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Ethiopia: Due to shortage of hard currency the government defaults to settle millions of dollars international payments. Airlines flying to Ethiopia are facing difficulty in repatriating their sales to their countries. December 16, 2017

Posted by OromianEconomist in Uncategorized.
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Odaa OromooOromianEconomist

Forex crunch compels gov. to delay payments

The dearth of foreign currency is compelling the Ethiopian government to delay payments that should be made to international companies in US dollars.

The Reporter has learnt that the government has been unable to settle payments to oil companies that delivered petroleum products to the country in 2015-2017 according to schedule. Vitol Oil supplied diesel and gasoline to the Ethiopian Petroleum Supply Enterprise in 2015 and 2016 after winning the international tenders put up by the enterprise in two consecutive years. Vitol Oil’s second contract was terminated in December 2016.

Reliable sources told The Reporter that EPSE now owes Vitol Oil 20 million US dollars. “Though the company’s petroleum supply contract expired on December 2016 EPSE is unable to settle the remaining 20 million dollars due to foreign currency shortage. The National Bank of Ethiopia has not been able to provide dollars to settle the payment,” sources said.

Similarly the government is unable to settle a 170 million US dollars payment that was supposed to be made to Petro China, the Chinese oil company which has been supplying petroleum products to the country since January 2017. Petro China won the international bid floated by the EPSE in September 2016 and won the tender to supply diesel and gasoline for the 2017 fiscal year. Petro China’s contract will expire on December31, 2017.

Sources told The Reporter that the government now owes Petro China 170 million dollars for the petroleum products it supplied in the fiscal year. Usually payments should be settled within 90 days after the petroleum products have been delivered. According sources, the payment arears are now more than one year old.

Meanwhile international airlines flying to Addis Ababa are facing difficulty in repatriating their sales to their countries. Foreign carriers sell their tickets in the local currency Birr and repatriate their sales revenue in US dollars to their respective countries.

The International Air Transport Association (IATA) told The Reporter that Ethiopia has joined the list of African nations where international airlines face difficulties in repatriating their funds. According to IATA, Ethiopia owes foreign carriers 22 million dollars.

In an interview in his office in Geneva, Switzerland Alexander de Juniac, director general and CEO of IATA, said that nine African countries have a total of 1.1 billion dollars in airlines’ blocked funds. Angola has the largest airlines blocked fund-507 million USD, Algeria-146 million, Sudan-125 million, Nigeria-121 million, Eritrea-64 million, Zimbabwe-52 million, Mozambique-33 million, Ethiopia 22 million and Libya 20 million.

Juniac told The Reporter that most of the countries faced shortage of foreign currency due to the drop in oil price while others have their own economic challenges. “We have been working with African governments to get the airlines blocked funds released and we are successful in releasing most of the funds in Egypt and Nigeria,” Juniac said.

The Ethiopian government officials explain that the country is facing the foreign currency crunch due to the commodity price decline in the international market stunting the foreign currency earnings. The increasing fuel imports and hefty expenditures on mega infrastructure projects are among the long list of contributing factors to the foreign currency shortage. The government is taking various measures to stimulate the weakened export. 


ESAT, 7 December 2017: According to a well-placed source, the foreign currency reserve in the coffers is only about 700 million dollars that could only run for three weeks.

Several mega projects have already been put on hold. Prominent among the projects is the 550 kms gas pipeline that stretches from the port of Djibouti to well inside Ethiopia.

The import of petroleum and medicines were seriously affected and businesses engaged in export trade had to wait upto a year to obtain foreign currency from banks.

The Ethiopian Shipping and Logistics Services Enterprise was unable to withdraw the 100 million dollars deposit it has with National Bank of Ethiopia.

The source also revealed that about 2000 containers were on hold at the port of Djibouti due to unpaid port fees.

The country’s annual debt payment has reached 2 million dollars of which a significant amount is due to be paid to the Chinese import export bank, China EximBank.

Meanwhile, the managing director of the International Monetary Fund Christine Lagarde is due to visit the country and is expected to talk on possible loans to help the country ease the shortage of hard currency. But the IMF, according to the source, demands the regime to halt the progress of mega projects. The IMF also requires the country privatize state-owned enterprises like Ethio-Telecom, according to the source.

A recent effort by regime officials to rekindle relationships with Qatar in hopes of getting some hard currency from the oil rich country has resulted in unintended and bad consequences. Irate over the developments, the United Arab Emirates, one of the gulf states that loves to hate Qatar, had demanded Ethiopia to pay 400 million dollars for petroleum that it had bought in loan. The UAE has for a long time been lenient on requiring Ethiopia pay the loan, the source said.

