’. It is a military operation that succeeded in raiding a police garrison and a bank in the historic city of Axum in the north during which the TPLF fighters made away with “substantial amounts of arms and ammunition and 175,000 birr (US$ 84,000)”, according to Aregawi.
Having started by raiding public banks, members of the TPLF continued to accumulate wealth and went on to dominate the contested use of ‘aid money’ for political purposes before the party came to control power in 1991. TPLF had also founded the Relief Society of Tigray (REST), a humanitarian wing, during the civil war. “By June 1985,” wrote Aregawi Berhe, “REST had received more than US$100 million from donors in the name of saving famine victims. [… however] the late Meles [Zenawi’s] proposal for the allocation of the relief aid money was as follows: 50% for MLLT [Marxist-Leninist League of Tigray] consolidation, 45% for TPLF activities and 5% for the famine victims.” Predictably, Aregawi’s claim, especially that of aid money allocations, has been vehemently denied by the current TPLF leaders.
Gebru Asrat, another former TPLF veteran who later on established an opposition political partyArena Tigray, has briefly raised this issue in his book, ‘Lualawinet Ena Democracy beEthiopia’,(Sovereignty and Democracy in Ethiopia), and said that the guerilla fighters used to get a lot of money in foreign aid and; ‘it was up to the TPLF [leadership] to allocate which money goes where.” Gebru neither confirmed nor denied Aregawi’s claim that aid money was used for political purposes. If anything, he is of the view that it is impossible to make such allegations.
However, legally questionable ways of accumulating wealth seemed to have continued within the party even after it took control of state power. Ermias Legesse, a former Communication State Minister, who is now in exile, has recently published his second book, ‘Yemeles Leqaqit’, in which he raised multiple controversial points against the establishment and functions of EFFORT.
In Chapter six of this 565 pages book, Ermias tells several stories on how EFFORT used to get its finances unfairly from the Ethiopian state and how it transferred it to its own account. Ermias went an extra mile to display a letter written in 1994 and was signed by the then Prime Minister, Tamrat Layne, demanding the Addis Abeba Health bureau to refund TPLF’s medical expenses of the civil war time. The money requested amounted to more than four million birr (almost 67% of the city’s annual budget at that time), but the total amount paid by the Ministry of Health was actually 17 million birr. Ermias also wrote that the medicines that TPLF had distributed to the locals during the civil war, for which it had requested a refund, was actually robbed by the guerilla fighters from public pharmacies. The money that was paid back in such a bizarre demand by the then Prime Minister was put in TPLF’s accounts.
Of continued sins & controversies
Companies that are currently under the umbrella of EFFORT were originally established as PLCs having a few members of TPLF leaders as shareholders. Later on, in August 1995, they were re-registered as ‘endowment’ companies and still remained under the umbrella of EFFORT.
The re-registration of these PLCs as ‘endowment’ companies was done to justify that these companies were established using the money donated by the shareholders of the preceding PLCs, which in itself portrays a picture that EFFORT, as a conglomerate of these companies, did not use public money to be established. According to the Ethiopian civil code, endowment companies are legally prohibited from distributing their profits to individuals. This fact effectively obscures the few individuals controlling these companies behind a party cover.
In 2004, the Amharic version of the ‘Ethiopian Reporter’, a bi-weekly newspaper owned by a former member of the TPLF rebel group, published series of stories concerning EFFORT and its debt in public banks, including the controversial cancellation of the debt. (The copies of these publications are annexed in the latest book of Ermias Legesse, referred above.)
According to this series of publication, EFFORT had borrowed 1.7 billion birr from the state-owned Commercial Bank of Ethiopia (CBE) which later on has risen to 1.8 billion birr debt including the interests. First, CBE officials have denied and said that ‘they did not loan money to EFFORT’. But later on CBE had transferred the debts to yet another state-owned bank, Development Bank of Ethiopia (DBE), for ‘better management’. Finally, DBE reported that the amount of money loaned to EFFORT was ‘none performing’ loan. Ermias claims that the CBE had loaned EFFORT the money with no collateral in the first place. The following year it was reported that DBE, the bank that took over the loan for “better management” was facing a bankruptcy of some 3.5 billion birr; certainly not exclusively attributable to the loan provided to EFFORT, but due in a significant part to it.
