EDITOR’S NOTE: The only reason the vampire regime in Ethiopia will not liberalize the telecom industry is that it wants to limit the people’s access to information.
By Jason McLure | Bloomberg
Ethiopia’s tribalist dictatorship will pursue membership of the World Trade Organization, though it has no plans to liberalize its telecommunications and financial-services industries to gain access, Trade Minister Girma Birru said.
Ethiopia is currently fielding questions about its trade policies from countries including the U.S. and Canada, as it attempts to negotiate entry into the global trade regime, Birru said in an interview on Feb. 17 in the capital, Addis Ababa.
The Horn of Africa nation, twice the size of Texas and with a population of 82.5 million, applied for membership of the Geneva-based trade arbiter in 2003. The country is counting on membership to open new markets to boost its $25.1 billion economy.
“Primarily we will join the WTO not to make others happy, but to make our economy work,” Birru said. “So to the extent it helps our economy we will liberalize things, but if it’s not going to assist our goals in trade and development we will not liberalize. Why do we have to?”
The country’s protected telecom and financial industries will be points of contention in the talks with WTO-member countries including the United States and United Kingdom, Tewodros Mekonnen, a researcher with the Ethiopian Economic Association, said in a phone interview on Feb. 19.
“I don’t see any plan” to break up or sell Ethiopian Telecommunications Corp. to private investors, Birru said. “If there are some problems it has nothing to do with ownership. It has only to do with management. Management and ownership don’t necessarily go together.”
Private Investors
Ethiopia has resisted pressure from the World Bank and trade partners like the U.S. to sell the telecommunications company to private investors.
Ethiopian Telecommunication’s monopoly enables it to charge $35 for a mobile-phone SIM card, which is required to obtain a mobile-phone number. In neighboring Somalia and Kenya, which have private mobile services, cards cost less than $5.
A 1-megabyte per second Internet connection costs more than $2,000 a month in Ethiopia. In South Africa, the continent’s biggest economy, a similar service costs between 600 rand ($59) and 760 rand, according to the http://www.mybroadband.co.za Web site.
“In Ethiopia, if there is any problem I don’t think it’s the price,” said Birru. “It’s the quality of the service. This has to be improved. And to improve this I don’t think it would be wise to privatize it.”
Ethiopia’s government is reluctant to sell the company because it is profitable and is expanding services to rural areas, Newai Gebre-Ab, Prime Minister Meles Zenawi’s top economic adviser, said yesterday in an interview.
Cash Generator
The company is “generating a lot of money and that money is being put to good use for development of infrastructure,” Gebre- Ab said.
Birru also said the Ethiopian central bank lacks the capacity to regulate large foreign financial institutions. The country is also unsure whether foreign banks would play a positive economic role in the country. As a result, the country is unlikely to liberalize the financial-services industry.
“At this stage, given the capacity that we have in terms of managing things and supervising them at the National Bank level, I don’t see why we’d allow that,” he said.
Ethiopia’s three state-run retail banks control about two- thirds of the capital in the country’s banking industry, according to the National Bank of Ethiopia. Until last year, no bank in Ethiopia could process MasterCard transactions. Banks in the country are also reluctant to lend to businesses that cannot provide real estate as collateral.
13 thoughts on “Ethiopia’s dictatorship says it will not free telecoms, banking”
LONDON, UNITED KINGDOM – A new index, ranking each of Africa’s 53 countries in terms of investment potential, launches today. The Star of Africa(TM) is a weighted index based on governance and social capital as well as Africa’s electricity, water (supply, sanitation and irrigation), internet and telecommunications sectors.(i)
The index is launched by African Rainbow Consulting, which provides intelligence briefings on doing business in Africa. It is designed to help investors and entrepreneurs to establish which countries offer significant risk or opportunity for successful long-term investment.
Topping the index is Nigeria, which, despite its poor governance score, offers significant scope for improvement in access to water, electricity and ITC infrastructure. Ethiopia ranks second, based on its potential for better countrywide access to water and electricity.
How can he hand over the two lucrative establishments where he can loot all the gold and money he needed.
This is one of the few policies I agree with the Addis Ababa dictators.
The Banking sector and telecoms should remain public or state controlled even if it is looted by the regime.
Global capitalism and the free market is a worse alternative for Ethiopia.
Look,even the US is now communist and it has literally nationalised the major banks and the autoindustries.
The current financial crisis has vindicated this policy alternative.
Zenawi ‘the Albnian prophet’ is a devil and he always want to control the media by any means.
zenawi is always zenawi and first he has to be defeated.
Girma Birru said “Primarily we will join the WTO not to make others happy, but to make our economy work,”
Girma Birru is simply trying hard to sale Woyane talking points – as far as the telecommunications is concerned, Woyane indirectly owns the business. Case in point is the recent dismissal of the eighteen best and brightest Engineers (each of which have 15 to 33 years of ETC experience) of the Ethiopian Telecommunications(ETC), whose crime is only to be loyal to Ethiopia and ETC and not to be tools of Woyane in the effort to launder 1.92 Billion Birr through a phoney TPLF-ZT Chinese Company on the pretext of a non-existent project. The recent appointment of a novice Woyane Cadre by the name of Amare (who simply doesn’t measure to the position – with no education or experience – at best no clue) whose only credential is loyality to the TPLF agenda is facilitated to achieve woyanes evil objective.