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Ethiopia’s economic growth hides fears and repression in one-party rule September 21, 2017

Posted by OromianEconomist in Horn of Africa Affairs, Human Rights, Uncategorized.
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Odaa Oromoooromianeconomist

Ethiopia’s economic growth hides fears and repression in one-party rule

By Graham Peebles, September 19, 2017


Scan the mainstream media for news about Ethiopia and discover headline after headline describing the country’s economic successes: double-digit economic growth, foreign investment and aspirations to become a middle-income country by 2030. Ethiopia, we are told, is a functioning democracy, an African tiger economy and an important ally of Western governments.

According to such eminent sources as the BBC, CNN, the World Bank and the US State Department, Ethiopia is an African success story; a beacon of stability and growing prosperity in a region of dysfunctional states. Dig a little deeper, speak to Ethiopians inside the country or within the diaspora and a different, darker image surfaces: A violent picture of brutal state suppression, state corruption, widespread human rights violations and increasing levels of hardship as the cost of living escalates.

For a country to be regarded as broadly democratic a series of foundational pillars and interconnected principles are required to exist and be in operation: the observation of human rights, political pluralism, a flourishing independent media, an autonomous judiciary and police force, a vibrant civil society and a pervasive atmosphere of tolerance, inclusion and freedom. Where these are found to be absent so too is democracy.

The Ethiopian government – the Ethiopian People’s Revolutionary Democratic Front (EPRDF) maintains that it governs in accordance with democratic ideals: a brief overview of their methods however makes clear this is far from the truth. The EPRDF rules in a highly suppressive manner and has created an atmosphere of fear and suspicion throughout the country, employing a largely uneducated security apparatus to keep the increasingly mobilized populace in order, and a state-run judiciary to lock troublemakers away.

Political dissent is all but outlawed, and should protestors take to the streets they are shot at, beaten and/or arbitrarily arrested; opposition leaders are imprisoned, branded terrorists, intimidated and persecuted; all major media outlets as well as the sole telecommunications company are state owned or controlled — outspoken journalists are routinely jailed, trade unions are controlled by the government, and humanitarian aid, including food and fertilizer, is distributed on a partisan basis, as are employment opportunities and university places. Refuse to pledge allegiance to the EPRDF and see that job offer withdrawn, the seeds, fertilizer and humanitarian support withheld.

In justification of this tyrannical rule, the government states that Ethiopia is an evolving democracy, that change takes time and that economic growth is their primary concern and not the annoying niceties of universal human rights law, much of which is written into the liberally worded, systematically ignored constitution. And whilst the EPRDF commits wide-ranging human rights violations, and acts of state terrorism, the country’s major donors, America, Britain and the European Union, remain virtually silent. Indeed their irresponsible actions go beyond mere silence — they promote the fictitious image of democracy and stability in Ethiopia, and in some cases conspire with the regime against opposition party activists, as many believe the UK has done in the case of Tadesse Kersmo, a British citizen and leading member of the opposition party Ginbot 7 – Movement for Unity and Democracy in Ethiopia. He was recently arrested at Heathrow on vague terrorism charges, as well as Andargachew Tsege another British citizen. Tsege was kidnapped while transiting through Sanaan airport in Yemen, and rendered to Ethiopia as part of a brutal crackdown on political opponents and civil rights activists. He has been imprisoned inside Ethiopia ever since, and the British government, to their utter shame, has said little and done nothing.

Development aid from these and other benefactors, including the World Bank, flows through and supports “a virtual one-party state with a deplorable human rights record,” Human Rights Watch (HRW) states in its aptly named report, Development without Freedom. The Ethiopian government’s “practices include jailing and silencing critics and media, enacting laws to undermine human rights activity, and hobbling the political opposition.”

Who benefits?

In 1995 the then Prime Minister Meles Zenawi stated that the plan was for Ethiopia to “sustain current double-digit rates of growth for the next 15 years so that by 2025 we become a middle-income country.” And they would achieve this in a manner that would “allow us to have zero net carbon emissions by 2030.” Economic reforms and growth controlled by a highly centralized political system, mirroring, many have suggested, the methodology of China, is the EPRDF’s approach. It is largely Chinese money and organization that has built the new dams, roads and railways. Industrial parks have sprung up offering new jobs at increased wages, and the government plans to build another nine such facilities. But manufacturing is a tiny part of the country’s economy: almost 85% of the workforce is employed in agriculture, which accounts for 41% of GDP, coffee being the main export.