The other controversy surrounding EFFORT lies in the manner in which its businesses affiliates operate. Its leaders claim that their extreme obedience to the rule of law and their refusal to bribe local officials often poses a great challenge to their operations, disadvantaging their businesses. However, EFFORT companies are generally known to enjoy a great deal of support from officials. A good example to prove this is a rare ruling by a federal court on the 19th December 2012. The federal First instance court at Lideta ruled that one of EFFORT’s companies, Mega Entertainment Center, which was led by the widow of the late PM Meles Zenawi, Azeb Mesfin, has been running its business in a fraudulent manner by reporting more expenses than the actual and without paying value-added taxes collected from its customers during the preceding eight years.
But the secrecy of most of these companies is such that details like this come to the public’s knowledge only when there is disagreement between stakeholders; this time, it was between Azeb and another management member of Mega, Eqoubay Berhe.
Still, just what is EFFORT?
According to a letter by former US ambassador to Ethiopia, Donald Yamamoto, which was one ofthe Wikileaks documents, Ex-TPLF veteran Seyee Abraha (who later on fell from favor and was subsequently jailed for corruption) was quoted as saying the objectives of EFFORT during its foundation were “to study, and then establish profitable companies that use locally-available resources and provide employment [opportunities] for Tigray.” In this sense, EFFORT, even though it also gets raw materials from and markets its end products to other regions in Ethiopia, mostly (though not exclusively) hires Tigrians.
In principle, its profit should be used to rehabilitate the region. However, many Tigrians despair the fact that the “Endowment” is merely used by a few corrupt TPLF elites to enrich themselves. Former veteran and ex-president of the Tigray region for a decade, Gebru Asrat, in his book mentioned above admitted that the “endowment” was being exploited by a few TPLF top leaders; he suggested that there must be ways of diverting EFFORT’s profits/wealth to the people of Tigray as the endowment belongs to the Tigrians. His suggestion indicates a return, once again, of the endowment to a share company in which as many individuals could become shareholders. Many Tigrian pro-democracy activists agree with Gebru Asrat’s suggestions.
What do ‘others’ own?
Without a doubt, other regions of Ethiopia have also suffered significant social and economic devastations during the 17 years civil war before it ended in 1991. Military expenditure was Ethiopia’s biggest expense during the entire rule of the militarist Derg regime. Suffice to say, therefore, other regions also needed ‘endowments’ of their own.
It seemed it was in response to this concern that TPLF ‘provided’ seed money for other rehabilitation funds. In Oromia regional state is Dinsho endowment, which was established in 1992 and was renamed Tumsa Endowment for Development of Oromia in 2001. It is led by top officials of the OPDO, the party representing the region within the EPRDF coalition. In Amhara regional state is ‘TIRET’, first established in 1995 and went on to incorporate several pre-existing companies. TIRET is led by senior officials of ANDM, the party representing the region within the ruling EPRDF. And in Southern Nations Nationalities and People’s Region (SNNPR) is WENDO trading, which was established in 1994 and is led by senior officials of SEPDM, the party representing the region within the ruling EPRDF.
Seyee Abraha has admitted: “TPLF gave a portion of its capital to each of the three parties within the EPRDF to establish their own endowment funds”. However, the combined numbers of companies run by these three ‘endowments’ are less than twenty; whereas at least 24 companies are listed under EFFORT; (some put these numbers as high as 380). The nature of secrecy surrounding this delicate matter means one may never find out the real figures.
Nonetheless, the three “endowments” run by OPDO, ANDM and SEPDM were supposed to create employment opportunities for more than 80% of Ethiopia’s population as compared to EFFORT’s targeting of 6% of Ethiopians in Tigray regional state.
