Talks Collapse & more – 30th Nov 2023

Salaam salaam from BA! This is the Rorshok Ethiopia Update from the 30th of November twenty twenty-three A quick summary of what's going down in Ethiopia.

Did you tune into last week’s episode? If so, you know that talks between the federal government and the Oromo Liberation Army (or OLA) broke down again. On Monday the 20th, reports surfaced saying there was a confrontation between government forces and the OLA, which tragically ended with the death of four civilians. The fight took place in the Horo Guduru Wollega zone of the Oromia region. Although there are hopes of having a third round of talks, hostilities between the OLA and the government continue.

On a related note, The Global Oromo Interfaith Council wrote an open letter to Prime Minister Abiy Ahmed and the OLA’s commander Kumsa Diriba, better known as Jal Mero, expressing its disappointment over the failure of the talks and urging both parties to return to the negotiating table to keep peace. Recall that The Global Oromo Interfaith Council is an organization that represents Oromo religious institutions throughout the world.

Speaking of Prime Minister Abiy Ahmed, he was in Austria’s capital, Vienna this past week to attend the 20th general conference of the UN Industrial Development Organization (or UNIDO). On the sidelines of the convention, PM Abiy sat down with Karl Nehammer, Austria’s Chancellor, and discussed bilateral relations. Afterward, both said that the talks specifically concerned enhanced partnership in agriculture, mining and tourism.

Although the UNIDO’s conference will continue until Friday the 1st of December, Abiy left Vienna early on Tuesday the 28th and headed to another European state, the Czech Republic. Its Prime Minister Petr Fiala welcomed Abiy to Prague in an official ceremony. The two leaders held talks and agreed to cooperate in agriculture, mining, and tourism while strengthening their already-established partnership in the defense sector. The countries’ cooperation is still very strong when it comes to defense. For instance, Czech company Omnipol is working with Ethiopia’s Air Force to modernize the L-39 fighter aircraft while supplying flight simulators.

Last week, scholars discussed Ethiopia's law and politics in the East African office of the NGO Good Governance Africa. The discussion's main point was the enormous pressure the executive puts on the legislative branch of the government. Participants said that the legislature is doing an incomplete examination of draft bills and agreements before passing them as laws. The director of the organization said that the relationship between the legislative and executive branches of Ethiopia’s governments shows the country’s weak democratic culture. The legal department of the House of People’s Representatives said that the main reason the legislature doesn’t deliberate much before passing laws is because there’s a law that limits the amount of time it can spend pondering on draft bills.

The House of People’s Representatives was in the news again. Habtamu Tegegn, The Minister of Mines, sat before the House’s industry and mines standing committee for the fiscal year’s first quarter report. He mainly talked about the natural gas project in Ogaden in the Somali region, explaining that, even though many companies have come over to process the natural gas in the area, none have been successful. He told the committee that the main challenges stunting the growth of the mining sector are contraband trade and security. To solve this, the government has decided to establish a mine police that will collaborate with the Federal Police.

The Minister said that even though the government had granted thirteen companies licenses to produce gold, only two - Midroc Gold and Stella - have begun operations. He added that the government will start to take measures against companies that haven’t begun operations if they don’t start producing within the next six months.

But let’s go to draft bills for a second. An NGO named Stand for the Environment issued a complaint with the House of People’s Representatives and the Federal Supreme Court protesting the draft bill determining federal court fees. The organization said that public interest litigation, meaning court actions brought for the public good, should be exempt from court fees and that imposing fees on such suits would contradict citizens’ constitutional right of access to justice. The draft bill imposes a ten percent to one percent rate of court fees and doesn’t exempt public interest litigation from such fees.

Moving on, Hibret Bank, one of the biggest private commercial banks in Ethiopia, celebrated its 25th anniversary on Thursday the 23rd. Mamo Mihretu, the National Bank’s Governor, made a speech reminding all the private banks in the country that they have to brace themselves for the changing economy and increased demand for financial services. He recalled that Ethiopia’s banks have managed impressive feats and that they have consistently recorded a growth rate of more than twenty-five percent annually. Despite this, he said, the nation’s banks have a long way to go compared to banks in other countries. On the occasion, Hibret Bank donated fifteen million birr or almost three hundred thousand US dollars, to ten non-profits.

However, the biggest winner in finance in the last fiscal year was payment solutions provider EthSwitch. The company said in its annual report that it has made more than four hundred million birr or a little more than seven million US dollars in net profit after taxes; an increase of a hundred and seventy-two percent compared to last year’s profits. This is the highest profit growth rate in Ethopia’s finance industry. The company explained that this very high profit stems from sound management and the introduction of new products. EthSwitch is a share company that all the banks in the country and some microfinance institutions own jointly. The chairperson of its board of directors is the deputy governor of the National Bank and its directors include CEOs of various private banks.

For our last update concerning banks… On Saturday the 25th, Zemen Bank revealed that it had picked the winning architectural design for a skyscraper it would build. The bank inaugurated its first skyscraper, which has since become its head office, last May but is nonetheless planning to build another skyscraper next to it on over two thousand square meters of land in Addis’ financial district.

Next up, one of the main players in Ethiopia’s alcohol industry is Brasseries et Glaciers Internationals or BGI. On Tuesday the 28th, BGI’s employees went on a strike saying that the company is forcing them to retire early. BGI is taking machinery away, meaning that employees will be out of work. They just want compensation before the machinery is transferred. The employees said that they won’t continue working until they get a face-to-face with the company’s CEO. BGI’s CEO, on the other hand, told the employees via email to keep working calmly adding that the company will take measures against workers who called for the strike. On Tuesday morning, when transporters went to remove machinery from BGI’s factory, employees said they wouldn’t let the transporters take the equipment away unless the company paid them a fair compensation.

And to wrap up this edition, more business news. French telecom giant Orange announced that it is pulling out of the race to acquire forty-five percent of the state-owned telecom services provider Ethio Telecom. The French company explained that it is leaving the bidding process because Ethiopia’s market won’t fit its business strategy. Orange told the media that after assessing the state of affairs in Ethiopia, it found that it won’t be able to swiftly implement its projects. Recall that the company had submitted its expression of interest two years ago, when the bidding process to sell part of Ethio Telecom began.

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