Certainly there have been some economic achievements over the past 25 years and the country’s carbon emissions during the period 1999 to 2012, have, according to the World Bank, remained static. This is indeed positive, as is the commitment to hydro, geothermal, wind and solar power. Overall unemployment has fallen slightly to 19.8% (from 2009 when it was 20.4%), but 50% of young people remain unemployed, and Gross Domestic Product (GDP), the famous ‘double-digit growth rates’, has been consistently high, averaging 11.35% in the years since 2010, according to Trading Economic, although this dropped to 8% in 2015/16. The UN relates that there has also been substantial progress in the achievement of Millennium Development Goals, particularly relating to those living in extreme poverty. This figure has fallen from 45% in 1995/6 to 30%.

Whilst these figures and the commitment of sustained investment are encouraging, no level of economic growth, green or otherwise, can justify violent, suppressive governance, as is being perpetrated in Ethiopia, and a nation’s GDP is only one measure of a country’s health, and a narrow one at that. It reveals nothing of the political landscape, the human rights conditions under which people are forced to live, the dire levels of poverty or where any new wealth has settled. Many claim ‘crony capitalism’ abounds in Ethiopia, that the principle beneficiaries of economic growth have been government members and close supporters and people from Tigray, the regional home of the majority of the government and senior members of the armed forces.

Desperate for change

With a population of almost 100 million, Ethiopia is the second most populous country in Africa after Nigeria. And with a population growth rate at a tad under 3% it’s growing apace (in the EU e.g. its 0.23%, the US 0.81%), meaning over the coming five years the country will have 25 million more people to feed.

The median age is a mere 17 years of age (44% are under 14), life expectancy is just 67 years of age (158th out of 198 countries) and the country (according to the US State Department) is still regarded as one of the 10 poorest nations in the world, with some of the lowest per capita income figures on the planet – just $590 (World Bank): it’s hard to live on $49 a month anywhere. The combination of low income, low life expectancy and poor education levels – only 39% of adults are literate and 85% of rural youth don’t complete primary school – means that Ethiopia is ranked 174th (of 198 countries) on the United Nations Human Development Index.

None of this, plus other stark details of daily life, the inflated cost of living for example, increased taxes, or the lowest level of Internet access in Africa – just 3.7%, is featured in the country’s routinely championed GDP figures. Headline numbers which mean nothing to the majority of people: most can barely feed themselves and their families, are increasingly angry at the level of state suppression and live in fear of government retribution should they dare to express dissent. As HRW correctly states, “visitors and diplomats alike are impressed with the double-digit economic growth, the progress on development indicators, and the apparent political stability. But in many ways, this is a smokescreen: many Ethiopians live in fear.”

Fear that has kept the people silent and cowering for years, but, encouraged by movements elsewhere, long-held frustration and anger spilled over in 2015 and 2016, when large-scale demonstrations erupted. Unprecedented demonstrations that followed hard on the heel of elections in May 2015, which, despite widespread discontent with the ruling party saw the EPRDF miraculously win 100% of the seats in both the federal and regional parliaments.

Thousands marched; firstly in the Oromia region than in parts of Amhara (areas that constitute the two largest ethnic groups in the country), until in October, after scores of people were killed in a stampede at Bishoftu in Oromia, a State of Emergency was announced by the ruling regime. Extreme measures of control were contained in the clampdown that lasted for 10 months. Draconian rules, which undermined the rights of free expression and peaceful assembly, and prohibited any association with groups labeled terrorist organizations, such as independent media stations, ESAT TV and Radio and the Oromia Media Network. Break the rules and face up to five years in jail, where torture is commonplace.

HRW made clear that the Directive, which was lifted in August, went “far beyond what is permissible under international human rights law,” and “signaled a continuation of the militarized response” that characterized the government’s reaction to people’s legitimate grievances, peacefully expressed. Tens of thousands of protestors, including opposition party leaders, were arrested and detained without due process. Hundreds of people killed, many more beaten by security forces that act with total impunity. None of this is contained in the World Bank data, the IMF forecasts or the BBC news headlines, nor is the state terrorism taking place in the Ogaden region and elsewhere, where murder and false imprisonment of pastoralists is routine and women tell of multiple rapes at the hands of soldiers and the quasi Para-military group the Liyu Police.