According to a research titled ‘Rethinking Business and Politics in Ethiopia’, published in 2011 by Sarah Vaughan and Mesfin Gebremichael, “[TIRET] companies employ only 2,800 staff, as compared with the more 14,000 permanent employees or 34,000 contract staff of EFFORT and its companies.” And the poorest regional states of Ethiopia, namely, the Somali, Afar, Benishangul-Gumuz and Gambella regions do not have ‘endowment companies’ of their own to help them rehabilitate their respective regions, although they are politically administered by EPRDF’s sister parties.
What’s not and what’s owned by EFFORT?
There is a big deal of confusion in identifying EFFORT’s business complexities. Selam Bus Share Company is a good example. Established in 1996, 99.6% of this interregional transport service providing company share is held by Tigray Development Association (TDA); the rest is held by individuals. Although Selam Bus board members, as are EFFORT companies’ board members, are members of the TPLF, EFFORT has no registered share in Selam Bus. However, Selam Bus is a company many people name first when asked to list EFFORT’s businesses. This blurry ownership status is perhaps one of the reasons why Selam Buses were targeted by the last year’s widespread public protesters in Oromia and Amhara regions.
Dejennna Endowment is another example. Established to ‘help promote development in Tigray,’ on the surface Dejenna Endowment is a part of the Relief Society of Tigray (REST). There are 11 companies listed under Dejenna Endowment in its website. In 2009, Dejenna has merged with EFFORT following the appointment of Azeb Mesfin, widow of the late Meles Zenawi, as head of the later. Companies under EFFORT usually hold shares in one another’s companies so that one pulls up when another fails. However, until today little is known about the merger of EFFORT and Dejenna. Besides, the information on the official websites of the two endowments mis-inform readers as if the two are independent of one another. But, some of the companies that are known to be under EFFORT are actually listed as the properties of Dejenna endowment.
The Sheger vs Mekelle narrative
By now, keen observers of the relationship between politics and business in Ethiopia can safely assume that business and politics in Ethiopia are radically divided into two major narratives in defining and perceiving the current TPLF dominated regime. I call these narratives ‘the Sheger narrative’ – a political narrative that is mostly advocated from here in the capital Addis Abeba, and ‘the Mekelle narrative’ – usually advocated by the people in Mekelle, the capital of the Tigray regional state, home to the all too powerful members of TPLF.
However, both narratives go beyond these respective centers depending on whose political view is solicited. The two narratives are only thoughts that do have majority acceptance in their respective centers. ‘The Sheger narrative’ (the most popular one) considers the TPLF dominated administration as a total failure that holds power by force; whereas ‘the Mekelle narrative’ generally sympathizes with the regime and considers it as a legitimate administration, albeit admitting some of its fault lines mostly due to the corrupt practices of some of its leaders.
This definition makes it clear how and why Tigrians (in most cases driven by ‘the Mekelle narrative’) and non-Tigrians (driven by ‘the Sheger narrative’) view the relationship between TPLF and EFFORT differently.
Tigrian pro-democracy activists’ criticism of EFFORT can be clearly seen by how they react to the manner in which former leaders of TPLF, who were expelled during the party’s infamous split in 2001, view EFFORT. Former top leaders of TPLF, Seyee Abraha, as we read him on wikileaks documents, and Gebru Asrat, from his book, both criticize EFFORT’s management. Both regret EFFORT’s failure to rehabilitate Tigray as was stipulated in its foundational principles. However, both believe the people of Tigray are the rightful owners of these ‘endowment’ companies under EFFORT.
On the contrary, most non-Tigrian activists and politicians disown EFFORT and also the rest of ‘endowments’ that are being manipulated by EPRDF leaders. Lidetu Ayalew, former leader of the opposition Ethiopian Democratic Party, and Dr. Berhanu Nega, current leader of the outlawed Ginbot 7, both condemned EFFORT as a party business that monopolized the economy, and both concluded the “endowments” should be dissolved or privatized. Similarly, many other activists want to (and sometimes advocate) boycotting EFFORT services and products to stop TPLF’s hegemonic march.
