Archive for the ‘Ethiopian News’ Category

Civil resistance has an entire arsenal of “nonviolent weapons” at its disposal

Saturday, August 30th, 2014

The perilous job of body collection at the Ebola epicenter – video

Friday, August 29th, 2014

The retarding role of foreign aid in Ethiopia

Friday, August 29th, 2014

Addis Ababa has only 63 public toilets for its 3 million residents

Thursday, August 28th, 2014 … ddis-ababa


ከቅርብ ጊዜያት ወዲህ እየወጡ ያሉ ስሞች

Thursday, August 28th, 2014


On this day: 39 years ago Emperor HaileSelassie passed away

Wednesday, August 27th, 2014 … /0723.html


Khat, Ethiopia’s 4th largest export, suffers after European ban

Wednesday, August 27th, 2014

Almaz Gebremedhin’s heart-warming story (video)

Wednesday, August 27th, 2014

UK scientists to launch a 5-year programme to study the volcanoes of Ethiopia’s Great Rift Valley

Sunday, August 24th, 2014 … noes-30292


Hard truth about Ferguson, Missouri (video)

Sunday, August 24th, 2014

The story of Ethiopian neonatologist Dr. Mulualem Gessesse (video)

Saturday, August 23rd, 2014

Addis Ababa’s Koshe trash dump as Ethiopia’s center for redistribution of wealth

Friday, August 22nd, 2014

The first Afaan Oromo dictionary by Memhir HabteSelassie

Friday, August 22nd, 2014 … %88%9B.pdf


How did Ethiopia’s ruling party almost lost the 2005 election yet wins in 2010 with 99.6% of the vote? – Elise Dufief

Friday, August 22nd, 2014 … -ethiopia/


Privatization and its challenges in Ethiopia

Friday, August 22nd, 2014 … A82_a.html

During the years1999-2001 Washington institutions have been pushing for the privatization of the banking sector in Ethiopia and opening of the financial sector to foreign banks, particularly interested in the sale or break up Commercial Bank of Ethiopia (CBE). Considering CBE is ranked the 46th largest bank in African based on asset size, the pressure for the break-up of the government bank at the time did not make sense.

Having a large efficient indigenous large bank for Ethiopia is important, especially if the GoE decides to open the banking sector to foreign competition. But this does not mean the government owned banks in Ethiopia should abuse public money by lending freely to the Ethiopian-Oligarchy.

One issue amongst others that the International Monetary Fund (IMF) had with Ethiopian authorities were they were not allowing a market determined interest rates. The second reason was making an early payments of Ethiopia airlines debt using the National Bank of Ethiopia reserve, without consulting with the IMF, the IMF felt Ethiopian authorities were not serious about reform. In which the IMF temporarily suspended the Enhanced Structural Adjustment Facility to Ethiopia on the ground that the country had failed to meet some of the agreed upon conditions (BBC News).

Eventually, IMF reinstated Ethiopia back into the program and withdrew the demand for the breakup of the CBE into three parts to allow competition. Thus rather than breaking up the government owned banks and opening the financial sector to foreign investors, GoE allowed the opening of local private banks i.e., Awash, Bank of Abyssinia, Dashen Bank to mention the few. For IMF’s change of heart Professor Jospeh Stiglitz, the former member of the Council of Economic Advisers under President Clinton, and at the time the World Bank chief economist, takes full credit for the IMF’s change of heart in his book “Globalization and Its Discontent”.

Some of the other structural adjustment programs pursued included the establishment of guidelines to sell a minority stake in Ethio-Telcom with the help of the World Bank by April 1999; bringing ten state farms and two large enterprises (brewery and cement) factory to point of sale by December 1998; Initiate privatization of the Construction Business Bank by September 1998, again with the help of the World Bank; and to bring at least 80 other enterprises to point of sale by June 2001.

