Globalization and free trade have now become the axiom of countries worldwide. This is because western countries and institutions that promote globalization and free trade, like the World Bank Group (WBG) and the International Monetary Fund (IMF), have been promoting and pushing the idea relentlessly ever since the end of World War II.

Especially after the 1980s, the notion that globalization is inevitable and free trade benefits everyone has been elevated to high status to become the major global economic philosophy.

It was Malcolm X, the African-American Human Rights Activist, who said that “media is the most powerful entity on earth.” Especially in the western world, it is regarded as the most powerful actor in the political realm. In fact, it is so important that it is often called the unofficial fourth branch of government.


The Rise of A Shadow Government

State capture refers to systematic high level political corruption that establishes a hidden political regime at odds with the constitutional purpose of the state, by capturing politicians and parties, journalists and the media, the police as well as key state institutions such as the legislature, the executive, the judiciary and regulatory agencies in order to protect and to benefit its own private interests. Although state capture is a concept that has received extensive attention principally in the post-communist states of Eastern Europe and Latin America, it has also found its way into Africa’s political discourse in recent years. In fact, the influence of state captors is growing in developing countries. Ethiopia is no exception, as evidenced by the mismanagement of massive mega projects and numerous corruption scandals as well as political persecution, especially in recent years. EBR’s Samson Hailu investigates the extent of the phenomenon in Ethiopia.


Measuring its Impact on Coffee Exports

In October 2017, Ethiopia devalued its currency by 15Pct with the aim of boosting export and improving the current account deficit. Three months later, the impact appears to be positive, with export revival registered in some areas. For example, export proceeds from coffee hit a record high, reaching USD435 million in the first half of the current fiscal year, the highest increase since 2012.


At the end of the just ended fiscal year, Ethiopia’s parliament approved ETB320 billion budget for 2017/18 fiscal year. The Ethiopian Revenue and Customs Authority (ERCA) also planned to collect ETB199 billion in the year, 62Pct of the approved budget. The tax collection in the preceding year was ETB160 billion. The Authority has been working to increase the tax-to-gross domestic-product (GDP) ratio from 13Pct currently to 17Pct in 2020.
However, the recent effort to increase tax collection, thereby improve the tax-to-GDP ratio, by collecting more taxes ended up being controversial. Tax payers repeatedly voice their frustrations in high sales assessment which implies exaggerated tax amount to be required. Experts also challenge the way the government tries to boost domestic resource mobilisation because efforts to create an enabling business climate for small and informal businesses to go formal and contribute more to the national development endeavour remains minimum. EBR’s Samson Hailu explores the issue to offer this report.


Small scale farming holds a dominant role in Ethiopian Agriculture. Though productivity is still low, it employs almost 85Pct of the population, produce for consumption, export and industrial raw materials. That’s why; transforming the sector has been a priority for the government.
The annual production by small-scale farmers during the main harvesting season increased from 171 million quintals to 290.4 million quintals within the last ten years, showing a 70Pct increment.
However, with the surging population and looming climate change, experts stress that smallholder farmers cannot continue feeding themselves and the rest of the population and be engines for economic growth in the long run. Experts recommend that enough attention should be given to large scale farming. EBR’s Samson Hailu explores the saga behind small scale farming to offer this report.


A Pressing Issue for the New AU Executives

The 28th African Union (AU) Summit on Harnessing the Demographic Dividend through Investments in the Youth was attended by heads of State and Governments in late January 2017.
A key issue for discussion, however, was the election of the new leadership for the AU Commission. More now than ever, the Commission aspires to deepen continental integration. This is a cornerstone for the creation of a prosperous Africa, envisioned under Agenda 2063, which is a strategic framework for the socio-economic transformation of the continent. The Agenda seeks to accelerate the implementation of past and existing continental initiatives for trade and economic integration as well as growth and sustainable development. EBR’s Samson Hailu explores the level of intra-Africa trade and analyses what the role of the newly elected AU executives may take in contributing to the creation of a prosperous Africa.


At the sixth Tokyo International Conference on African Development (TICAD), which took place in Nairobi, Kenya in late August, Japanese Prime Minister Shinzo Abe pledged USD30 billion in investments throughout Africa. This will help the East Asian nation increase economic ties with the continent, which lags far behind its regional neighbours. For example, China and India, two of Ethiopia’s biggest investment partners, have operational investments worth ETB15.9 billion and ETB5.8 billion, respectively, while Japan had ETB50.2 million. Now that Japan has expressed interest to invest in Africa, how much could Ethiopia benefit? EBR’s Samson Hailu delved into the matter and offers this report.


On June 23, 2016, the United Kingdom’s citizens voted to leave the European Union, sparking buzz and market volatility throughout the world. However, the impact the ‘Brexit’ will have on the numerous countries that rely on aid from the UK has remained relatively silent in post-referendum conversations. This is an especially pertinent question for Ethiopia, which received just over USD432 billion in aid from the UK in 2014. EBR’s Samson Hailu explored the issue to learn more about the potential implications of Brexit and what it means for Ethiopia.


A country’s broad money supply refers to money in its various forms – be it notes, coins, currency deposits or even credit from banks. When the supply is increased, it can have beneficial or disastrous effects, from spurring economic growth to increasing inflation to astronomical levels, which has a deleterious impact on quality of life, especially in developing countries. As Ethiopia aims to continue its path of double-digit economic growth, EBR’s Samson Hailu spoke with economists and government officials to learn more about the debates surrounding broad money supply and where it fits in to the country’s overall development aims.

Ethiopian Business Review | EBR is a first-class and high-quality monthly business magazine offering enlightenment to readers and a platform for partners.

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