In the same manner, Tigrian activists claim other home grown charity organizations operating in Tigray, namely REST and TDA, are used to create grassroots networks to dictate the people of Tigray become loyalists of the TPLF, whereas non-Tigrian activists, such as Ermias Legesse, disagree and say these organizations are replicas of EFFORT to simply promote disproportionate social development of Tigrians at the cost of others.
This leads us to conclude that ‘the Mekelle narrative’ generally portrays EFFORT as an organization that rightfully belongs to the ‘Tigrian people’ which is unfortunately being exploited by few members of the top management for personal gains. ‘The Sheger narrative’, on the other hand, defines EFFORT as ‘a tool to exploit the wealth of Ethiopian people and create economic monopoly for the benefit of a [small] group’.
The red line
What is indisputable is speaking truth in a country governed by the TPLF dominated EPRDF is always a dangerous exercise; speaking the truth about EFFORT is even more dangerous. A tax controller from Adama, 100kms south east of Addis Abeba, who is now in Qilinto prison on the southern outskirt of Addis Abeba suspected of ‘corruption’ has recently told me that ‘EFFORT trucks were known to be untouchables on their way to and from Djibouti port’. Similarly, investigating companies under EFFORT is normally a red line no journalist in Ethiopia would like to cross, contributing to the secrecy of the ins and outs of the giant umbrella.
Concealed in this intimidating rubble are crucial facts about EFFORT such as details on tax returns. That is why this article cannot be taken as an exhaustive look into the functions of EFFORT and its affiliates, but just the tip of the iceberg to demonstrate in part some facts about the economic exploitations of the authoritarian regime currently governing Ethiopia.
DJIBOUTI – The president of Djibouti on Monday formally launched the construction of a project touted as Africa’s largest free trade zone, to be built in the tiny Horn of African nation with Chinese backing.
The agreement to build the 48 sq km (19 sq mile) free trade zone was signed in March 2016 as part of China’s bid to expand trade routes, a series of infrastructure initiatives stretching across 60 countries that the Chinese have dubbed “One Belt, One Road”.
Tiny Djibouti, population 876,000, has long punched above its weight. It hosts large U.S. and French naval bases; China is also building a naval base. Djibouti also handles roughly 95 percent of the inbound trade for neighbouring Ethiopia, population 99 million.
“(Djibouti) aims to become a gateway not only to Ethiopia but to South Sudan, Somalia and the Great Lakes region,” Aboubaker Omar Hadi, chairman of the Djibouti Ports and Free Zone Authority, told Reuters.
“This new free zone will be the country’s first employment reservoir, with more than 15,000 direct and indirect jobs created.”
China’s largest public port operator, Dalian Port Corporation Limited, is building the free trade zone. The Djibouti Ports and Free Zone Authority will operate it in a joint venture with China Merchants Holdings.
The agreement calls for the zone to handle $7 billion in trade within two years. Djibouti will create a unified customs system with China, establish a transit trade centre and set up a currency clearing system, the agreement said.
Chinese companies are also expanding Djibouti’s Doraleh Multipurpose Port, estimated to cost $590m and scheduled to be operational in 2017, and building two new airports for with a combined cost of $599m.
The larger of the two facilities – slated for completion in 2018 – will be located 25 km south of Djibouti City and will be able to handle 1.5 million passengers per year and 100,000 tonnes of cargo. The second facility, located in the north, will have a capacity of 767,000 passengers per year.
He’s the loneliest of long-distance runners, a man far removed from his country and his family. These days,Feyisa Lilesa runs not for personal glory but for emotional therapy and for a purpose he believes to be far bigger than himself.
Lilesa works his legs both to remember and to forget and also, most importantly, to remind non-Ethiopians what they need to be thinking about when they see him churning by on the open road.
How could he be?
Since last summer, when he won the silver medal in the Olympic marathon, then crossed his arms in an “X” in front of his face in a show of solidarity with his Oromo people, he has been trapped in a self-imposed exile, trying to make a new life for himself at least temporarily in Flagstaff, Ariz., a world away – in every way imaginable – from his home in Ethiopia.
Oromo protests erupted last year for a variety of reasons and many people were killed or jailed, including a number of Lilesa’s relatives and friends.