Ethiopia desperately needs a renaissance, true development built on a firm foundation of human rights, inclusion and political pluralism. Human development that caters to the needs of all its citizens, not economic growth based on a prescribed outdated, unjust economic model, which inevitably benefits a few, strengthens inequality and fosters corruption.

Far from building a democratic society in which freedoms are observed and valued, an atmosphere of fear, suspicion, and inhibition has been cultivated by the EPRDF government, a brutal regime that is determined to maintain power, no matter the cost to the people of Ethiopia, the vast majority of whom are desperate for democratic change.

Graham Peebles is a freelance writer. He can be reached at: graham@thecreatetrust.org  

Ethiopia: The failed State’s Collapsing Economy April 8, 2016

Posted by OromianEconomist in Ethiopia's Colonizing Structure and the Development Problems of People of Oromia, Afar, Ogaden, Sidama, Southern Ethiopia and the Omo Valley, Free development vs authoritarian model.
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Odaa OromooThe TPLF Corruption network

Ethiopia: Double Digit Growth or Collapsing Economy?

Analysis by  Andualem Sisay,  All Africa, 8 April 2016


 

Ethiopian government’s increasing reliance on foreign loans is posing a serious risk of economic collapse, a renowned economist has revealed.

“Take for instance China, which has loaned over $17 billion to the Ethiopian government for infrastructure projects. Our total investment is 40 per cent of the GDP. Our saving is between 10-20 per cent of the GDP.

“We import $13 billion and export $3 billion. They are the ones who are filling all these deficit gaps,” said Dr Alemayehu Geda.

The Addis Ababa and London universities don was presenting his paper on Foreign Direct Investment (FDI) in Ethiopia and Credit Financing.

“What will happen if they stopped such financing tomorrow? What if, for instance, the Chinese government tomorrow says sell for me Ethio Telecom or sell to me Ethiopian Airlines or give me some share or buy my aeroplanes, or I will stop such credit financing?

Strategic items

“The country will collapse, I guarantee you,” he said.

Dr Alemayehu went on: “About 77 per cent of our imports are strategic items. Fuel only has 25 per cent share of the total import. As a result, even if we want to reduce these imports, we can’t. Ethiopia needs to minimise strategic vulnerability.”

The don elaborated giving the example of how the Koreans mitigated against such dependency risks when they used to source 75 per cent of their imports from the US some decades ago.

Dr Alemayehu presented his paper in Addis Ababa at the launch of a two-year 12 series of public dialogue by the Forum for Social Studies – a local civil society, partially financed by the UK’s Department for International Development (DfID).

 

“The Koreans came out of such vulnerability risk after analysing their situation properly, discussing the issue with their intellectuals and setting long term plans,” he said, advising the Ethiopian government to invest in quality education, skilled labour and improve the negotiations capacity as well as have in place a well-designed policy.

Last decade

Official estimates have shown the Ethiopian economy growing by double digits annually for about a decade now, a figure that has highly been doubted by independent scholars.

The Addis government has been applauded for growing the country’s GDP by around 10 per cent per year for the last decade.

In his paper, Dr Alemayehu indicated that Ethiopia’s external loan included $17.6 billion from China for various infrastructure developments, around $3 billion from Turkish and close to $1 billion from Indian governments.

The World Bank’s data shows that from 2012 – 2016, Ethiopia has taken a total loan of close to $6 billion from the global lender. Last year, Ethiopia for the first time, joined Euro Bond and accessed $1.5 billion.

In addition to loans, reports show that some $3 billion annually came to the country in the form of aid from donors.

Have declined

Ethiopia’s exports have declined from around $3 billion last year to around $2.5 billion this year, as revealed in the recent six-month report of the prime minister to the parliament.

Even though tax collection has been growing by an average of 20 per cent annually over the past five years, Ethiopia’s tax to GDP ratio still stands at 13 per cent, which is less than the around 16 per cent of the sub-Saharan average.

Last year, Ethiopia collected around $6 billion from tax, including $25 million recovered from contraband traders. The figure could have been raised by at least $3 billion had it not been for the generous tax incentives the country has provided to investors, according to latest report of the Ethiopian Revenue and Customs Authority (ERCA).

In only nine months of Ethiopia’s last budget (July 8, 2014 – July 7, 2015), the country provided tax incentives of around $2.4 billion to investors, by exempting them from customs and excise duties and withholding, VAT and surtaxes, according to ERCA’s report.

Financial integrity

A financial integrity report last December indicated that around $2 billion was leaving Ethiopia every year through mis-invoicing and other tax frauds.