Although the TPLF mafia organization headed by Sebhat Nega and the Tigre thugs are trying their level best to hide the conspiracy behind the so called phoney “development plan” – many of us including the international financial security experts are following the trail of money being looted from the Ethiopian Treasury by Woyane gang!
Meles’s “economic advisor” says” ..the money generated from profits in telecommunication buisness is put in to good use to devlop infrustructure”. Really? what about the unprodcutive wasteful spending on cadre training and seminar?
Just few weeks a go Meles called thosands of yourth cadres from the provinces to Addis Ababa for usless communist and Deg type seminar. Who is paying for this in million birr? The poor Ethiopian tax payer!
What is the opportunity cost of this type of wasteful spending? Several hospitals, new schools, clean water projects and essential road works and maintenance should be abandoned to feed and transport the useless cadres.
“A 1-megabyte per second Internet connection costs more than $2,000 a month in Ethiopia”..I doubt there is a “1-megabyte per second Internet” service in Ethiopia. It is technically impossible! The whole capacity of the provider doesn’t exceed 30 megabyte per second.
They charge all that money for something that won’t permit you to watch a video on youtube, for example. It is just some kind of game…
ጨዋታ ነው::
Of course it is a cash generating cow for the TPLF, as well as, for lining up their pocket….Why should they let such easy money making cow go for nothing and who give a damn about the people, as long as thee primary goal is accomplished…..After all, they are following what they call socialist democracy or a simple socialism
The banking sector seems a bite logical at this time of financial crises but the telecom sector is nonsensical. If you pay 2000 USD for 1mb/sec Internet how can you enjoy the fruit of global network of business and education opportunity. At the core of the problem if the lay person use Internet in Ethiopia as luxury not as simple tool to communicate. If we have cheap Internet back home we can outsource IT business to Ethiopia. For example, the diaspora can teach their children their native language at reasonably low price by native Ethiopian online. Business opportunities will be discussed and implemented frequently. It is sad story to know that we are missing this ICT opportunity this time again. But who knows
Ethiopia under the monkey, Meles Zenawi is the last country in the whole world in terms of access to telecommuincations and technololgy. The dumb Meles Zenawi, does’t have any idea about tehnology and science. He only knows to kill, rape, steel and lie. In order to build, the barren Tigray tribal village, the suffering of Ethiopians will continue.
Controlling telecommunications is a necessity for the ruling party as it provides a dual benefit – it is a cash cow & it helps to control communication (remeber that they switched off SMS after the 2005 elections). Every country I have been to I can buy a SIM card at a corner shop or even from street vendors. The most recent two times I was in Ethiopia, I tried to buy one. The first time, I was shocked that I was asked to deposit a photocopy of an ID card & refused to do so. The second time I needed the SIM card for emergency purposes & was considering to compromise my principles but I was told a copy of a passport was not good enough. I had to get an approval from a regional Telecom office to use the passport copy or I had to get a photocopy of a Kebele ID card. I gave up!
There are some points I agree with the tribal regime even though there are countless things I don’t agree. Why should we open our telecom and financial market for foreign looters? Whey they ask us to privatize our utility companies? They know there is no one in Ethiopia who can afford to buy these companies. The only option is to sell to profit hungry foreign investors. Why would we sell. We have one option to allow local investors to participate in these sectors with tight regulation.
The 19974 revolution and its slogan land to the tiller made more than 85% of Ethiopians to use, rent, inherit and sellland owners, although land still is owned by the government which can be discussed (the pros and cons).In urban areas people owned land the same way to build houses. the maximum capital Ethiopians should have during the Derge era is now lifted, though the current government has to revise its party affiliated business and other corrupt business activities.
Apparently there is a move to attract foreign investors to different business activities. It is good to have foreign investors in so far as they don’t make us landless, we die for it (although again the current goverment has to thouroghly revise its cadres’ tactful dispossesion of innocent ethiopians land, house, business and profession).
I agree with Girm Birru , we shouldn’t sell these major business centers that generate huge money which can be used to expand its own business both in quality and quantity. Who do you think cares for the people more the government or foreign investors? foreigners are all after their money , especially in Africa we see them making troubles let alone improve the life of the people. Ofcourse they can improve the quality of service but that doesn’t mean that the quality of the people improves. And the same thing to the land issue. Instead of selling these different money generating companies to foreigners eithere they should remain gov’t owned or public property. There are companies even in some western companies that are owned by their gov’t.
Recently a man by the name of Jonathan has told to one news paper that Ethiopia should chose either socialisim or capitalism. Is it not possible to live with a system of ower own which goese with our culture, relegion, way of living? Why is it that always the WB,IMF and other western countries insist to adopt their system, which can not work in Ethiopia due to many reasons.
We Ethiopians should not be emotional to decide what to do. Just because we have different political opinions doesn’t mean that we have to sell ourselves to foreign pockets. We do have quite a lot of things in common. We don’t want to be monopolized , we hate domination, greed, spoil our culture in the name of democracy like those found in some developed nations.