“I go to the prisons and I see them,” he said. “There’s torture. It’s very bad.”
And during long runs he said he witnessed firsthand what had happened to many Oromo. So, despite the possible consequences, he doesn’t regret making a statement when he was given the platform to do so with his breakthrough runner-up finish in one of the most prestigious marathons.
“While I was doing the training, going through the countryside, my daily observation was of the slaughter that was committed,” he said, again speaking through an interpreter. “My feet were running, but my mind was not synchronized. When I went to Rio, I was physically fit and I was determined to do very good because I wanted to convey a message. The world (didn’t know) what was happening in my country. I was determined to tell the world.”
For the moment, his parents, brother and sister, and his wife and two young children seem to be safe – his celebrity helps protect them, Lilesa’s former agent, Hussein Makke said, suggesting hopefully that he is “too big for them to do anything bad” – but this is an inordinately difficult time in his life, a time that should have been given over to celebration and grand plans for the future.
He doesn’t turn 27 until next month. The prime years for a marathoner are out there in front of him. Instead …
“I worry always,” Lilesa said. “You do not know from one day to the next. Today, it’s OK (for his wife and children). But tomorrow it might change. You do not know.”
Some days he’s so consumed by his concerns that he doesn’t feel like training, but then he tells himself he must push even harder because his voice and actions will only have power if he remains successful as an athlete.
Lilesa said he was grateful to the United States for giving him an emergency visa to move to Arizona and train, saying, “This is a peaceful country,” and he said efforts are under way to attempt to allow his family to join in northern Arizona. But he admits the groundswell of anti-immigration fervor stoked during the recent election of Donald Trump has become a concern.
“If it had been well and good in Ethiopia, I would have chosen to go (home),” Lilesa said. “Now, if there are any changes in policies (in the U.S.), I can go to Europe instead. But, by my being here, I bring benefit to the country. I help in being an asset, not a liability. The new government, I hope, does not (see me) as a ferocious animal. If that is not the case, then I will go somewhere else and be an asset.”
‘I miss my family’
Lilesa won the Aramco Half for the first time in 2011, finishing in a fairly mundane 61:54, but a year later he erased Ryan Hall‘s Houston record with a time of 59:22. (Hall’s 59:43 here in 2007 remains the fastest time ever by an American.) Lilesa owns a personal best of 2:06:56 in the marathon, which he posted last year in Tokyo. He ran a 2:09:54 in Rio, crossing behind only Kenyan Eliud Kipchoge, who’s considered the world’s best marathoner.
American Galen Rupp, who was supposed to be in the Aramco field with Lilesa on Sunday before pulling out with a foot injury, took the bronze medal in Rio.
Lilesa had made the decision to cross his arms as a sign of protest if he finished near the front of the race. He didn’t tell his family of the plan in advance because he knew it would likely frightened them. He insists he has no regrets, although the defiant act has, it would appear, left him stranded in a strange land. But at least Flagstaff has a similar elevation and climate to where he’s from in Ethiopia. It’s good for his training, if less so for his state of mind.
“I miss my family,” he said. “I miss (Ethiopian) food. I miss the culture. But this is forced on me. It’s not my decision.”
BAMAKO – The 27th Africa-France Summit closed Saturday in Bamako, Mali, with participants adopting a global plan on fight against terrorism and other forms of violence.
At the end of the summit, French President Francois Hollande and his Malian counterpart Ibrahim Boubacar Keita held a joint press conference during which they talked about the issues the 35 heads of state and government discussed during this one-day summit.
Hollande first congratulated “Mali for the success of this Africa-France summit,” while during the summit, questions were raised about why Mali still faces severe terrorist threats in the north.
“The threat is global, that’s why a global plan was adopted, which put every African country to face its own responsibilities,” Hollande told the press, reiterating “the accompaniment of France to Africa to ensure its own security.”
“For the emergence of Africa, development projects will be financed up to 23 billion euros by French Agency of Development (Agence Francaise de Developpement) in the coming 5 years,” he said.
