Investors request government support to resist the effect of Ethiopian termination from the African Growth and Opportunity Act (AGOA). Due to the conflict erupted last year between the federal government and the Tigray People’s Liberation Front (TPLF) on November 2, 2021, the U.S. President Joe Biden moved to suspend Ethiopia from the AGOA.
Temesgen Tilahun, Deputy Commissioner of the Ethiopian Investment Commission told Capital, following the commission’s discussion with investors, some investors have disclosed that they are working to find alternative market options while some investors have stated that they are planning to cut off their production until a better time comes and have asked the government to support them, in that accord.
As the commissioner elaborated, EIC is carefully inspecting the operation of investors and having encouraging discussions on the problems investors face. Moreover, the commission is preparing a strategy which includes different stakeholders to support investors.
Rearranging tax and tariffs, expanding duty free schemes, giving loan relief, minimizing transport subsidy and also minimizing shade leasing cost are some strategies to be used, the deputy commissioner indicates.
Since Ethiopia is not a WTO Member State, the country’s standard tariff schedule for access to the US market has far higher tariffs than would be the case under normal tariff relations (NTR). A loss of AGOA removes preferential access to 6,500 tariff lines.
Ethiopian officials had warned the suspension could take away 1 million jobs, disproportionately hurting poor women who are the majority of garment workers.
Temesgen explained that one of the efforts that the government is working on is to change the decision of the US government and also going forward, perhaps finding alternative market and increasing the product is the mainstream market which will be impactful for the future.
In a statement issued by the Ministry of Foreign Affairs, “removing the preferential agreement will affect the livelihoods of more than 200,000 low income families, mostly; women who have got nothing to do with the conflict, it will also considerably impair the lives of one million people who are engaged in the supply chain ecosystem.”
The ministry expected a balanced view on the situation from the international community and asked the US government to reverse its decision that may only embolden the terrorist group while endangering the aspirations of Ethiopians to extricate themselves out of poverty.
Ethiopia is one of three African countries alongside coup hit Guinea and Mali which will lose access to the scheme from January 1st.
AGOA brings Ethiopia about $100m in “hard cash” annually and directly generates employment for about 100,000 people, Ethiopia exported 237 million dollar duty-free to the U.S. last year, U.S. Commerce Department data said.
Almost half of Ethiopia’s 524 million dollar in exports to the US in 2020 utilized AGOA preferences – mainly for apparel and footwear, two sectors reliant on AGOA preferences with most of the exporters found in Industrial parks.
From the total 24 Industrial Parks developed in the country, 22 are now in operation and the country has managed to attract more than 250 domestic and foreign investors which till August 2021 created employment opportunities for 86,837 unskilled laborers and more than twenty thousand posts for skilled labor and graduates, excluding the three Industrial Parks in Tigray region which have ceased operations for the last one year.
According to the IPDC inclusive of the ones in the Industrial Park context, currently more than 65 textiles and apparel, and 67 major leather products, and gloves manufacturing industries employ over 200,000 direct jobs of which 80 percent of them are women and youth and generate about 230 million dollars per annum.
Investors seek gov’t support after AGOA suspension
Electronic Single Window saves Ethiopia 70 million dollar
Ethiopia saves around 70 million dollar from Jan 4, 2020 up to now by using the Electronic Single Window (ESW) program.
As part of the government’s commitment to improve investment and trade, the Ethiopian Customs Commission developed an electronic single window (ESW) for trade with the help of the World Bank Group.
The platform that will enhance efficiency in the trade logistics landscape of the country by speeding the customs process for importers and exporters was described by Robel Tesfaye, Program Director of Ethiopian Electronics Single Window Program Office, as system that has been able to minimize import release time from 44 day to about 12 days.
“We are able to reduce time to process a single permit from 30 days to 2.5 days and 55 autonomous organizations out of 73 expected organizations are able to process traders’ permit requests using our system,” elaborated Robel.
According to Robel, by making the procedure predictable and reachable by deploying new technologies, the E-service has spared the traders from wasting their time saving the country 70 million dollar within one and half years.
The Ethiopian Electronic Single Window is a program office that is aimed to conduct various single window related projects, which consists of 6 complementary projects, namely: The Ethiopian Electronic Single Window Software project – Phase I, The Advancement Software project, Software Consultancy, Network Infrastructure and Data Center Development project, Integrated Cyber Security Consultancy Project, The Ethiopian Electronic Single Window Software project – Phase II, and the EDF 11 – Trade Facilitation project.
Ethiopia is among the countries with the highest logistics costs in the world which retards growth of export-driven light manufacturing and agriculture. High trade costs can be attributed to various constraints, including a state monopoly on key logistics services, regulatory restrictions and low levels of key logistics services, amongst shortages of foreign currency which prolongs import times. Moreover, delays in obtaining and processing trade documents are a great contributor to the delay.
