Capital

Weaver of visions
A force for change

Capital: Recently, you have announced a massive housing project to be launched soon nationwide. What is the background of this project and what are the core challenges in urban areas of Ethiopia?
Arkebe Oqubay: Basically, Ethiopian cities suffer from a high rate of unemployment, which is a reflection on the poverty. Secondly, cities all over the nation are suffering dramatic population growth rate of 4.3 % every year. This situation worsens the housing problem. Accordingly, this rising population needs basic infrastructure like roads, water, electricity and other facilities. This is also crucial to attract private sector investment. Therefore, basic infrastructure is the third key challenge of our cities. The other problem is good governance. There should be good governance which embraces a wider participation of residents and where they should be beneficiaries of the development activities, and where government offices should also give services in an open and transparent manner. In addressing and solving these challenges, there should be financial capability, which is another major challenge.
Tackling the infrastructure issue, we have prepared three development programs, including the development of micro-finance programs. These programs are very much instrumental in reduction of the unemployment rate in the cities and in the meantime, for the development of a strong private sector. We have also created a development program to address the basic infrastructure and the shelter challenges in cities.
Capital: Have you seen positive indications in implementing these programs? How do you quantify them?
Arkebe Oqubay: Yes! For instance, in micro-finance development, after a substantial assessment, we have developed a strategy to help the emerging ones and to strengthen those already established. Therefore, only in the last two years, this sector has created more than 430 thousand jobs with the establishment of 54 thousand institutions. Therefore, these institutions need our support to sustain them in their small-scale trade activity. In our assessment, we identified special sectors, which create wider job opportunities and grow with the overall economic development such as catering, construction, handicrafts, metal and woodworks, textiles.
Hence, besides providing these sectors with appropriate production plots, we have supported them with loans of a solid one billion birr, just in the last two years. In my understanding, giving a loan of one billion birr only for the micro-finance sector is a giant step, since they are giving employment to the unemployed.
Since this sector needs a continued support, in all cities around the nation, we have established more than 760 centralized service-providing centers in which more than four thousand extension agents have been trained and work. The centers provide a one roof service avoiding the bureaucratic chains and help the institutions save time for production and work.
We will continue supporting this growing sector, as we believen it is a strategic move towards addressing the bigger challenges of women and the youth, much more than any other programs. Additionally, the development of this sector will realize the growth of a strong private sector.
Currently, we are moving towards improving the basic infrastructure of especially the bigger cities and regional towns with a 1.5million br. loan given by the World Bank. This project improves water, roads, sanitations and other facilities .
Capital: You are popular for condominium housing projects. What are the developments in this area?
Arkebe Oqubay: Housing development is the main area, of course. We have studied how we can address the chronic shortage of houses. Preparing the strategy, we have clearly stated that, the government without the participation of private investors and residents cannot solve the housing issue. Therefore, the strategy was developed in consideration of the capacity of these stakeholders. We facilitate and support real estate developers by providing land plots, which mostly build houses for middle class residents, and individuals building extra houses, who play an immeasurable role in reducing the problem. The resident participation aspect is where residents in associations build houses and get support from the state.
Launching the Grand Integrated Housing Development Program (GIHDP), we have introduced condominium housing, which by far saves the land resource and unnecessary expansion of cities, since cities could not facilitate basic infrastructure demands.
Condominium-housing programs are basically targeted to solve the shelter issue, followed by the job creations, in which quite a big number of women and youth are currently working on construction sites. The third aspect is the development of the construction industry that is at its lowest level now. Previously, we had only a few construction companies capable of building relatively high standard buildings, although with compromised quality.
So, the development of construction companies is crucial as it saves a significant amount of money, in building factories and other infrastructure. It is obvious that, next to farming, the construction industry is the biggest employer. Developing this industry, and not only in the cities will meet the growing demand around the nation. In other words this also means the establishment of a stronger private sector in the construction industry since all contractors on the sites are private contractors.
The fourth aspect rises from the fact that most of the cities and towns around the nation, a large sections of them are decaying slum areas. Addis Ababa, until recently, had 60% to 70% slums. So reduction of slum areas in big cities and planning the emerging towns so as not to have slums, has been considered in the strategy.
Other important aspects in the housing project is wealth creation, equitable distribution and economic empowerment of the poor, which makes citizens owner-occupiers (and not tenants). By enabling people to become property owners, the program aims to economically empower low and middle-income residents in particular, helping them to become financially more independent.
Capital: Even though, condominiums were primarily planned to reach low income segments, there are complaints on the high price they are asked to pay.