Asked about the presence of French anti-terrorist operation in northern Mali and in the Sahel, Hollande said “we are here in Mali in the framework of international cooperation” and “at the request of the Malian government and president at that time in 2013.”
“We have nothing to hide, we just want to serve a cause. I will not allow any stain on the operation of France in Mali,” Hollande stressed.
“The French force will stay in Mali and Africa as long as the countries decide it should,” the French head of state said.
The 27th Summit Africa-France opened this Saturday morning with the theme “Partnership, Peace and Emergence.”
For the Malian president, “(economic) growth is quite strong in Africa, but it is fragile.”
The President of Mali hoped for “more sustained economic growth” and “welcomed the leadership of African youth and their spirit of partnership” to generate strong growth across the continent.
According to Hollande and Keita, Libya and The Gambia were also at the center of the discussions.
First held in France in 1973, the Africa-France Summit aims to maintain and boost relations between France and Africa. This is the last Africa-France Summit for Francois Hollande as French president.
Prime Minister Hailemariam Dessalegn on Monday accused Allana Potash, the Canadian company which was engaged in potash mineral exploration and development project in the Afar Regional State, of tax evasion.
In a press conference held in his office on Monday morning Prime Minister Hailemariam was asked about the state of the Ethiopian mining sector and the exit of prominent mining companies such as Allana Potash and Israel Chemicals Ltd (ICL).
Hailemariam said that the case of Allana was related to tax evasion. “Allana owes the Ethiopian government some two billion birr in tax. Allana should pay this and the Ethiopian government will use legal means to recover its money,” the prime minister said.
Allana Potash, which was listed in the Toronto Stock Exchange through its subsidiary company Allana Potash Afar, was prospecting for potash deposit in the Danakil Depression in North East Ethiopia for more than six years and spent tens of millions of dollars on the exploration project. The company discovered 3.2 billion tons of potash which could be mined for 50 years. The company had a plan to invest 750 million dollars on developing the potash mine and export one million tons of potash yearly generating 430 million dollars.
In 2013 the then Ministry of Mines granted Allana large scale mining license that enables the company to mine the potash deposit. However, due to the commodity market crash particularly the nose-diving price of potash in the global market, Allana was unable to raise the required investment capital to finance the project. To avoid massive shareholders dilution the management and board of Allana Potash decided to sell the company. Accordingly, in March 2015 the board accepted the buyout offer from ICL, the 6th largest fertilizer producer in the world.
At the moment, officials of the Ministry of Mines, Petroleum and Natural Gas were reluctant to recognize the deal citing that they were not pre informed about the transaction, a claim which executives of Allana refute.
Following the acquisition of Allana Potash, ICL applied to the Ministry of Mines, Petroleum and Natural Gas to transfer the mining license of Allana to ICL. While the ministry was evaluating the request made by Allana Potash Afar, a unit of ICL was allowed to continue the mine development work. Before the mining license transfer was made the Ethiopian Revenues and Customs Authority (ERCA) claimed Allana Potash Afar to pay some 55 million dollars in tax. The tax claim includes the withholding and VAT tax arrears, which was supposed to be paid by Allana, and capital gain tax for the acquisition of Allana.
ICL rejected the tax claim and subsequently the board of ICL decided to terminate the potash project. In a statement issued in October 2016 the board stated that Allana Potash Afar was unable to carry out its work due to the obstacles posed by the Ethiopian government. “The board has taken this decision in view of the Ethiopian government’s failure to provide the necessary infrastructure and regulatory framework for the project and follows the Ethiopian tax authority’s rejection off Allana Afar’s appeal regarding the unjustified and illegal tax assessment which Allana Afar has declined to pay. In particular , as already notified to the government, Ethiopia’s acts and missions have been in breach of , inter alia, the protections to which the investment is entitled under an international investment treaty,” the company’s statement read.
Defying ICL’s statement Prime Minister Hailemariam blamed Allana Potash for the tax fiasco. The PM said that the Ethiopian government knows only Allana Potash. “It is Allana that is legally registered and has been operating in Ethiopia. If Allana does not want to continue working on the project we will award the concession to one of the many companies that are vying to take over the mine.”