To address these challenges, the government introduced new procedures and approaches to conduct customs operations as part of its multi-pronged approach that includes improving regulations, processes, and practices that was burdensome to private businesses and addressing the investment climate issues that have been holding back investment and productivity growth.
“Basically, Electronic Single Window is a facility that allows parties involved in trade and transport to lodge standardized information and documents with a single entry point to fulfill all import, export, and transit-related regulatory requirements,” said Robel.
The Electronic Single Window system is aimed to simplify an international trade business that would eventually have the following benefits: Enhance import and export service by cutting time and cost to trade. It is aimed to minimize the import release time from 44 days to 3 days in the full-fledged implementation of all projects at large and it is aimed to reach from 44 to 15 days in the operation of the first phase project implementation in particular. In addition it will bring forth visibility, predictability and ease of use to both regulatory agencies and traders with respect to processing an international trade service. It seeks to maximize national revenue by encouraging manufacturing sector and revenue collection through streamlined import and export processes, enhance global competiveness with respect to ease of doing business and logistics performance to attract foreign investment. Likewise, it aims to enhance good governance by reducing corruption perception rate and by maximizing customer satisfaction.
According to Robel, more than 381,000 online trader-related requested have been process so far. 19 banks including the National Bank and 18 insurance companies are serving traders through the system. He further stated more than 19,400 traders are using the system to lodge their trade related request to regulatory organizations.
“We launched the Ethiopia Electronic Single Window Service a key technology that will enhance cost effectiveness and efficiency in trade logistics landscape of Ethiopia,” said Prime Minister Abiy Ahmed, on January 25, 2020 launching the project, adding, “By creating a paperless environment, eliminating multiple physical inspections and repetitive document submissions, it will help to reduce compliance costs for traders by an estimated 50%.”
DISORIENTING THE YOUTH
The youth squeezed between the dying old and the growing new is always rife with fresh potentialities. The youth can potentially and rather boldly question the assumed merits of the reigning order. At the same time the youth also harbors tendencies that can easily lead to disturbances/destructions, both to itself as well as to the attainments of its foremothers. In the context of our era, the current polarizing globalization doesn’t promise much in the way of sustaining global lives, both of humanity and others. In this conundrum, the youth is innately expected to eject itself (hopefully along with the larger humanity) from the prevailing life-destroying trajectories, which have come to define of our late modern world system!
Traditionally, the old has been quite successful in managing the youth, both productively and destructively. Repeated blatant blunderings of humanity wouldn’t have been possible without the active participation of the gullible youth. Plenty of unnecessary wars/conflicts took place (throughout the ages) with the help of the youth; after all, it is the youth that invariably ends up as the proverbial cannon fodder! When the more perceptive component of the youth rationally questions the absurdities of its days, it usually ends up being ostracized if not more. Nonetheless, the youth’s revolutionary forte has also been winning the days on many occasions. Despite all the modern tools to enhance general enlightenment and genuine understanding between peoples, the current global arrangement has not proved to be any different. The youth is no child; it is the in-between of old and new, here we are not talking about mere genealogy. It can observe, analyze, infer, deduct and even reflect (on all and sundry), backward and forward. Even when something is not fully comprehensible, the youth has the benefit of energy and ambition to get going. Therefore, repeated hoodwinking by the dying old has its limit and when the youth finally decides to take matters in its own hands, outcomes might well be quite different or unexpected!
The current global economic system that anchors almost all other superstructures is capitalism. The youth has started to question the system’s sustainability, particularly given the finiteness of resources and the top predator’s incapacity to thoroughly understand and hence manage its existence along with other life forms, to say nothing about its shallow wisdom in handling the life support systems on which almost everything about us/life depend on! But such inquisitive trajectories are intentionally closed or obstructed by the status quo, as it has absolutely nothing convincing to say about the durability of its fossil fuel propelled civilization. As if this is not enough, we now face a highly interdependent existence whose complexity inevitably leads to collapse! What is the youth supposed to do?
To start with, the youth should realize the operating principle of the globally entrenched interests is still ‘divide and rule’. This is now compounded with the masterful trickery of isolating the questioning types as pariah, while endorsing all the unexamined stupidities of modernity as life enhancing endeavors. When the prevailing collective insanity is seriously interrogated, the only answer the global ruling class can come up with is the following cynical and criminal narrative. It is the fault of the individual not to adjust to the whim of the unthinking collective as irrationally organized by capitalist modernity! What are the critical thoughts of social existence to do in a stifling multifaceted world where one cannot even perform such basics as fetching water, grow food, etc. without the myriad obdurate complexity built around each and every global activity?
