Over a million city dwellers are taking money out of their meagre monthly salaries hoping to soon own a condominium house. Over the past six months, 4.1 billion birr has been mobilized through the program. Although saving often leads to investment, it has forced house-seekers in Addis Ababa to prioritize and cut spending. This is contributing to a stall of business in the Capital writes Berihun Mekonnen, EBR Staff Writer.
The saying; ‘a burnt child dreads the fire’ applies to many people who have given their money to real estate developers in Ethiopia because they have been burned repetitively.
More than a few legally registered real estate developers have sold out the land, they have leased from the government to build homes, illicitly, pillaging millions of birr in profits in a villainous process. Then, several other developers who have made promises and deals to deliver finished houses were not able to finish the job on time. They made their clients wait in vain and incur extra costs. Still today, there are some real estate companies that collected pre-payments over seven years ago and haven’t delivered the houses yet.
Neither be a lender nor a borrower, for money you lose both your friend [the borrower] and the money itself” has been one of the famous lines from William Shakespeare’s plays. That was many, many years ago. The game has changed now. Not only people, but countries, including the richest ones on earth, from the United States to Japan, from Australia to the UK, borrow a huge amount of money. They have even established institutions that specialize in lending money in massive amounts. Countries borrow money from these institutions and provide loans to one another.
How It All Began
We neither eat nor drink it, why would we pay for something we see with our own eyes?” was the question posed by many of the aristocrats of Emperor Menelik II, when asked to pay to watch the first ever film screened in Ethiopia at what later became to be known as “Saitan Bet” – the house of the devil. Others concluded “this is the work of the devil not humans” after watching it.
In one of Maritu Legesse’s popular songs there is a lyric that reads “Wesheten new enji endiaw segedereder, enes lagere lij wuha shiche lider”. which can losely be translated as “I’ve been hiding my feelings; but [for you], I would even [waste/spend my time] selling water.” Asserting that she is willing even to sell water, which is too cheap to take to a market, to show what she would do for her loved one. Traditionally, selling water which was even as mentioned in the song, unimaginable, at least not in the Ethiopian context. Now, things have changed, and water has become by far, one of the most sellable products in the country.
Farmers in the highlands of Wogera, Dabat and Debarq Woredas in North Gondar Zone of the Amhara Regional State, produce barley and sell the spares from consumption in the local market. This year’s price was not more than ETB 800 per quintal. They also incur transportation costs and other expenses to avail their produce for sale. But the worst part is, they may not find market, particularly in the harvest seasons from November to January when every local farmer produces barley in surplus and takes it out to the market.
Seeing how the newly constructed eight lane road on Africa Avenue is swamped with cars at rush hours gives an indication as to what is happening in the city’s car market. Every day more than 40,000 cars of different models and brands pass through this corridor alone. Yet this is not unique to this specific street. Every major road in the city is seen crowded with cars almost all the time. As the number of urbanites who are joining the ranks of the middle class is increasing so do the number of cars.
Many obstacles challenge foreign trade in Ethiopia- Logistics and transportation being the major bottlenecks. As much the logistics and transportation sector has undergone reforms, the sector continues to pose a critical challenge for the country’s foreign trade. In this exclusive interview, Berihun Mekonnen, Ethiopian Business Review’s senior editor sat down with Kassahun Abberu (PhD), Director of Transit, Shipping and Transport at Akakas Logistics PLC, a company which he cofounded in December 2000, to discuss the challenges and remedies for the complications in the sector, among other issues.Born in Dessie in 1958, Kassahun received his PhD in Transport Economics from Budapest University of Economic Sciences and Public Administration in 1992. His decades of portfolio include responsibilities at technical and managerial levels at the Federal Express, Hungary, Nib Transport Company, Ethiopian Amalgamated Ltd and others.
It has been widely recognized that the Ethiopian international trade has been in trouble for so long despite the growth it has been registering. The time consuming and costly customs clearance process, the weak and poorly coordinated logistics and transport services and the underdeveloped warehouse and inspection mechanism among others have been obstructing the performance of the sector.
Worku Girma spent nearly two years looking, unsuccessfully, for work after graduating in Law from Wollega University, one of the recently established higher institutions in the country. Back then, he would probably never have imagined that he would be a designer at a shoe factory for a Chinese company. Yet, that was what happened after he completed three weeks of training the company gives for new employees. He currently works for Huajian International Shoe City, which is one of the companies nested in the Eastern Industrial Zone.
Berihun Mekonnen