TPLF military tigthens grip on Ethiopian economy

Meet MetEC – the misleadingly named Ethiopian Metal and Engineering Corporation that has come to dominate the Ethiopian economy in less than one year.

Headed by Brigadier General Kinfu Dagnew, MetEC now controls 15 industries and 100 factories. It has its fingers in everything from the so-called Grand Renaissance Dam to arms factories, to a spanking new fertilizer factory, to ten sugar factories, one of which presumably requires the tearing down of Waldiba Monastery.

MetEC is the latest creative move by TPLF to tighten its grip and to control every aspect of the life of Ethiopians.  It entrenches a patronage system that gives a larger stake to the military while guaranteeing the survival of the regime. 

Disguised as economic development, the move is also further evidence of unabashed wealth transfer from a much-suffering population held hostage to an unrepresentative ethnic minority that has created a police state with the blessing of foreign powers.  Many of the foreign backers also benefit from various illicit deals with the secretive regime.

The bigger fish gulp the smaller ones

By Yonas Abiye  | Ethiopian Reporter

Recently, a flock of Ethiopian celebrities were fighting to voice their experiences on their visit to one of the government owned military industrial complexes.

Some were even tight-lipped regarding their surprise to what they witnessed for the first time. Leaving aside most of the things they said, they were heard talking in an almost common utterance, which nowadays is being considered by many to be a cliché: “I didn’t ever think such projects were being undertaken in this country…”

All were saying after these artists of the capital were invited visit to the country’s emerging biggest industry complex, the Ethiopian Metal and Engineering Corporation (MetEC).

MetEC, of course, has been on top of the country’s agenda. That is the case when one wants to trace the hottest talk among politicians, media and pundits in the past few years especially before and since the commencement of Growth and Transformation Plan (GTP), the nation’s current five-year development.

Established a year ago and entrusted with several government projects worth billions of Birr, MetEC, run by a high ranking military officer, General Kinfu Dagnew, involves several projects including the electromechanical work of the Grand Ethiopian Renaissance Dam and the erection of a turnkey fertilizer and 10 sugar plants in various parts of the country.

MetEC is engaged in the design, manufacturing, upgrading and maintenance of different products and services of the defense industry including upgrading combat aircraft and helicopters, tanks, vehicles and weapons.

It is believed to be playing a pivotal role in helping the country’s ambitious development plan of transforming itself into a middle income country by making contributions to the industrial development sector.

The corporation was originally mandated to undertake the design, manufacturing, development, and supply for projects for both state-owned enterprises and the private sectors seeing to ease the burden of steering the nation’s drive to an industrial economy, including subcontracting various projects to domestic construction firms.

However, it is now being said that it is swelling too much by amassing every development sector while undermining local and private companies.

The fatter it gets the less able it is at running projects properly, say observers.

“The very idea of the corporation’s establishment and it’s vision is good for foreseeing the country’s prosperity. The problem is to assure how its management capacity is reliable to run such huge commitments,” observes say.

Some also believe the actual trend of the corporations and wide engagement in multi-sectors is undermining other local companies, leaving them frustrated and incompetent.

“The huge fish are swallowing the smaller and tiny fish.”

In the past five months alone, MetEC has inaugurated over three factories. Corporation Board Chairperson and Minister of Defense Siraj Fagessa said the Corporation is “spearheading the realization of the Ethiopian Renaissance.”

The Corporation is a sub-contractor of the electro-mechanical work of the Grand Ethiopian Renaissance Dam Project. This work is mainly undertaken by the Ethiopian Power Engineering Industry, which is one of the industries under the Corporation.

The Ethiopian Power Engineering Industry inaugurated a wire and cable factory which is one of its eight factories built in the Modjo town at a cost of 200 million Birr to produce electric cables that can carry 400 and 500 KV, especially for the power transmission of the Grand Renaissance and Gibe III dams.

Similarly, the Corporation also inaugurated a heavy truck assembly factory, which is operating under the Bishoftu Automotive Industry.

Siraj once said the Corporation is facilitating the industrialization process. It works by bringing together local micro and small enterprises as well as medium industries with foreign companies facilitating the transfer of knowledge and technology.

There is also a new armament factory that was the third factory inaugurated a few months ago.

Currently, MetEC runs 15 industries and about 100 factories.

As part of its expansion, the Corporation has also agreed to replace the electric meters operated by the Ethiopian Electric Power Corporation. The project is valued at nine billion birr and is expected to replace electric meters with new ‘smart’ meters.

The new ‘smart’ digital meters are expected to automatically register electric consumption and report back to EEPCo without requiring manual reading like the analog meters currently being used.

However, MetEC has failed to deliver the commitment it owes to EEPCo. As a result, the latter had to make an urgent and alternative deal with an Indian company. This also cost EEPCo more than USD 27 million.

Critics claim that these transformers could have been done by other local companies if MetEC hadn’t weakened them.

It is to be remembered that the Ethiopian Electric Power Corporation is requiring all factories in Ethiopia to install devices that guarantee efficient use of power.

The Metal and Engineering Corporation has snatched the responsibility to produce the devices known as power factor correctors. The efficiency devices will be made available to all factories eventually on a one-year interest-free credit arrangement, according to EEPCo Officials.

The efficiency devices are expected to adjust the difference between real power and apparent power in the use of electricity to a ratio of one.

However, still, private companies face a setback from the device being manufactured by MetEC, which forces them to pay the electric bill, including the power leakage due to inefficient power meter.

MetEC is also building Yayu Coal Phosphate Fertilizer Complex project, 600km west of the capital in the Illubabor Zone, Oromia Regional State. It is one of the two fertilizer factories that the federal government wants built at a total cost of 2.8 billion Birr.

A consortium of public manufacturing enterprises, which are under the control of MetEC, include Dejen Aviation, Bishoftu Automotive and Locomotive, Hibret Machine Tools Engineering Complex, Homicho Ammunition Engineering Complex, Gafat Armament Engineering Complex, Power Engineering, Hitech Industry, Metal and Fabrication Industry, Adama Garment Industry, Ethiopia Plastic SC, and Nazareth Tractor Assembly Plant.