The EPA determined the transfer of these companies to the highest bidder or to compatible companies that could bring in technology and knowledge transfer as it saw fit. However, attempting to privatize the state owned companies without proper valuation of the assets, such as future cash flows, proper disclosure of financial statement to the public is a misguided policy.

Offering these enterprises in a stock market will give a much broader engagement in the privatization process by the public. The establishment of a stock market will not only address initial public offering, but enhance transparency, accountability, proper valuation of government owed enterprises and tax collection process. The government should therefore focus on much broader implications instead of minimal gain in sale of the government enterprise.

As long as there are proper regulatory requirements in place, such as capital structure, firm specific credit risk exposure, capital adequacy and transparency there is no harm in privatizing large government owned banks such as CBE. In fact, the privatization of government owned banks in Ethiopia would lower “crony capitalism”.

Although it is not as visible as it was in early 2000, the pressure by special interest groups to open Ethiopia’s banking and telecom sector to foreign investors continues.

Even though, opening the banking sector to foreign investors is outside the scoop of the privatization issue. Surprisingly major foreign financial media outlets are also fixated on commenting that the banking and telephone sectors in Ethiopia are not open to foreign investors. The same interest groups, have failed in reporting on the privatization of land from the state to the people of Ethiopia, that would capitalize agriculture, “Ethiopia’s salvation lies on the formation of a middle class and the privatization of land and tenure security.”, states an Ethiopian economic professor at Ferris State University, in the United States.

Indigenous Addis Ababa based transaction advisory group have also gone as far as entertaining the sale of the Big-5 (also the cash cow for government coffer), namely Ethiopian Airlines, CBE, Ethio-Telecom, Ethio-Insurance and Shipping Lines, to raise $7.7 billion to meet the government’s Growth and Transformation Plan (GTP). This was reported in Bloomberg, Reuters and Access Capital 2011/12 Macro Economic Hand book. One of the arguments made by Access Capital is to privatize these enterprises to curve the massive debt/ratio and external borrowing.

The Big 5, in the eye of the public are considered national treasures. Especially privatizing fully to meet the Growth Transformation Plan (GTP) to finance untested mega projects is an unwise measure. It would be like “killing the Goose that laid the golden eggs.” The government should privatize these large companies, if only it identifies operational inefficiencies, to have a better management, technology transfer and transparency. Even then, it could privatize a portion of these public firms only to add value, and not to be sold to single investor, but to the general public.

A good example is the controversial privatization of the Lega Dembi Gold mine in August 1998 that landed with a single investor and was sold for $172 million to MIDROC Gold Co. which is 98% owned by Al-Amoudi. The government of Ethiopia owns a minority stake of 2 percent. Since MIDROC acquired the Sidamo province mine in 1998, to date the price of 1 troy ounce of gold has increased by 36.4 % . US government geological survey estimates the remaining life of the gold mines to be at 13 years. According World Bulletin, last fiscal year Ethiopia earned over $456 million from gold export. … ld-exports

Privatization, if carefully implemented would improve the performance of state-owned enterprise. An impact and popular technique to privatize state owned enterprise is an initial public offering (IPO) or a distribution of ownership voucher.

In conclusion, privatization is a slow process, but Ethiopia should avoid the failure of the Russian privatization experience where large state owned companies end up in the hand of few oligarchs. In Russia through the distribution of ownership voucher, managers and employee gain control of two-third of the privatized firms.

The GoE can limit the number of shares sold to single investors, whereas management, insiders and single investors are not allowed to own more than 5 percent of the initial offering. That way the proportional stake of the privatized asset are widely distributed to local investors or the Ethiopian-Diaspora to come up with pooled growth-capital or a collective strategy to purchase the government owned enterprises.

2014 Special Drawing Right of ADB 1 Unit of Account = 1.34 USD

The author is graduate student at John Hopkins University.