Admittedly, the youth is hot blooded and by and large wants to engage in actions rather than reflections. Those supposed to do the heavy lifting, (traditional institutions of enlightenment, etc.) at least when it comes to serious reflections, are now sufficiently compromised (by capital) to be of much help in the effort to sustain life. Any one person with some sense of reality/space-time can see the futility of trying to endow each and every citizen of the world with a private car, a mansion, etc. or putting it more plainly; to avail a life style of an American middle class. To bring about such a lifestyle to all humanity we need to have at least seven more planets like earth-an impossibility! As it stands, the current 20% of rich humanity consumes 80% of the world’s resources! Those members of the global youth that are interrogating the unsustainability of this model and aspire to replace it with a more humane non-commodified and resilient existence are not encouraged to pursue their objectives. Such initiatives are not welcomed by the globally prevailing greed system that is on track to destroying the planet’s life support system sooner than later. Sadly, pandering to all the nonsense of this polarizing globalization has also become the prerogative of the peripheral nation states of Africa! Ultimately, we believe, all humanity has to face the music!
Some of the waywardness of the youth emanates from frustration about such basic but unanswered existential questions. Engaging in drugs, alcohol or spending precious time watching useless spectator sports/entertainments, etc. is, to some extent, coping mechanisms employed by the youth to alleviate the general gloom imposed by the destructive system. These products/services are globally available and are intentionally geared to sinisterly suffocate the creative energy of the youth. Reactions/symptoms are now visible, particularly in the rich or relatively rich countries of the system. For instance family formation has become increasingly unattractive to many young persons in places like Japan, Germany, Italy, etc. Amidst all these troubling trends, the existing destructive economic system is not willing to allow deep interrogation/reflections to take root. Instead, it insists on a global zombification regime, which is effectively marketed by the so-called institutions of learning, entertainments (movies, sports, digital games, etc.) and others! All these schemes only add to the increasing disconnect between the rulers and the ruled. The world of Hollywood and Bollywood will not be able to deliver real goods and services to tame the increasingly restless and pathetically alienated global youth!
We believe Africa’s youths are only reacting to the phony promise peddled by their respective states on behalf of the bosses of the global system. Manifestations of resentments in each and every country differ, but the core of the uprisings remains the same. The world is on the precipice and the non-workable solutions that are continuously prescribed by the cynical global dominant interests don’t hold much water and yet, the youth is dangled paradise ad nauseam!
Global coffee prices see new highs benefiting Ethiopia
The steep rise of coffee prices draws massive benefits to Ethiopia as the global prices are on pace to set a new record in the trading days of November.
The International Coffee Organization’s (ICO) report for October 2021, which is the first month of 2021/22 coffee year, revealed the monthly average composite of the organization standings at 181.57 US cents/lb (pound, which is about 0.45 kg).
The price increment shot 71.5 percent compared with the same period of last year, while registering a spike of 6.8 percent as compared to 170.02US cents/lb in September 2021.
ICO stated that the average price of October 2021 is the highest since the mark of 182.29 US cents/lb recorded in February 2012.
However the indicator price of ICO composition for November 23 shows the price shooting up to 206.99 US cents/lb with 3.6 percent increment compared with the preceding trading day.
These price levels during the coffee year 2020/21 marks a significant recovery from the low levels experienced over the three preceding coffee years.
The ICO statement indicated that the total shipments of all forms of coffee over coffee year 2020/21 (October 2020 – September 2021) amounted to 129.03 million bags (one bag is 60 kg), an increase of 1.3 percent compared with 127.36 million bags during coffee year 2019/20.
This coffee year is also expected to register more records for different reasons. ICO said that the uncertainty created by weather-related shocks and potential disruptions in trade flows from stricter pandemic-related measures has become a serious threat to the regularity of green coffee supply.
Ethiopia has also stated that it has already registering massive increment on the earnings in the past for months of the budget year, while the product that traded in the stated period came from the past crop season. This year’s harvest is coming out mainly from November.
In the first four months that is traditionally the lowest season for coffee export, Ethiopia earned USD 417 million that is 34 percent higher than the projection set by Ethiopian Coffee and Tea Authority. The authority estimated that the country shall earn USD 319 million which was USD 107 million lower compared with the actual achievement.
Similarly the volume of coffee exported in the four months until the end of October has climbed by 18 percent compared with the expectation. In the period, the authority projected to export 92,107 metric tons of coffee, while the actual export registered 108,608 metric tons that exceeded by 16, 000 metric tons approximately.
Recently, Adugna Debele, head of the authority told Capital that the market situation indicates that the country shall easily earn over a billion dollar at the end of the year. In the last budget year, the country secured USD 907 million from coffee export, which is a record for the country. Coffee is the major source of hard currency from the country’s commodity export.