When it comes to the FDI coming from China, India and Turkey, close to 71 per cent of their investments in Ethiopia were in the manufacturing sector.

However, job creation, technology transfer and export contribution were insignificant for Ethiopia, which has over an 90 million population dominated by the youth. The country has about 16 per cent unemployment rate, according to Dr Alemayehu.

Between 2003-2012, there were 93 Chinese companies that had reportedly invested $600 million, creating around 69,000 permanent and 79,000 temporary jobs for Ethiopians. There was little contribution to technology transfer and foreign currency generation through the exportation of their products.

According to Dr Alemayehu’s paper, during the same period, Indian investments in Ethiopia created 24,000 and 26,000 permanent and temporary jobs respectively, while 341 Turkish companies operating in Ethiopia created a total of 50,000 jobs.

Though much was being talked about Chinese investments growing in Africa, the Asian giant had less than 4 per cent of total share of FDI on the continent, out of the total stock of $554 billion worth in 2010. Most of the investments in Africa were still dominated by the Western companies, according to Dr Alemayehu.

Prime Minister Hailemariam Desalegn recently told the local media that Ethiopia’s GDP growth was not expected to record a double digit this year and would likely drop to around 7 per cent.

However, his special economic adviser with a ministerial docket, Dr Arkebe Equbay, reportedly told Bloomberg media that the economy was expected to grow by 11 per cent this year.

Foreign debts

The government was now expected to deal with puzzles such as why the economic performance was not as good as in the previous years, with all the generous incentives to investors and huge infrastructure investments mainly dependent on local and external loans?

How to repay its local and foreign debts before the lenders force the government to cede shares in its highly protected businesses, such as, Ethio Telecom, Ethiopian Airlines, the Commercial Bank of Ethiopia, the Ethiopian Insurance Corporation and Ethiopian Shipping Lines is, for sure, the elephant in the room.

But the big question is: How soon will these issues get the attention of a government pre-occupied with trying to feed about a dozen million people affected by drought and dealing with political unrest and conflicts mainly in Oromia and Gondar area of Amhara Region?


 

http://allafrica.com/stories/201604080259.html

Ethiopia: Forex Crunch Choking Businesses in the Country January 10, 2016

Posted by OromianEconomist in Uncategorized.
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Odaa OromooEconomic performance and size of governmentThis is the Ethiopian capital Addis Ababa (Finfinne) where the population of the early morning standing in long lines under the blazing sun (Sunday August 2015) for the purchase of sugar, oil and other basic goods

(Addis Fortune) — Ethiopia’s foreign currency supply available for importers and travellers alike is increasingly facing chronic shortages, claims an importer engaged in trading of household appliances from Asian countries, while opting to speak to Fortune on conditions of anonymity. As the country’s foreign exchange provision plummets into a whirlpool, the parallel or black market for hard foreign currency (which has become a rare commodity), is thriving in the country.

The forex shortage is so critical that opening a Letter of Credit (LC) takes as long as one year or even more, and even then, there is no guarantee that the requested amount of foreign currency will be availed, the importer complained.

His is not the sole voice of concern with the increasing scarcity of foreign currency in Ethiopia, as his view is also shared by a senior executive of a private bank and an economics lecturer, who also chose to speak anonymously to Fortune. They argue that basic economic principles of supply and demand suffice to explain the ongoing critical shortfall of forex in Ethiopia.

Both the banker and economist posited three basic factors: global economic slowdown, Ethiopia’s mega projects consuming huge loads of hard currency and the country’s widening trade balance, as the genesis of the shortage.

As the world still reels from the financial meltdown of 2008 and the subsequent global economic slowdown, it has negatively affected and upset long term foreign investment in the country, the banker and economist argued. However, a recent study by the United Nations Conference on Trade & Development (UNCTAD) discovered that Ethiopia is actually the third largest recipient of Foreign Direct Investment (FDI) in Africa, with inflows of 953 million dollars in 2014 and 279 million dollars in 2013, highlighting a rapidly rising trend.

Ethiopia’s mega projects in hydroelectric generation, sugar production, and rail transport, continue to drain the country’s hard currency reserves, with high demand for public investment, the experts argued. Import of capital goods and construction-related services increased sharply in Ethiopia according to a June 2015 IMF report, utilising large sums of hard currency.

In line with the country’s development endeavours, the National Bank of Ethiopia (NBE) has a policy of prioritising provision of foreign exchange for selected goods and services based on a designated priority, which shuns other imports, the banker explained. The mega projects top the priority list and drain the country’s forex reserves.

