Buying houses from real estate developers incur 15Pct Value Added Tax and six percent title deed transfer fee of an actual price tag. Additionally, real estate developers take more time to deliver housing units which further escalate cost of construction that ultimately push price tag further.
This makes houses built by real estate companies more expensive for the vast majority of Addis Ababans. As a result, house buyers have been looking for affordable options.
Just a month after Ethiopia reported its first case of Coronavirus, schools were closed and students were told to stay at home. The intention was clear. It was implemented to protect them from the deadly virus. Unfortunately, some of the students were confronted with other major challenges at home. Some girls have been forced to get married, while a considerable numbers were raped and a lot were sexually abused. An unfortunate few also got pregnant after being raped by family members. EBR’s Kiya Ali reports.
Abraham Gezahegn is a prominent Ethiopian film maker. In addition to the immense popularity he enjoys domestically, Abraham has won various international film awards. With strong script writing and directing skills, he represents a rare quality in Ethiopia’s weak film sector. Ethiopian films have been attracting a very small amount of viewers over the past few years. Distribution, screening and copy-right related issues have also weighed down on Ethiopia’s already struggling craft. Abraham seems to have found a way around the problem by venturing outside of the country. Kiya Ali profiles the talented film maker.
Industrialisation is the process of building up a country’s capacity to convert raw materials into new products. It involves a growing complexity of production systems, reliance on primary or secondary economic activities and an increase in output.
Before reflecting on what kind of economic model Ethiopia needs, it is imperative to analyze what Ethiopia’s economic potentials are. In order to achieve fast and sustainable growth, the model must prioritize three things. First, we must recognize that we are a low income economy or LDC. Second, we must recognize that we have huge untapped resources. There is huge underemployed and unemployed labor, land, and other resources. For instance, there is redundant labor in agriculture. The third is structural rigidity. There are many problems that hold us back from utilizing markets, infrastructure, resources and others. The model must remove the structural rigidities.
Ethiopia is currently undertaking a partial privatization of ethio telecom. The plan of the government is to maintain 55Pct of the stake while selling 40Pct of the company to a global telecom operator. It aims to sell the remaining 5Pct to the general public. The government has also expressed its intention to license two private telecom operators. Accordingly, 12 foreign multinational telecom operators have expressed interest for both opportunities.
Developing Capital Market in Ethiopia
An article published on the February 2020 edition of Ethiopian Business Review investigated whether Ethiopia is ready to establish a stock market. The article incorporates views of several notable finance and investment advisers who are both for and against setting up a stock exchange. This article argues for establishing a stock market and highlights strategies for developing a successful stock market.
Source: UNCTAD, 2020
Foreign Direct Investment (FDI) flow to developed economies shrank by six percent to an estimated USD643 billion from their revised USD683 billion in 2018, according to UNCTAD. FDI remained at a historically low-level, at half of their peak in 2007.
Just two months ago, Ethiopian Bankers Association (EBA) recommended change of currency to the government in order to reduce the amount of money circulating outside the banking system. The bankers thought this would improve the liquidity of commercial banks. However, the recommendation received a mixed reaction among the finance community. Many argue that the major reason for the sharp rise in the amount of money outside the banking system is the cash-based transaction system in the country. Economists also say that changing currencies cannot stop money laundering. They say, introducing monetary reforms is the best way to deal with the problem. EBR’s Ashenafi Endale reports.
Daryl Wilson, CEO of East African Bottling Share Company (EABSC), arrived in Ethiopia just last year. Originally from south Africa, he was Managing Director of Nairobi Bottlers of Kenya for nine years before coming to Ethiopia. With 27 years in the business, Daryl Wilson has seen the troughs and the picks of the industry even before the turn of the century. He is already overseeing construction of two epic factories in Hawassa and Sebeta with an outlay of a staggering USD300 million. The two factories will triple the volume of coke products in Ethiopia, besides launching new products. He says Ethiopia is the fastest growing beverage consumer market in Africa. Nonetheless, the humorous CEO is not all that excited. The company already lost over 15Pct of its sales revenue due to the new Ethiopian excise tax regime and COVID-19. EBR’s Ashenafi Endale spoke to the CEO on various issues.
Ethiopian Business Review
Kiya Ali
Tsegaye Tegenu (PhD)
Yohannes Ayalew (PhD)
Tamrat Abera
Ashenafi Endale