Arkebe Oqubay: We have made some reform on this aspect. For the, houses will build in the future, we have now designed a program that privileges residents. Since they cannot pay the full amount at one time, they will be advantaged with up to 80% loans from banks, and an extended period of 15 to 20 years to pay it back. 80% of the total is a substantial amount of support, which has never been given before.
In the reduction of financial overload, in our financial package, the state will provide subsidies of different types, including giving out land plots for free. The other one is that we have freed housing from the 15% Value Added Tax (VAT) that is drawn on all goods and services in the nation. Therefore, residents are getting houses with out being taxed.
Additionally, residents are required to pay only 15% for the basic infrastructural facilities of these houses, in which the rest (85%) is subsidized by the state.
Capital: How do you summarize the results achieved so far?
Arkebe Oqubay: The projects have been implemented nationwide, after positive results were achieved from the experience in Addis Ababa. Only in the first phase of the program, 60 thousand houses in 35 towns have been constructed and will be finalized in the next 4 to 5 months.
In the second phase, we launched construction of 80 thousand houses in 60 towns. In the third phase, next year, we will launch construction of another 100 to 110 thousand houses in the nation. We are now finalizing preparation for the logistics and resources to launch the project.
Just the housing development projects have employed over 150 thousand citizens, 4 thousand micro-finance enterprises, and more than two thousand middle and higher-level contractors.
Therefore, the housing project has privileged residents with shelter, created jobs and accelerated the development of the construction industry in the country.
Capital: The construction industry, is currently being challenged by the shortage and souring prices of cement. In this context, do you think you vision will be achievable within its expected period?
Arkebe Oqubay: It is true. However, the cement shortage and the price hike is also on most construction materials including on iron and steel. To realize these projects, we need 1.5million tons of cement. Currently, all our factories produce only 1.8 million tons and we are getting only half of our demand from local factories.
We have hence developed a strategy to import one million tons of cement and source the rest from the local producers. We have already started importing cement, iron and steel even though things are not moving at the pace we would like, since transportation to and from Djibouti requires logistical capacity.
Capital: You have been successful in various infrastructural changes and in transforming Addis in to the diplomatic city of Africa, as Mayor of Addis. How do you write your profile of your mayorship?
Arkebe Oqubay: Mayor of Addis was one of the assignments where I got deep satisfaction. It was highly challenging at the same time since every issue that arises in the city, comes directly to the Mayor. Therefore, you cannot hide at all.
Addis Ababa has a large international community, a wealthy business community and many residents living below the poverty line. So, the main challenge was, to mobilize these stakeholders for the development of the city. For instance, one of the areas we have succeeded in was the sanitation of the city. Sanitation is very important for the livelihoods, and it also gives a good image. After we have introduced a policy direction and installed basic units and structures on the ground, then we had enormous participation from stakeholders, including youth, women and students.
Addis Ababa is a city with schools in which over 100 students are in one classroom. Some of the schools did not have even toilets while there were schools that had alcohol sellers on campus. This is again one of the areas where we have achieved good results. At least, there are no more shifts in Addis schools today. Applicable in two years, we launched the construction of more than 4 thousand additional classrooms in the schools. These were partially delayed, after the May 2007 elections.
Despite the election results, we had massive community support when we introduced the city's development plan. Residents might have their own reasons for not voting for us, I believe that this should also be respected. Even though the work was very demanding, I really enjoyed working as Mayor, for which I had substantial public support and cooperation.
Capital: Showing immediate changes, gaining a full support of residents, and finally losing in the election, how does it feel?
Arkebe Oqubay: I was not surprised over the results. But what really concerned me was, residents by their own choice, were aborting all the development programs we had put on the ground to benefit them. If motion had been kept at the same momentum still, we could have seen dynamic changes.
Personally, I have never felt bad about the results since power belongs to the people and people are free to make their own choices, which I respect. But as a party, I admit that, we had an expectation of winning since we had installed public beneficiary programs and projects, and we had support in that context. After the election, the party has admitted that, we did not satisfy the needs of residents.
Capital: Now, how do you see the situation of Addis, after your leadership? Are you seeing results of your effort and visions?
Arkebe Oqubay: Most of the programs are still continued. But if you see the sanitation of the city, it is in a really bad condition. Projects have not continued in the momentum they had been started with. The slowdown occurred because civil servants and professionals in the administration are not working with full commitment and capacity. These professionals are the key elements in the implementation of the development programs.
The second reason is, after some of the incidents that occurred following the election, public participation has declined or at least did not grow to the level expected.
Capital: There are many things nicknamed after you. Which made you laugh the most?
Arkebe Oqubay: Well, I know there are Arkebe shops, Arkebe road, Arkebe houses condominiums and others. But what made me laugh the most was to hear myself described 'an epidemic called Arkebe is in town'.

Weaver of visions A force for change

Weaver of visions
A force for change