In addition to the impact of the country’s mega projects taking a rather large chunk of the highly limited forex reserve, Ethiopia’s trade balance is also one of the major factors affecting the availability of hard currency.

Though Ethiopia’s exports have registered growth over the past years, the growth rate of its imports has been at a much faster pace, resulting in an ever widening gap in the overall trade balance of the country.

Reports by NBE indicate that though the country’s export trade has been registering steady growth in the recent past, with exports worth roughly two billion dollars in 2009/10, increased to 3.25 billion dollars in 2013/14 and more than 1.6 billion dollars in the first two quarters of the current fiscal year, the country’s imports have skyrocketed at an alarming rate.

NBE’s data show that Ethiopia’s imports have maintained a robust course of growth over the years as the country imported goods worth roughly 8.27 billion dollars in 2009/10, increased to 13.72 billion dollars in 2013/14 and well over eight billion dollars in the first two quarters of the current fiscal year.

The national bank’s data also highlight the distressingly widening trade imbalance which continues to haunt Ethiopia’s balance of trade. As such, the trade deficit was put at an estimated -6.27 billion dollars in 2009/10, -10.47 billion dollars in 2013/14 and roughly -6.6 billion dollars for only the first two quarters of 2015.

This imbalance has partly been caused as a result of slow-evolving export growth rates with falling commodity prices and lack of diversification in exports, loopholes underscored by the International Monetary Fund’s (IMF) report.

But beyond the basic economic principles of demand and supply used as tools to explain the shortage of forex, other variables are worth exploring to get the picture of the problem in its entirety.

One important aspect is the proliferation of the black market and shady business deals between businesspeople and bankers. As anxious importers are willing to pay whatever cost they are made to pay to avoid penalties during delivery of imported goods, and as some corrupt bank staff and managers take advantage of the situation, the forex shortage has worsened.

Fortune spoke to a dealer, who, on conditions of anonymity, explained some of the processes in which brokers, importers, exporters and bankers engage, to facilitate the provision of forex at a faster time interval than normal. He stated that the deals take place underground but strictly follow legal procedural steps. This makes the whole process virtually undetectable by regulations of the national bank.

At the current going rate, a person who wants to get forex ahead of the pack, has to pay as much as three Birr for every dollar they request in their LC, the dealer told Fortune. His job is to bring together the bankers and the importers and the deal will be done. He also explained a different, still illegal, mode of acquiring forex employed in the context of secret partnerships between corrupt importers, exporters and bankers.

In this case, the dealer negotiates a proposal between an exporter and an importer where the latter will make use of the export earnings of the former, by paying the current going rate for every dollar used. The dealer once again negotiates the proposed scheme with the bankers and once on board, they jointly facilitate the importers’ access to hard currency.

The lack of transparency in opening LCs has cast an ominous shadow on the industry, according to several importers and the banker who spoke with Fortune. NBE recently took a highly publicised measure against the Cooperative Bank of Oromia for alleged mishandling of forex involving LCs.

One importer noted that a growing number of suppliers in Asia are now rejecting LCs opened in certain banks from Ethiopia, due to unpaid credits, emboldening his opinion that unless the regulatory state apparatus takes a serious overhaul at the forex provision, darker days are yet to come.

Travellers are also feeling the brunt of the forex crunch. As one traveller put it, she considers herself lucky if she can get 500 dollars from banks for a travel visa. The chronic shortage, she adds, has fed the parallel market for forex and its proportions and ramifications on the country’s economy are growing daily.

The CIA’s Factbook showed Ethiopia’s reserve of foreign exchange and gold was 3.785 billion dollars at the end of 2014. International financial institutions such as IMF have stated that they support the national bank’s objective of having foreign exchange reserves to cover three months of imports – but the central bank has so far, failed to respond to any of the questions Fortune had regarding the overall forex shortage in the country, including the state of forex reserves.

In addition to racking up the reserves, NBE should proactively counter all the shady business deals now widespread in the banking sector to cut the business community and the overall economy of the country, some slack.

Related:-

Ethiopia: The chronic shortage economy: What is the price and utility of a kilo of Sugar in Finfinnee (Addis Ababa) in terms of never ending queue?

https://oromianeconomist.wordpress.com/2015/08/27/ethiopia-the-chronic-shortage-economy-what-is-the-price-and-utility-of-a-kilo-of-sugar-in-finfinnee-addis-ababa-in-terms-of-never-ending-queue/