Access Capital S.E … pia%20.pdf

Bloomberg News … llion.html

BBC News:

The Reporter … n-from-cbe

Commercial Bank of Ethiopia


IMF- Ethiopia—Enhanced Structural Adjustment Facility

Privatization Database: … 85,00.html

Reuters, Ethiopia, Saudi firm sign gold extraction deal: … L520091124

Institution of Developing Economies Johan External Organization … pia05.html

XAU/USD Historical Data … rical-data

US Embassy- Addis Ababa: … ation.html

United States Geological Survey … 011-et.pdf

Wikileaks US Embassy Cable … A82_a.html


New charges against Ethiopian publications further diminish critical voices – CPJ

Thursday, August 21st, 2014 … urther.php


The Woyanne junta is sued in U.S. court for illegal wiretapping

Wednesday, August 20th, 2014 … sition.pdf

Earlier this week, EFF told the U.S. District Court for the District of Columbia that Ethiopia must be held accountable for its illegal wiretapping of an American citizen. Foreign governments simply do not have a get-out-of-court-free card when they commit serious felonies in America against Americans. This case is the centerpiece of our U.S. legal efforts to combat state sponsored malware.

In February 2014, EFF filed suit against the Federal Democratic Republic of Ethiopia on behalf of our client, Mr. Kidane, an Ethiopian by birth who has been a U.S. citizen over a decade. Mr. Kidane discovered traces of Gamma International’s FinSpy, a sophisticated spyware product which its maker claims is sold exclusively to governments and law enforcement, on his laptop at his home in suburban Maryland. A forensic examination of his computer showed that the Ethiopian government had been recording Mr. Kidane’s Skype calls, as well as monitoring his web and email usage. The monitoring, which violates both the federal Wiretap Act and Maryland state law, was accomplished using spyware that captured his activities and then reported them back to a command and control server in Ethiopia controlled by the government. The infection was active from October 2012, through March 2013, and was stopped just days after researchers at the University of Toronto’s Citizen Lab released a report exposing Ethiopia’s use of use of FinSpy. The report specifically referenced the very IP address of the Ethiopian government server responsible for the command and control of the spyware on Mr. Kidane’s laptop.

The Ethiopian government responded to the suit with the troubling claim that it—and every other foreign government—should be completely immune from suit for wiretapping American citizens on American soil. Ethiopia’s filing rests on several logic-challenged premises. Ethiopia claims that the recording of Mr. Kidane’s Skype calls and Internet activity at his home in Maryland actually took place in Ethiopia, and is therefore beyond the reach of any U.S. court. Worse still, Ethiopia claims that it had the "discretion" to violate U.S. law, reducing the Wiretap Act to something more like a traffic violation than a serious felony. Interestingly, Ethiopia does not actually deny that it wiretapped Mr. Kidane.

Yesterday, EFF and its co-counsel at Robins, Kaplan, Miller & Ciresi, filed a response knocking down each of Ethiopia’s arguments, noting that not even the U.S. government is allowed to do what Ethiopia claims it had the right to do here: wiretap Americans in America with no legal process whatsoever. We argue that Ethiopia must be held accountable for wiretapping Mr. Kidane, just as any other actor would be. Neither its status as a government nor the fact that it launched its attack on Mr. Kidane from Ethiopia gives it carte blanche to ignore the law. If Ethiopia legitimately needed to collect information about Americans for an investigation, it could negotiate a deal with the U.S., called a Mutual Legal Assistance Treaty, which would allow it to seek U.S. assistance for something like a wiretap. Otherwise, there simply is no “international spying” exception to the law for foreign governments, nor should there be. When sovereign governments act, especially when they invade the privacy of ordinary people, they must do so within the bounds of the law. And when foreign governments break U.S. law, U.S. courts have the power to hold them accountable.

This is the next step in what we hope will set an important precedent in the U.S., fighting back against the growing problem of state-sponsored malware. No matter what one thinks about the NSA spying on Americans inside the U.S. (of course EFF believes that this has gone way far too), it should be easy to see that foreign governments—be they Ethiopia, China, or as EFF itself experienced Vietnam—do not and should not have that right. … overnments