Hailemariam said that ICL made a back door deal with Allana without the knowledge and consent of the Ethiopian government. “ICL did not negotiate with the Ethiopian government so there is no reason that the Ethiopian government is blamed for its exit. When ICL realized that it was defrauded by Allana it decided to quit. When ICL discovered how much tax Allana owes the government it decided to pull out. It is because the agreement that they made with Allana does not include all this tax arrears. If executives of ICL come to us and ask us to transfer the mining license after the tax is paid the Ethiopian government is ready to deal with them,” he said.
The former management and board of Allana Potash were stunned by the PM’s statement. Cofounder of Allana Potash Afar, Nejib Abbabiya, claims that Prime Minister Hailemariam was misinformed. “I respect the Prime Minister. He is leading a big country which is one of the fastest growing economies in Africa. But when it comes to Allana’s case I am afraid that he has wrong information. He relies on information provided by his aides and experts. And I think he is provided with erroneous information. It is easy to verify the ce because all the documents are there,” Nejib said.
Nejib said that there was no back door deal made between Allana Potash and ICL. “The deal was made between two publicly traded companies and the companies cannot hide the information because they have to report everything to thousands of shareholders of the companies. They have to put everything on the book because they are listed on a stock market. The negotiations and acquisition of Allana Potash by ICL was a public knowledge. It was reported by the international media as well as Ethiopian media including The Reporter. A press statement was issued in due course.”
Nejib said that senior executives of Allana Potash and ICL visited senior Ethiopian government officials including President Mulatu Teshome (PhD), former Foreign Minister Tedros Adhanom (PhD) and Minister of Mines, Petroleum and Natural Gas, Tolossa Shagi and explained about ICL’s plan for the potash mine development project.
ICL initially bought 16 percent of the shares of Allana and later acquired the remaining shares for about 140 million dollars. ICL has been closely working with the Ministry of Agriculture and the Agricultural Transformation Agency (ATA) on fertilizer use advocacy. ICL had revealed its mine development plan and construction of three fertilizer blending plants with an out lay of 1.5 billion dollars. ICL had granted 600,000 dollars for farmers’ education on the use of fertilizer.
Speaking of the tax arrears Nejib said that ICL conducted due diligence on Allana Potash for a year before it agreed to buy the company. He said ICL knew what assets and liabilities Allana had. “ICL assumed all the assets and liabilities of Allana Potash. Let alone such a big transaction when you buy a house in Addis Ababa you do some investigation before you sign an agreement. You check and crosscheck if there is a bank loan, tax arrears and if there is any claimant.”
Nejib said that the former management of Allana Potash will write a letter to Prime Minister Hailemariam Dessalegn and they were willing to appear before him and explain the matter. “I believe that we will be able to clear the misunderstandings amicably.” According to Nejib, Allana Potash had invested 90 million dollars on the potash exploration project and offered jobs for 450 Ethiopians.
In a telephone conversation with The Reporter former president and CEO of Allana Potash Farhad Abasov said that he would respond after he consults with his legal counselors.
Sources close to the matter told The Reporter that ICL agreed to pay 15 million dollars to ERCA but the authority demanded some 55 million dollars. In a letter dated November 4, 2016 and addressed to ERCA and the Ministry of Mines, Petroleum and Natural Gas, ICL said it wants to close the books and officially handover the project to the Ethiopian government. The company sought a guarantee that its officials would not be detained when they come to handover the project. Sources said so far there is no response from the government.
According to ICL, the net value of the investment in the project as of June 30, 2016 was approximately 170 million dollars. “Following the board’s decision the company will recognize in its financial reports an impairment of the investment amount as well as a provision for the expected closing costs,” the company said in statement issued on October 6, 2016.
Executives of ICL did not respond to email messages. Effort to get comments from ERCA was not successful.
Prime Minister Hailemariam said the mining sector could contribute to the country’s economic development. However, he said his government does not want the economy to be dependent on the mining sector. “Our future relies on the manufacturing sector.”