Ethiopian Business Review

Left in Limbo

Wednesday, 15 May 2019 06:00 Published in Topic

The Harsh Reality Facing Firms Accused of Tax Evasion and their Employees

The subject of tax evasion, which refers to illegal practices used to escape from taxation, embraces many dimensions and problems. Global Financial Integrity estimates a sum of USD285 billion economic loss occurs in developing countries a year because of tax evasion. Although the exact figure is hard to find in Ethiopia due to insufficient data and different estimation techniques, tax evasion activities remain one of the major problem in Ethiopia. Even recently, the government announced that 135 companies were implicated in tax evasion activities, totaling around ETB14 billion. However, companies which are accused of involvement in tax evasion, as well as tax experts, stress that the gaps in the tax law is costing businesses unnecessary money, on top of leaving thousands of employees jobless as EBR’s Ashenafi Endale reports.

Africa has become the next frontier for European and Asian car manufacturers. Adding to Ethiopia’s collection of foreign auto companies, Volkswagen signed a Memorandum of Understanding (MoU) with the Ethiopian Investment Commission in the beginning of 2019. This makes Ethiopia the third country in sub-Saharan Africa to sign an MoU with Volkswagen, following Ghana and Nigeria, which both signed MoUs with Volkswagen in August 2018. Volkswagen already has a manufacturing plant in South Africa, which has been active since 1951.

According to the MoU signed between Ethiopia and the company, Volkswagen will focus on four key pillars: the establishment of a vehicle assembly facility, localization of automotive components, introduction of mobility concepts such as app-based car sharing and ride hailing as well as the opening of a training center. Thomas Schaefer, Head of Volkswagen Sub-Saharan Africa Region, who signed the MoU, detailed his company’s intentions in Ethiopia in an email interview with EBR’s Ashenafi Endale.

Returning to Roots: Braids Make a Comeback

Wednesday, 15 May 2019 06:00 Published in Society

Braids are a major part of many traditional hairstyles in Ethiopia. As a country with over eighty different ethnic groups, there are a variety of different hairstyles and adornments that go with each unique tradition, including gudula, zerantich, gutena, nazraw and shuruba. Lately, traditional hairstyles have been making a comeback in the streets of Addis, although they have not lost their popularity in more rural areas. EBR’s Kiya Ali looked into the newfound popularity of traditional hairstyles.

"Fashion is not all about big brands and red carpet."

Wednesday, 15 May 2019 03:00 Published in Interview

When Anna Getaneh made headlines in late 1980s, the modelling industry in Ethiopia was almost non-existent.  Born in Sweden as the second child of an Ethiopian career diplomat father and a fashion designer mother, Anna is one of the few Ethiopians who have become successful on the global modelling stage.
She briefly lived in Ethiopia at the age of four, but it was only after she earned a bachelor ‘s degree in business and marketing that Anna realized her potential in modelling. Subsequently, she pursued it as a part time job. Soon, she met with an agent who persuaded her to work as a model in Italy and then London. After that, modelling became her full time job.

Besides modelling, Anna is also involved in humanitarian work.  After she met with workers from Pharmacists Without Borders, a French organization, Anna went to a camp in Moyale, on the Ethio-Kenyan border, an area which houses many refugees from Somalia. She stayed there for a week helping with the feeding program. This inspired her to establish the Ethiopian Children’s Fund, which is registered in New York. Soon after, she came back to Ethiopia, visiting places around Addis Ababa, and opened a school with a feeding program clinic in Aleletu, a woreda in the state of Oromia.

To fund her organization and promote fashion in Ethiopia as well as Africa, Anna, a mother of three, established African Mosaique, a company registered five years ago. A year and a half ago, she built a new factory on 9,000 meter squares of land, at a cost of ETB15 million. The model and designer now produces an average of 500 pieces of clothing a month.

Anna, who stresses that fashion is not all about big brands and red carpets, says that the fashion industry can be source of growth for the Ethiopian economy. However, she also has concerns over the rise in consumption of used clothing imported from abroad. Anna thinks that the government gradually must ban used clothes and should create awareness of local clothes amongst the public. EBR’s Samson Berhane sat down with Anna to learn about her journey from international model to successful designer.

In recent years, Africa has become the newest frontier for automotive companies from all over the world. Once majorly occupied by Chinese car manufacturers such as Hafei and Geely, Africa is now hosting car makers from Europe and the United States, including BMW, Volkwagen and Ford, all of whom are building production plants on the continent. EBR’s Ashenafi Endale explores the factors behind Africa’s automotive boom and what Ethiopia’s role as an auto manufacturing base.

Out of Reach

Wednesday, 15 May 2019 03:00 Published in Focus

Oranges have always been one of Addis’ favourite treats. However, over the past few years, their price has shown a steady increase, from around ETB15 a kilo to anywhere around ETB 80 per kilo now. Orange farmers and distributors have been experiencing issues that have contributed to the rise in prices of oranges, such as pests and horticultural disease. EBR’s Kiya Ali explored the issue.

Risks from using Pesticide Outweigh Benefits

Wednesday, 15 May 2019 03:00 Published in Focus

Ethiopia has been an agriculture dependent economy for decades. Among the methods to increase the production of the agricultural sector is the use of pesticides to combat insects, pests and other plant diseases. However, Ethiopia is also contending with transboundary pests and diseases, which travel across borders, infecting crops in multiple countries. There is also an issue with pesticides that are no longer able to be used for their original purpose, or other purposes, being stored unsafely, with no proper facilities with which to dispose of them. EBR’s Ashenafi Endale reports.

Reviving a lost Art

Wednesday, 15 May 2019 03:00 Published in Art & Life

Bringing Begena Back to Life

Begena, a traditional ten stringed instrument mainly used in the Ethiopian Orthodox Church, has long been a trademark of Ethiopia’s  liturgical music and traditional services. However, over the past few decades, there has been a decline in the number of students learning the art, leading to a decrease in the number of teachers and masters of the instruments. But a few individuals are now trying to bring back the art of Begena, on their own, as EBR’s Menna Asrat found.

Tough Times Ahead For Long Distance Athletics

Wednesday, 15 May 2019 03:00 Published in Sport Biz

Recently, the International Association of Athletics Federations (IAAF) announced a plan to revamp the Diamond League by reducing the series and canceling the 5000 meter race, starting in 2020, which leaves the 3,000 meter as the longest race on the tournament. After the announcement, Eastern Africa countries, including Ethiopia, which have historically performed very well in long distance races pushed back against the IAAF’s decision, saying it will hurt not only athletes but athletics. EBR’s adjunct writer Abiy Wendiferaw, who spoke to athletes and sport administrators reports on the justification behind the decision and the reaction from Eastern Africa countries.

Industrialization Policy Has to Go Beyond the Usual

Wednesday, 15 May 2019 03:00 Published in View Point

I find the tradition of ad hoc reasoning and top-down approach of promoting industrial development in Ethiopia to be like an airplane without wings: it moves like a car but doesn’t fly. Almost 35 years ago, the late Eshetu Chole (Professor) characterized the industrialization effort in Ethiopia at a time as “Running to stay in the same place”. Four decades down the line, industrialization in the country remains as slow as it was then.
Industrial policy is defined as “any type of selective intervention or government policy that attempts to alter the structure of production toward sectors that are expected to offer better prospects for economic growth”. There are different reasons for the use of industrial policy: to address market failure (European countries), to protect infant industries (post-independent African countries), import substitution (Latin American countries), export promotion (Korea and Japan), and public-sector driven economy of a central planning (socialist countries).

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